DOWNERS GROVE, Ill.,
Jan. 30, 2020 /PRNewswire/ -- Dover
(NYSE: DOV), a diversified global manufacturer, announced its
financial results for the fourth quarter and full year ended
December 31, 2019.
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
($ in millions,
except per share data)
|
2019
|
|
2018
|
|
%
Change
|
|
2019
|
|
2018
|
|
% Change
|
U.S. GAAP
from continuing operations
|
|
|
|
Revenue
|
$
1,776
|
|
$
1,809
|
|
(1.8)%
|
|
$
7,136
|
|
$
6,992
|
|
2.1 %
|
Earnings
|
168
|
|
158
|
|
6.4 %
|
|
678
|
|
591
|
|
14.7 %
|
Diluted EPS
|
1.15
|
|
1.07
|
|
7.5 %
|
|
4.61
|
|
3.89
|
|
18.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP from
continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
Organic revenue
growth
|
|
|
|
|
(1.1)%
|
|
|
|
|
|
3.8 %
|
Adjusted earnings
1
|
226
|
|
211
|
|
7.0 %
|
|
872
|
|
756
|
|
15.4 %
|
Adjusted diluted
EPS
|
1.54
|
|
1.43
|
|
7.7 %
|
|
5.93
|
|
4.97
|
|
19.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
1 For
the three months ended December 31, 2019 and 2018, adjusted
earnings excluded after tax acquisition-related amortization costs
of $25.1 million and $26.3 million, respectively, and rightsizing
and other costs of $14.2 million and $29.6 million, respectively.
In addition, the three months ended December 31, 2019, also
excluded a $18.4 million loss on extinguishment of debt, and the
three months ended December 31, 2018 excluded a $2.8 million net
benefit from the Tax Cuts & Jobs Act.
For the full years ended December 31, 2019 and December 31, 2018,
adjusted earnings excluded after tax acquisition-related
amortization costs of $103.6 million and $109.3 million,
respectively, and rightsizing and other costs of $25.4 million and
$58.3 million, respectively. In addition, full year 2019 excluded a
$46.9 million non-cash after-tax loss on assets held for sale
related to Finder, as well as a $18.4 million loss on
extinguishment of debt. Full year 2018 excluded a $2.8 million net
benefit from the Tax Cuts & Jobs Act.
|
For the quarter ended December 31,
2019, Dover generated revenue of $1.8
billion, a decline of 2% (-1% organic) compared to the
fourth quarter of the prior year. GAAP earnings from continuing
operations of $168 million increased
6%, and GAAP diluted EPS of $1.15 was
up 7%. On an adjusted basis, earnings from continuing operations of
$226 million grew 7%, and adjusted
diluted EPS of $1.54 was up 8% versus
the comparable quarter of the prior year.
For the full year ended December 31,
2019, Dover generated revenue of $7.1
billion, up 2% (+4% organic) compared to the prior year.
GAAP earnings from continuing operations of $678 million increased by 15%, and GAAP diluted
EPS of $4.61 was up 19%. On an
adjusted basis, earnings from continuing operations of $872 million grew 15%, and adjusted diluted EPS
of $5.93 was up 19% versus the prior
year.
A full reconciliation between GAAP and adjusted measures is
included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Dover delivered solid
results in the fourth quarter. As expected, revenue declined
slightly as we faced a difficult comparable from the fourth quarter
of 2018. Segment EBIT margin continued to expand year-over-year,
consistent with prior quarters as our margin improvement and
operational efficiency programs continue to deliver tangible
results.
"During the fourth quarter, our Fueling Solutions segment grew
despite a challenging comparable quarter in 2018, driven by strong
global demand, most notably in North
America on a pickup in EMV compliance activity. Solid growth
in Engineered Products was driven by healthy activity in both the
waste handling equipment and software business and aftermarket
vehicle services.
"The Imaging & Identification segment declined slightly in
the quarter, a result of continued slower marking &
coding activity in Asia, as well
as slower activity in the digital textile printing business. The
Pumps & Process Solutions segment posted a revenue decline,
primarily due to comparable calendarization in our plastics
processing business as well as slower demand in our pumps and
precision components businesses as a result of channel inventory
drawdowns. The segment's biopharma business continued its
double-digit growth trajectory. Finally, Refrigeration & Food
Equipment segment had a slower quarter due to continued softness in
new food retail store builds negatively impacting our systems
volumes, partially offset by continued strength in core food retail
case products and return to growth in our beverage can making and
heat exchangers businesses.
"Overall, Dover delivered strong results for the full year 2019
despite an uncertain economic backdrop. Revenue growth was healthy
across a majority of the portfolio and our businesses converted it
well into earnings. Our strong operational execution delivered a
significant increase in comparable cash flow and was complemented
by value-creating and disciplined capital allocation, including
large capital projects focused on growth and productivity, several
attractive bolt-on acquisitions, and opportunistic share
repurchases.
"As we enter 2020, most markets remain constructive. Order
backlog is up year-over-year in four out of five segments, we are
progressing well on multiple in-flight cost and productivity
initiatives, and our M&A pipeline remains active. We are
well-positioned to deliver top-line growth, margin expansion and
solid EPS accretion in 2020, as outlined in our September
investor meeting. Our strategy remains unchanged for 2020: drive
value-creation through sustained growth, continued profitability
improvement, strong cash flow and smart organic and inorganic
capital deployment."
FULL YEAR 2020 GUIDANCE:
In 2020, Dover expects to generate GAAP EPS in the range of
$5.48 to $5.68 (adjusted EPS of $6.20 to $6.40),
based on full year revenue growth of 2% to 3%. A full
reconciliation between forecasted GAAP and forecasted
adjusted measures is included as an exhibit herein.
SUBSEQUENT EVENTS:
On January 24, 2020, Dover closed
the previously-announced acquisition of Systech International, a
leading provider of traceability and brand-protection software
solutions to global pharmaceutical and FMCG manufacturers. The
transaction is expected to deliver accretive first year adjusted
EPS.
On January 24, 2020, Dover signed
an agreement to acquire Soft-Pak, Incorporated, a provider of
software solutions for waste handling fleets. The transaction is
expected to close in Q1 2020.
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its
fourth quarter and full year 2019 results and 2020 guidance at
10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, January 30, 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 fourth quarter and full
year results and its operating segments can be found on the
Company's website.
ABOUT DOVER:
Dover is a diversified global manufacturer with annual revenue
of over $7 billion. We deliver
innovative equipment and components, specialty systems, consumable
supplies, 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 24,000 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,
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, 2018,
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 - FOURTH QUARTER AND FULL
YEAR 2019
DOVER
CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)(in
thousands, except per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Years Ended
December 31,
|
|
2019
|
2018
|
|
2019
|
2018
|
Revenue
|
$
1,775,589
|
$
1,808,950
|
|
$
7,136,397
|
$
6,992,118
|
Cost of goods and
services
|
1,124,274
|
1,163,979
|
|
4,515,459
|
4,432,562
|
Gross
profit
|
651,315
|
644,971
|
|
2,620,938
|
2,559,556
|
Selling, general, and
administrative expenses
|
403,223
|
426,198
|
|
1,599,098
|
1,716,444
|
Loss on assets held for
sale
|
—
|
—
|
|
46,946
|
—
|
Operating
earnings
|
248,092
|
218,773
|
|
974,894
|
843,112
|
Interest
expense
|
30,846
|
32,015
|
|
125,818
|
130,972
|
Interest
income
|
(1,428)
|
(2,201)
|
|
(4,526)
|
(8,881)
|
Loss on extinguishment
of debt
|
23,543
|
—
|
|
23,543
|
—
|
Other (income) loss,
net
|
(1,891)
|
2,284
|
|
(12,950)
|
(4,357)
|
Earnings before
provision for income taxes
|
197,022
|
186,675
|
|
843,009
|
725,378
|
Provision for income
taxes
|
28,900
|
28,700
|
|
165,091
|
134,233
|
Earnings from
continuing operations
|
168,122
|
157,975
|
|
677,918
|
591,145
|
Loss from discontinued
operations, net
|
—
|
(16,406)
|
|
—
|
(20,878)
|
Net
earnings
|
$
168,122
|
$
141,569
|
|
$
677,918
|
$
570,267
|
|
|
|
|
|
|
Basic earnings
(loss) per share*:
|
|
|
|
|
|
Earnings from
continuing operations
|
$
1.16
|
$
1.08
|
|
$
4.67
|
$
3.94
|
Loss from discontinued
operations, net
|
—
|
(0.11)
|
|
—
|
(0.14)
|
Net
earnings
|
$
1.16
|
$
0.97
|
|
$
4.67
|
$
3.80
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
144,966
|
146,007
|
|
145,198
|
149,874
|
Diluted earnings
(loss) per common share*:
|
|
|
|
|
|
Earnings from
continuing operations
|
$
1.15
|
$
1.07
|
|
$
4.61
|
$
3.89
|
Loss from discontinued
operations, net
|
—
|
(0.11)
|
|
—
|
(0.14)
|
Net
earnings
|
$
1.15
|
$
0.96
|
|
$
4.61
|
$
3.75
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
146,790
|
147,940
|
|
146,992
|
152,133
|
|
|
|
|
|
|
Dividends paid per
common share
|
$
0.49
|
$
0.48
|
|
$
1.94
|
$
1.90
|
|
|
|
|
|
|
* Per share data may be
impacted by rounding.
|
|
|
|
|
|
DOVER
CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
|
|
|
2019
|
2018
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
Engineered
Products
|
$
418,851
|
$
429,928
|
$
426,689
|
$
422,089
|
$
1,697,557
|
$
402,980
|
$
416,552
|
$
401,243
|
$
412,372
|
$
1,633,147
|
Fueling
Solutions
|
373,050
|
390,586
|
411,769
|
444,772
|
1,620,177
|
319,304
|
363,355
|
367,617
|
415,314
|
1,465,590
|
Imaging &
Identification
|
268,354
|
266,588
|
275,109
|
274,420
|
1,084,471
|
268,654
|
286,458
|
270,299
|
284,432
|
1,109,843
|
Pumps & Process
Solutions
|
330,219
|
338,924
|
341,337
|
328,048
|
1,338,528
|
308,840
|
330,337
|
322,506
|
370,210
|
1,331,893
|
Refrigeration &
Food Equipment
|
334,643
|
385,474
|
370,335
|
306,165
|
1,396,617
|
338,235
|
401,766
|
386,214
|
326,878
|
1,453,093
|
Intra-segment
eliminations
|
(360)
|
(794)
|
106
|
95
|
(953)
|
(342)
|
(374)
|
(476)
|
(256)
|
(1,448)
|
Total consolidated
revenue
|
$
1,724,757
|
$
1,810,706
|
$
1,825,345
|
$
1,775,589
|
$
7,136,397
|
$
1,637,671
|
$
1,798,094
|
$
1,747,403
|
$
1,808,950
|
$
6,992,118
|
|
|
|
|
|
|
|
|
|
|
|
NET
EARNINGS
|
|
Segment
Earnings:
|
|
|
|
|
|
|
|
|
|
|
Engineered
Products
|
$
67,119
|
$
77,129
|
$
74,367
|
$
73,233
|
$
291,848
|
$
59,363
|
$
67,331
|
$
64,570
|
$
61,104
|
$
252,368
|
Fueling
Solutions
|
37,230
|
52,637
|
68,069
|
73,937
|
231,873
|
22,709
|
35,342
|
40,615
|
53,589
|
152,255
|
Imaging &
Identification
|
55,955
|
54,641
|
61,655
|
57,233
|
229,484
|
42,703
|
59,318
|
44,144
|
52,737
|
198,902
|
Pumps & Process
Solutions 1
|
14,991
|
76,278
|
77,433
|
71,379
|
240,081
|
44,639
|
57,686
|
60,592
|
74,632
|
237,549
|
Refrigeration &
Food Equipment
|
24,807
|
44,375
|
35,211
|
14,439
|
118,832
|
29,182
|
51,372
|
42,434
|
13,131
|
136,119
|
Total segment earnings
(EBIT)
|
200,102
|
305,060
|
316,735
|
290,221
|
1,112,118
|
198,596
|
271,049
|
252,355
|
255,193
|
977,193
|
Corporate expense /
other 2
|
30,866
|
24,512
|
28,658
|
63,781
|
147,817
|
30,763
|
30,050
|
30,207
|
38,704
|
129,724
|
Interest
expense
|
31,808
|
31,754
|
31,410
|
30,846
|
125,818
|
35,640
|
32,125
|
31,192
|
32,015
|
130,972
|
Interest
income
|
(890)
|
(945)
|
(1,263)
|
(1,428)
|
(4,526)
|
(2,057)
|
(2,563)
|
(2,060)
|
(2,201)
|
(8,881)
|
Earnings before
provision for
income taxes
|
138,318
|
249,739
|
257,930
|
197,022
|
843,009
|
134,250
|
211,437
|
193,016
|
186,675
|
725,378
|
Provision for income
taxes
|
32,613
|
51,654
|
51,924
|
28,900
|
165,091
|
24,841
|
44,981
|
35,711
|
28,700
|
134,233
|
Earnings from
continuing operations
|
105,705
|
198,085
|
206,006
|
168,122
|
677,918
|
109,409
|
166,456
|
157,305
|
157,975
|
591,145
|
Earnings (loss) from
discontinued
operations, net
|
—
|
—
|
—
|
—
|
—
|
22,025
|
26,497
|
—
|
(16,406)
|
(20,878)
|
Net
earnings
|
$105,705
|
$198,085
|
$206,006
|
$168,122
|
$677,918
|
$131,434
|
$139,959
|
$157,305
|
$141,569
|
$570,267
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
MARGIN
|
|
|
|
|
|
|
|
|
|
|
Engineered
Products
|
16.0 %
|
17.9 %
|
17.4 %
|
17.4 %
|
17.2
%
|
14.7 %
|
16.2 %
|
16.1 %
|
14.8 %
|
15.5
%
|
Fueling
Solutions
|
10.0 %
|
13.5 %
|
16.5 %
|
16.6 %
|
14.3
%
|
7.1 %
|
9.7 %
|
11.0 %
|
12.9 %
|
10.4
%
|
Imaging &
Identification
|
20.9 %
|
20.5 %
|
22.4 %
|
20.9 %
|
21.2
%
|
15.9 %
|
20.7 %
|
16.3 %
|
18.5 %
|
17.9
%
|
Pumps & Process
Solutions 1
|
4.5 %
|
22.5 %
|
22.7 %
|
21.8 %
|
17.9
%
|
14.5 %
|
17.5 %
|
18.8 %
|
20.2 %
|
17.8
%
|
Refrigeration &
Food Equipment
|
7.4 %
|
11.5 %
|
9.5 %
|
4.7 %
|
8.5
%
|
8.6 %
|
12.8 %
|
11.0 %
|
4.0 %
|
9.4
%
|
Total segment operating
margin
|
11.6 %
|
16.8 %
|
17.4 %
|
16.3 %
|
15.6
%
|
12.1 %
|
15.1 %
|
14.4 %
|
14.1 %
|
14.0
%
|
|
|
|
|
|
|
|
|
|
|
|
DEPRECIATION AND
AMORTIZATION EXPENSE
|
|
|
|
|
|
|
|
|
|
|
Engineered
Products
|
$
10,359
|
$
10,452
|
$
10,095
|
$
10,126
|
$
41,032
|
$
11,443
|
$
11,286
|
$
10,528
|
$
11,739
|
$
44,996
|
Fueling
Solutions
|
17,879
|
18,945
|
18,744
|
19,477
|
75,045
|
17,017
|
17,241
|
16,877
|
17,328
|
68,463
|
Imaging &
Identification
|
7,435
|
7,413
|
7,360
|
8,322
|
30,530
|
7,797
|
7,916
|
7,675
|
7,494
|
30,882
|
Pumps & Process
Solutions 1
|
17,548
|
16,201
|
16,018
|
17,817
|
67,584
|
17,431
|
17,741
|
18,078
|
18,732
|
71,982
|
Refrigeration &
Food Equipment
|
13,011
|
12,777
|
13,047
|
12,525
|
51,360
|
13,579
|
13,524
|
13,533
|
19,841
|
60,477
|
Corporate
|
1,506
|
1,981
|
1,523
|
1,726
|
6,736
|
1,358
|
1,595
|
1,399
|
1,428
|
5,780
|
Total depreciation and
amortization
expense
|
$
67,738
|
$
67,769
|
$
66,787
|
$
69,993
|
$
272,287
|
$
68,625
|
$
69,303
|
$
68,090
|
$
76,562
|
$
282,580
|
1 Q1
and FY 2019 include a $46,946 loss on assets held for sale for
Finder Pompe S.r.l. ("Finder").
|
2 Q4
and FY 2019 include a $23,543 loss on early extinguishment of
debt.
|
DOVER
CORPORATION
QUARTERLY EARNINGS PER SHARE (unaudited)(in thousands,
except per share data*)
|
|
Earnings Per
Share
|
|
|
|
2019
|
|
2018
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2019
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2018
|
|
|
Basic
earnings (loss) per common share:
|
Continuing
operations
|
$
0.73
|
$
1.36
|
$
1.42
|
$
1.16
|
$
4.67
|
|
$
0.71
|
$
1.10
|
$
1.07
|
$
1.08
|
$
3.94
|
Discontinued
operations
|
—
|
—
|
—
|
—
|
—
|
|
0.14
|
(0.17)
|
—
|
(0.11)
|
(0.14)
|
Net earnings
|
$
0.73
|
$
1.36
|
$
1.42
|
$
1.16
|
$
4.67
|
|
$
0.85
|
$
0.92
|
1.07
|
$
0.97
|
$
3.80
|
|
|
Diluted
earnings (loss) per common share:
|
Continuing
operations
|
$
0.72
|
$
1.35
|
$
1.40
|
$
1.15
|
$
4.61
|
|
$
0.70
|
$
1.08
|
$
1.05
|
$
1.07
|
$
3.89
|
Discontinued
operations
|
—
|
—
|
—
|
—
|
—
|
|
0.14
|
(0.17)
|
—
|
(0.11)
|
(0.14)
|
Net
earnings
|
$
0.72
|
$
1.35
|
$
1.40
|
$
1.15
|
$
4.61
|
|
$
0.84
|
$
0.91
|
$
1.05
|
$
0.96
|
$
3.75
|
|
|
|
Net earnings
(loss) and weighted average shares used in calculated earnings per
share amounts are as follows:
|
Net earnings
(loss):
|
|
|
Continuing
operations
|
$105,705
|
$198,085
|
$206,006
|
$168,122
|
$677,918
|
|
$109,409
|
$166,456
|
$157,305
|
$157,975
|
$591,145
|
Discontinued
operations
|
—
|
—
|
—
|
—
|
—
|
|
22,025
|
(26,497)
|
—
|
(16,406)
|
(20,878)
|
Net earnings
|
$105,705
|
$198,085
|
$206,006
|
$168,122
|
$677,918
|
|
$131,434
|
$139,959
|
$157,305
|
$141,569
|
$570,267
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
Basic
|
145,087
|
145,366
|
145,372
|
144,966
|
145,198
|
|
154,520
|
151,744
|
147,344
|
146,007
|
149,874
|
Diluted
|
146,911
|
147,179
|
147,051
|
146,790
|
146,992
|
|
157,090
|
153,938
|
149,457
|
147,940
|
152,133
|
|
* Per share data may
be impacted by rounding.
|
DOVER
CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)(in
thousands)
|
|
|
|
|
December 31,
2019
|
December 31,
2018
|
Assets:
|
|
|
Cash and cash
equivalents
|
$
397,253
|
$
396,221
|
Receivables, net of
allowances
|
1,217,190
|
1,231,859
|
Inventories,
net
|
806,141
|
748,796
|
Prepaid and other
current assets
|
127,846
|
126,878
|
Property, plant and
equipment, net
|
842,318
|
806,497
|
Goodwill
|
3,783,347
|
3,677,328
|
Intangible assets,
net
|
1,055,014
|
1,134,256
|
Other assets and
deferred charges
|
440,368
|
243,936
|
Total assets
|
$
8,669,477
|
$
8,365,771
|
|
|
|
Liabilities and
Stockholders' Equity:
|
|
|
Notes
payable
|
$
84,700
|
$
220,318
|
Payables and accrued
expenses
|
1,665,191
|
1,607,103
|
Deferred taxes and
other non-current liabilities
|
901,210
|
826,024
|
Long-term
debt
|
2,985,716
|
2,943,660
|
Stockholders'
equity
|
3,032,660
|
2,768,666
|
Total liabilities and stockholders'
equity
|
$
8,669,477
|
$
8,365,771
|
DOVER
CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (unaudited)(in thousands)
|
|
|
Years Ended
December 31,
|
|
2019
|
2018
|
Operating
activities:
|
|
|
Net
earnings
|
$
677,918
|
$
570,267
|
Loss from discontinued
operations, net
|
—
|
20,878
|
Loss on assets held
for sale
|
46,946
|
—
|
Loss on extinguishment
of debt
|
23,543
|
—
|
Depreciation and
amortization
|
272,287
|
282,580
|
Stock-based
compensation
|
29,702
|
23,698
|
Contributions to
employee benefit plans
|
(21,436)
|
(25,933)
|
Net change in assets
and liabilities
|
(83,654)
|
(82,297)
|
Net cash provided by
operating activities
|
945,306
|
789,193
|
|
|
|
Investing
Activities
|
|
|
Additions to property,
plant and equipment
|
(186,804)
|
(170,994)
|
Acquisitions (net of
cash and cash equivalents acquired)
|
(215,687)
|
(68,557)
|
Proceeds from the sale
of property, plant and equipment
|
4,168
|
5,908
|
Proceeds from the sale
of businesses
|
24,218
|
3,937
|
Other
|
(10,150)
|
(15,774)
|
Net cash used in
investing activities
|
(384,255)
|
(245,480)
|
|
|
|
Financing
Activities
|
|
|
Cash received from
Apergy, net of cash distributed
|
—
|
689,643
|
Change in commercial
paper and notes payable, net
|
(135,650)
|
(10,722)
|
Net increase
(decrease) in long-term debt
|
42,357
|
(350,000)
|
Dividends to
stockholders
|
(282,197)
|
(283,570)
|
Purchase of common
stock
|
(143,280)
|
(894,977)
|
Payments to settle
employee tax obligations on exercise
|
(37,370)
|
(46,254)
|
Other
|
(1,902)
|
(1,958)
|
Net cash used in
financing activities
|
(558,042)
|
(897,838)
|
|
|
|
Net cash used in
discontinued operations
|
—
|
(14,263)
|
|
|
|
Effect of exchange rate
changes on cash
|
(1,977)
|
10,645
|
|
|
|
Net (decrease) increase
in cash and cash equivalents
|
1,032
|
(357,743)
|
Cash and cash
equivalents at beginning of period
|
396,221
|
753,964
|
Cash and cash
equivalents at end of period
|
$
397,253
|
$
396,221
|
DOVER
CORPORATION
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE
(NON-GAAP) (unaudited)(in thousands, except per share
data*)
|
|
|
2019
|
2018
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2019
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2018
|
Adjusted
earnings:
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$105,705
|
$198,085
|
$206,006
|
$168,122
|
$677,918
|
$109,409
|
$166,456
|
$157,305
|
$157,975
|
$591,145
|
Acquisition-related
amortization, pre-
tax 1
|
35,635
|
34,997
|
34,244
|
33,460
|
138,336
|
38,150
|
38,072
|
34,997
|
35,078
|
$146,297
|
Acquisition-related
amortization, tax impact
2
|
(8,964)
|
(8,777)
|
(8,624)
|
(8,403)
|
(34,768)
|
(9,716)
|
(9,683)
|
(8,785)
|
(8,817)
|
(37,001)
|
Rightsizing and other
costs, pre-tax 3
|
3,963
|
6,457
|
3,807
|
17,926
|
32,153
|
4,371
|
6,808
|
24,201
|
37,448
|
72,828
|
Rightsizing and other
costs, tax impact
2
|
(861)
|
(1,377)
|
(806)
|
(3,745)
|
(6,789)
|
(797)
|
(1,448)
|
(4,477)
|
(7,809)
|
(14,531)
|
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
|
—
|
—
|
—
|
—
|
—
|
Tax Cuts and Jobs Act
6
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(2,832)
|
(2,832)
|
Adjusted earnings
from continuing operations
|
$182,424
|
$229,385
|
$234,627
|
$225,740
|
$872,176
|
$141,417
|
$200,205
|
$203,241
|
$211,043
|
$755,906
|
Adjusted diluted
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from
continuing operations
|
$
0.72
|
$
1.35
|
$
1.40
|
$
1.15
|
$
4.61
|
$
0.70
|
$
1.08
|
$
1.05
|
$
1.07
|
$
3.89
|
Acquisition-related
amortization, pre-
tax 1
|
0.24
|
0.24
|
0.23
|
0.23
|
0.94
|
0.24
|
0.25
|
0.23
|
0.24
|
0.96
|
Acquisition-related
amortization, tax impact
2
|
(0.06)
|
(0.06)
|
(0.06)
|
(0.06)
|
(0.24)
|
(0.06)
|
(0.06)
|
(0.06)
|
(0.06)
|
(0.24)
|
Rightsizing and other
costs, pre-
tax 3
|
0.03
|
0.04
|
0.03
|
0.12
|
0.22
|
0.03
|
0.04
|
0.16
|
0.25
|
0.48
|
Rightsizing and other
costs, tax impact
2
|
(0.01)
|
(0.01)
|
(0.01)
|
(0.03)
|
(0.06)
|
(0.01)
|
(0.01)
|
(0.03)
|
(0.05)
|
(0.10)
|
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
|
—
|
—
|
—
|
—
|
—
|
Tax Cuts and Jobs Act
6
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(0.02)
|
(0.02)
|
Adjusted diluted
earnings per share
from continuing operations
|
$
1.24
|
$
1.56
|
$
1.60
|
$
1.54
|
$
5.93
|
$
0.90
|
$
1.30
|
$
1.36
|
$
1.43
|
$
4.97
|
|
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 associated 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. Under local
law, no tax benefit is realized from the loss on the sale of a
wholly-owned business.
|
6 2018 tax
benefits related to additional Tax Cuts and Jobs Act regulatory
guidance covered by SAB 118.
|
* 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
|
|
2019
|
|
2018
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2019
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED SEGMENT
EBIT AND ADJUSTED EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered
Products:
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings
(EBIT)
|
$
67,119
|
$
77,129
|
$
74,367
|
$
73,233
|
$
291,848
|
|
$
59,363
|
$
67,331
|
$
64,570
|
$
61,104
|
$
252,368
|
Rightsizing and other costs
|
80
|
1,125
|
590
|
1,355
|
3,150
|
|
463
|
417
|
2,713
|
3,693
|
7,286
|
Adjusted EBIT -
Segment
|
67,199
|
78,254
|
74,957
|
74,588
|
294,998
|
|
59,826
|
67,748
|
67,283
|
64,797
|
259,654
|
Adjusted
EBIT %
|
16.0 %
|
18.2 %
|
17.6 %
|
17.7 %
|
17.4
%
|
|
14.8 %
|
16.3 %
|
16.8 %
|
15.7 %
|
15.9
%
|
Adjusted
D&A 2
|
10,359
|
9,855
|
10,095
|
10,126
|
40,435
|
|
11,443
|
11,286
|
10,528
|
11,230
|
44,487
|
Adjusted EBITDA -
segment
|
$
77,558
|
$
88,109
|
$
85,052
|
$
84,714
|
$
335,433
|
|
$
71,269
|
$
79,034
|
$
77,811
|
$
76,027
|
$
304,141
|
Adjusted
EBITDA %
|
18.5 %
|
20.5 %
|
19.9 %
|
20.1 %
|
19.8
%
|
|
17.7 %
|
19.0 %
|
19.4 %
|
18.4 %
|
18.6
%
|
Fueling
Solutions:
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings
(EBIT)
|
$
37,230
|
$
52,637
|
$
68,069
|
$
73,937
|
$
231,873
|
|
$
22,709
|
$
35,342
|
$
40,615
|
$
53,589
|
$
152,255
|
Rightsizing and other costs
|
752
|
1,768
|
811
|
1,554
|
4,885
|
|
1,112
|
1,623
|
5,922
|
6,675
|
15,332
|
Adjusted EBIT -
Segment
|
37,982
|
54,405
|
68,880
|
75,491
|
236,758
|
|
23,821
|
36,965
|
46,537
|
60,264
|
167,587
|
Adjusted EBIT %
|
10.2 %
|
13.9 %
|
16.7 %
|
17.0 %
|
14.6
%
|
|
7.5 %
|
10.2 %
|
12.7 %
|
14.5 %
|
11.4
%
|
Adjusted D&A 2
|
17,879
|
18,945
|
18,744
|
19,477
|
75,045
|
|
17,017
|
17,241
|
16,877
|
17,328
|
68,463
|
Adjusted EBITDA -
segment
|
$
55,861
|
$
73,350
|
$
87,624
|
$
94,968
|
$
311,803
|
|
$
40,838
|
$
54,206
|
$
63,414
|
$
77,592
|
$
236,050
|
Adjusted EBITDA %
|
15.0 %
|
18.8 %
|
21.3 %
|
21.4 %
|
19.2
%
|
|
12.8 %
|
14.9 %
|
17.3 %
|
18.7 %
|
16.1
%
|
Imaging &
Identification:
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings
(EBIT)
|
$
55,955
|
$
54,641
|
$
61,655
|
$
57,233
|
$
229,484
|
|
$
42,703
|
$
59,318
|
$
44,144
|
$
52,737
|
$
198,902
|
|
|
|
|
|
|
|
|
|
|
|
|
Rightsizing and other costs
|
389
|
1,268
|
301
|
4,392
|
6,350
|
|
899
|
347
|
7,923
|
3,476
|
12,645
|
Adjusted EBIT -
Segment
|
56,344
|
55,909
|
61,956
|
61,625
|
235,834
|
|
43,602
|
59,665
|
52,067
|
56,213
|
211,547
|
Adjusted EBIT %
|
21.0 %
|
21.0 %
|
22.5 %
|
22.5 %
|
21.7
%
|
|
16.2 %
|
20.8 %
|
19.3 %
|
19.8 %
|
19.1
%
|
Adjusted
D&A 2
|
7,336
|
7,317
|
7,286
|
7,892
|
29,831
|
|
7,797
|
7,916
|
7,675
|
7,392
|
30,780
|
Adjusted EBITDA -
segment
|
$
63,680
|
$
63,226
|
$
69,242
|
$
69,517
|
$
265,665
|
|
$
51,399
|
$
67,581
|
$
59,742
|
$
63,605
|
$
242,327
|
Adjusted EBITDA %
|
23.7 %
|
23.7 %
|
25.2 %
|
25.3 %
|
24.5
%
|
|
19.1 %
|
23.6 %
|
22.1 %
|
22.4 %
|
21.8
%
|
Pumps &
Process Solutions:
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings
(EBIT)
|
$
14,991
|
$
76,278
|
$
77,433
|
$
71,379
|
$
240,081
|
|
$
44,639
|
$
57,686
|
$
60,592
|
$
74,632
|
$
237,549
|
Rightsizing and other costs
|
414
|
903
|
943
|
3,868
|
6,128
|
|
653
|
2,071
|
4,552
|
6,099
|
13,375
|
Loss
on assets held for sale 1
|
46,946
|
—
|
—
|
—
|
46,946
|
|
—
|
—
|
—
|
—
|
—
|
Adjusted EBIT -
Segment
|
62,351
|
77,181
|
78,376
|
75,247
|
293,155
|
|
45,292
|
59,757
|
65,144
|
80,731
|
250,924
|
Adjusted EBIT %
|
18.9 %
|
22.8 %
|
23.0 %
|
22.9 %
|
21.9
%
|
|
14.7 %
|
18.1 %
|
20.2 %
|
21.8 %
|
18.8
%
|
Adjusted
D&A 2
|
17,548
|
16,199
|
16,018
|
17,004
|
66,769
|
|
17,431
|
17,741
|
18,078
|
17,823
|
71,073
|
Adjusted EBITDA -
segment
|
$
79,899
|
$
93,380
|
$
94,394
|
$
92,251
|
$
359,924
|
|
$
62,723
|
$
77,498
|
$
83,222
|
$
98,554
|
$
321,997
|
Adjusted EBITDA %
|
24.2 %
|
27.6 %
|
27.7 %
|
28.1 %
|
26.9
%
|
|
20.3 %
|
23.5 %
|
25.8 %
|
26.6 %
|
24.2
%
|
Refrigeration
& Food Equipment:
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings
(EBIT)
|
$
24,807
|
$
44,375
|
$
35,211
|
$
14,439
|
$
118,832
|
|
$
29,182
|
$
51,372
|
$
42,434
|
$
13,131
|
$
136,119
|
Rightsizing and other costs
|
2,293
|
666
|
840
|
2,243
|
6,042
|
|
—
|
—
|
451
|
9,498
|
9,949
|
Adjusted EBIT -
Segment
|
27,100
|
45,041
|
36,051
|
16,682
|
124,874
|
|
29,182
|
51,372
|
42,885
|
22,629
|
146,068
|
Adjusted EBIT %
|
8.1 %
|
11.7 %
|
9.7 %
|
5.4 %
|
8.9
%
|
|
8.6 %
|
12.8 %
|
11.1 %
|
6.9 %
|
10.1 %
|
Adjusted D&A 2
|
13,011
|
12,777
|
13,047
|
12,525
|
51,360
|
|
13,579
|
13,524
|
13,533
|
13,541
|
54,177
|
Adjusted EBITDA -
segment
|
$
40,111
|
$
57,818
|
$
49,098
|
$
29,207
|
$
176,234
|
|
$
42,761
|
$
64,896
|
$
56,418
|
$
36,170
|
$
200,245
|
Adjusted
EBITDA %
|
12.0 %
|
15.0 %
|
13.3 %
|
9.5 %
|
12.6 %
|
|
12.6 %
|
16.2 %
|
14.6 %
|
11.1 %
|
13.8
%
|
Total
Segments:
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings
(EBIT) 3
|
$
200,102
|
$ 305,060
|
$ 316,735
|
$ 290,221
|
$
1,112,118
|
|
$
198,596
|
$
271,049
|
$
252,355
|
$
255,193
|
$
977,193
|
Rightsizing and other
costs
|
3,928
|
5,730
|
3,485
|
13,412
|
26,555
|
|
3,127
|
4,458
|
21,561
|
29,441
|
58,587
|
Loss on assets held for sale
1
|
46,946
|
—
|
—
|
—
|
46,946
|
|
—
|
—
|
—
|
—
|
—
|
Adjusted EBIT -
Segment 4
|
250,976
|
310,790
|
320,220
|
303,633
|
1,185,619
|
|
201,723
|
275,507
|
273,916
|
284,634
|
1,035,780
|
Adjusted EBIT %
4
|
14.5 %
|
17.2 %
|
17.5 %
|
17.1 %
|
16.6
%
|
|
12.3 %
|
15.3 %
|
15.7 %
|
15.7 %
|
14.8
%
|
Adjusted D&A
2
|
66,133
|
65,093
|
65,190
|
67,024
|
263,440
|
|
67,267
|
67,708
|
66,691
|
67,314
|
268,980
|
Adjusted EBITDA - segment
4
|
$
317,109
|
$
375,883
|
$ 385,410
|
$ 370,657
|
$
1,449,059
|
|
$
268,990
|
$
343,215
|
$
340,607
|
$
351,948
|
$
1,304,760
|
Adjusted EBITDA %
4
|
18.4 %
|
20.7 %
|
21.1 %
|
20.9 %
|
20.3
%
|
|
16.4 %
|
19.1 %
|
19.5 %
|
19.5 %
|
18.7
%
|
1 Q1
and FY 2019 include a $46,946 loss on assets held for sale for
Finder Pompe S.r.l. ("Finder").
|
2 Adjusted
D&A is depreciation and amortization expense, excluding
depreciation and amortization included within rightsizing and other
costs.
|
3 Refer to Quarterly Segment
Information section for reconciliation of total segment earnings
(EBIT) to net earnings.
|
4 Refer to Additional Information
section for definition.
|
DOVER
CORPORATION
|
REVENUE GROWTH
FACTORS & ADJUSTED GUIDANCE (NON-GAAP)
|
(unaudited)(in
thousands, except per share data*)
|
|
|
Other Non-GAAP
Reconciliations
|
|
|
|
Revenue Growth
Factors
|
|
|
2019
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
Organic
|
|
|
|
|
|
Engineered
Products
|
6.1 %
|
4.9 %
|
7.4 %
|
3.1 %
|
5.4 %
|
Fueling
Solutions
|
20.0 %
|
8.3 %
|
10.7 %
|
5.0 %
|
10.5 %
|
Imaging &
Identification
|
5.5 %
|
(3.1)%
|
4.6 %
|
(1.8)%
|
1.2 %
|
Pumps & Process
Solutions
|
10.0 %
|
6.7 %
|
8.7 %
|
(8.0)%
|
3.9 %
|
Refrigeration &
Food Equipment
|
0.7 %
|
(2.8)%
|
(3.2)%
|
(5.6)%
|
(2.7)%
|
Total
Organic
|
8.3 %
|
2.9 %
|
5.6 %
|
(1.1)%
|
3.8 %
|
Acquisitions
|
0.5 %
|
0.8 %
|
1.0 %
|
0.9 %
|
0.8 %
|
Dispositions
|
(0.1)%
|
(0.5)%
|
(0.5)%
|
(0.6)%
|
(0.5)%
|
Currency
translation
|
(3.4)%
|
(2.5)%
|
(1.6)%
|
(1.0)%
|
(2.0)%
|
Total*
|
5.3 %
|
0.7 %
|
4.5 %
|
(1.8)%
|
2.1 %
|
* Totals may be
impacted by rounding.
|
|
|
|
|
|
|
2019
|
|
Full
Year
|
Organic
|
|
|
United
States
|
|
3.6 %
|
Other
Americas
|
|
1.2 %
|
Europe
|
|
6.5 %
|
Asia
|
|
2.4 %
|
Other
|
|
2.3 %
|
Total
Organic
|
|
3.8 %
|
Acquisitions
|
|
0.8 %
|
Dispositions
|
|
(0.5)%
|
Currency
translation
|
|
(2.0)%
|
Total*
|
|
2.1 %
|
* Totals may be
impacted by rounding.
|
|
|
Adjusted Guidance
Reconciliation
|
2019 Actual
|
2020
Guidance
|
Adjusted net
earnings per share*:
|
|
|
Net earnings
(GAAP)
|
$
4.61
|
$ 5.48 -
5.68
|
Acquisition-related
amortization, net
|
0.70
|
0.66
|
Rightsizing and other
costs, net
|
0.16
|
0.06
|
Loss on extinguishment
of debt
|
0.12
|
—
|
Loss on assets held for
sale
|
0.32
|
—
|
Adjusted net
earnings (Non-GAAP)
|
$
5.93
|
$ 6.20 -
6.40
|
* Per share data and
totals may be impacted by rounding.
|
|
|
DOVER
CORPORATION
|
QUARTERLY SEGMENT
INFORMATION
|
(unaudited)(in
thousands)
|
|
|
2019
|
|
2018
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2019
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2018
|
BOOKINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered
Products
|
$
427,697
|
$
397,420
|
$
426,059
|
$
457,145
|
$
1,708,321
|
|
$
480,513
|
$
425,322
|
$
403,098
|
$
494,622
|
$
1,803,555
|
|
|
|
|
|
|
|
|
|
|
|
|
Fueling
Solutions
|
343,083
|
394,256
|
450,727
|
425,698
|
1,613,764
|
|
360,519
|
392,100
|
383,749
|
376,651
|
1,513,019
|
|
|
|
|
|
|
|
|
|
|
|
|
Imaging &
Identification
|
267,762
|
264,175
|
284,527
|
276,451
|
1,092,915
|
|
270,653
|
294,248
|
258,883
|
282,519
|
1,106,303
|
|
|
|
|
|
|
|
|
|
|
|
|
Pumps & Process
Solutions
|
369,801
|
375,905
|
329,642
|
318,482
|
1,393,830
|
|
342,991
|
345,278
|
340,287
|
358,319
|
1,386,875
|
|
|
|
|
|
|
|
|
|
|
|
|
Refrigeration &
Food Equipment
|
376,998
|
384,365
|
323,422
|
361,970
|
1,446,755
|
|
372,701
|
428,816
|
331,979
|
341,221
|
1,474,717
|
|
|
|
|
|
|
|
|
|
|
|
|
Intra-segment
eliminations
|
(725)
|
(490)
|
(528)
|
872
|
(871)
|
|
(680)
|
(25)
|
(597)
|
(617)
|
(1,919)
|
|
|
|
|
Total consolidated
bookings
|
$
1,784,616
|
$
1,815,631
|
$
1,813,849
|
$
1,840,618
|
$
7,254,714
|
|
$
1,826,697
|
$
1,885,739
|
$
1,717,399
|
$
1,852,715
|
$
7,282,550
|
BACKLOG
|
|
|
|
|
|
|
|
|
|
|
|
Engineered
Products
|
$
451,335
|
$
418,154
|
$
416,025
|
$
452,142
|
|
$
380,846
|
$
375,975
|
$
370,948
|
$
442,519
|
|
|
|
|
|
|
|
|
|
|
Fueling
Solutions
|
185,847
|
186,202
|
223,081
|
205,842
|
|
229,234
|
246,087
|
251,212
|
208,574
|
|
|
|
|
|
|
|
|
|
|
Imaging &
Identification
|
118,177
|
116,810
|
121,877
|
125,775
|
|
131,544
|
133,570
|
123,624
|
118,057
|
|
|
|
|
|
|
|
|
|
|
Pumps & Process
Solutions
|
353,066
|
378,427
|
361,478
|
353,073
|
|
315,020
|
318,891
|
337,420
|
315,230
|
|
|
|
|
|
|
|
|
|
|
Refrigeration &
Food Equipment
|
311,632
|
310,454
|
262,870
|
320,577
|
|
283,250
|
309,440
|
255,783
|
268,991
|
|
|
|
|
|
|
|
|
|
|
Intra-segment
eliminations
|
(403)
|
(141)
|
(252)
|
(249)
|
|
(394)
|
(154)
|
(58)
|
(200)
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
backlog
|
$
1,419,654
|
$
1,409,906
|
$
1,385,079
|
$
1,457,160
|
|
$
1,339,500
|
$
1,383,809
|
$
1,338,929
|
$
1,353,171
|
Bookings Growth
Factors
|
|
|
2019
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
Organic
|
|
|
|
|
|
Engineered
Products
|
(9.3)%
|
(4.9)%
|
6.9 %
|
(6.8)%
|
(4.0)%
|
Fueling
Solutions
|
(2.3)%
|
1.9 %
|
16.5 %
|
11.0 %
|
6.9 %
|
Imaging &
Identification
|
4.5 %
|
(6.4)%
|
13.0 %
|
(0.3)%
|
2.3 %
|
Pumps & Process
Solutions
|
11.0 %
|
12.8 %
|
(0.8)%
|
(9.2)%
|
3.3 %
|
Refrigeration &
Food Equipment
|
2.8 %
|
(9.2)%
|
(1.5)%
|
6.8 %
|
(0.7)%
|
Total
Organic
|
0.4 %
|
(1.5)%
|
6.8 %
|
(0.1)%
|
1.3 %
|
Acquisitions
|
0.6 %
|
0.6 %
|
0.9 %
|
0.9 %
|
0.8 %
|
Dispositions
|
(0.1)%
|
(0.5)%
|
(0.4)%
|
(0.3)%
|
(0.3)%
|
Currency
translation
|
(3.2)%
|
(2.3)%
|
(1.7)%
|
(1.2)%
|
(2.1)%
|
Total*
|
(2.3)%
|
(3.7)%
|
5.6 %
|
(0.7)%
|
(0.4)%
|
* Totals may be
impacted by rounding.
|
|
|
|
|
|
ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2019
(Amounts in thousands
except share data and where otherwise indicated)
Change in Segments
Effective October 1, 2019, the
Company transitioned from a three-segment to a five-segment
structure as a result of a change to its internal organization.
This new structure will increase management efficiency and better
align the Company's operations with its strategic initiatives
and capital allocation priorities across its businesses. All
periods are presented under the new structure.
Acquisitions
The Company did not complete any acquisitions during the fourth
quarter of 2019. For the full year 2019, the Company acquired three
businesses in separate transactions for total consideration of
$216.4 million, net of cash acquired
and including contingent consideration. The businesses were
acquired to complement and expand upon existing operations within
the Fueling Solutions and Pumps & Process Solutions
segments.
Discontinued and Disposed Businesses
The Company did not dispose of any businesses during the fourth
quarter of 2019. For the full year 2019, the Company completed the
sale of Finder, which generated total cash proceeds of $24.2 million. The Finder business was included
in the results of the Pumps & Process Solutions segment. The
sale does not represent a strategic shift that will have a major
effect on operations and financial results and, therefore, did not
qualify for presentation as a discontinued operation.
Rightsizing and Other Costs
During the year ended December 31,
2019, the Company executed several programs in order to
further optimize operations. Rightsizing programs in 2019 included
1) broad-based selling, general and administrative expense
reduction and 2) initiation of footprint consolidation actions.
During the fourth quarter of 2019, the Company recorded rightsizing
and other related costs of $17.9
million which is comprised of $14.8
million of restructuring costs and $3.1 million of other charges. During the full
year 2019, the Company recorded rightsizing and other related costs
of $32.2 million which is comprised
of $26.8 million of restructuring
costs and $5.3 million of other
charges. These costs primarily relate to actions taken on employee
reductions, facility consolidations and site closures, product line
exits and other associated asset charges. During the fourth quarter
and full year 2019, rightsizing and other charges were broad based
across all segments as well as corporate, with costs incurred by
segment as follows:
($ in
millions)
|
2019
|
|
2018
|
|
Q4
|
|
FY
|
|
Q4
|
|
FY
|
Engineered
Products
|
$
|
1.4
|
|
$
|
3.2
|
|
$
|
3.7
|
|
$
|
7.3
|
Fueling
Solutions
|
|
1.6
|
|
|
4.9
|
|
|
6.7
|
|
|
15.3
|
Imaging &
Identification
|
|
4.4
|
|
|
6.4
|
|
|
3.5
|
|
|
12.6
|
Pumps & Process
Solutions
|
|
3.9
|
|
|
6.1
|
|
|
6.1
|
|
|
13.4
|
Refrigeration &
Food Equipment
|
|
2.2
|
|
|
6.0
|
|
|
9.5
|
|
|
10.0
|
Corporate
|
|
4.5
|
|
|
5.6
|
|
|
8.0
|
|
|
14.2
|
Total*
|
$
|
17.9
|
|
$
|
32.2
|
|
$
|
37.4
|
|
$
|
72.8
|
* Totals may be impacted by rounding.
Tax Rate
The effective tax rate was 14.7% and 15.4% for the fourth
quarters of 2019 and 2018, respectively. On a full year basis, the
effective tax rate for 2019 and 2018 was 19.6% and 18.5%,
respectively. The 2019 tax rate was primarily driven by the tax
deduction for share-based awards and other favorable discrete
items, partially offset by the exclusion of capital losses on a
disposition of a business under local tax law. The 2018 tax rate
was impacted by the tax deduction for share-based awards, the
impact of SAB 118 from US Tax Reform, and other favorable discrete
items.
ADDITIONAL INFORMATION (CONTINUED)
FOURTH QUARTER AND FULL YEAR 2019
(Amounts in thousands
except share data and where otherwise indicated)
Share Repurchases
During the year ended December 31,
2019, the Company purchased approximately 1.3 million shares
of its common stock for a total cost of $143.3 million, or $106.64 per share. As of December 31, 2019, 8,360,044 shares remain
authorized for repurchase under the February
2018 share repurchase authorization.
Borrowings
On November 4, 2019, the Company
issued €500 million of 0.750% euro-denominated notes due 2027 and
$300 million of 2.950% notes
due 2029. The proceeds from the sale of euro-denominated notes of
€494.7 million, net of discounts and issuance costs, were used in
part to redeem the €300 million 2.125% notes due 2020. The proceeds
from the sale of notes of $296.9 million, net of discounts and
issuance costs, and the remaining funds from the sale of the
euro-denominated notes, were used to fund the redemption of the
$450 million 4.30% notes due 2021.
The remainder of the proceeds will be used for general corporate
purposes. The early extinguishment of debt resulted in a pre-tax
loss of $23.5 million.
Capitalization
The following table provides a reconciliation of total debt and
net debt to net capitalization to the most directly comparable GAAP
measures:
Net Debt to Net
Capitalization Ratio (Non-GAAP)
|
December 31,
2019
|
December 31,
2018
|
Commercial
paper
|
84,700
|
220,318
|
Notes
payable
|
84,700
|
220,318
|
Long-term
debt
|
2,985,716
|
2,943,660
|
Total debt
|
3,070,416
|
3,163,978
|
Less: Cash and cash
equivalents
|
(397,253)
|
(396,221)
|
Net debt
|
2,673,163
|
2,767,757
|
Add: Stockholders'
equity
|
3,032,660
|
2,768,666
|
Net
capitalization
|
$
5,705,823
|
$
5,536,423
|
Net debt to net
capitalization
|
46.8%
|
50.0 %
|
Quarterly Cash
Flow
|
|
2019
|
2018
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2019
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2018
|
Net Cash Flows
Provided
By (Used In):
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
$
24,524
|
$
208,709
|
$
350,865
|
$
361,208
|
$
945,306
|
$
15,535
|
$
159,205
|
$
243,944
|
$
370,509
|
$
789,193
|
Investing
activities
|
(217,690)
|
(69,755)
|
(48,612)
|
(48,198)
|
(384,255)
|
(122,597)
|
(51,606)
|
(35,922)
|
(35,355)
|
(245,480)
|
Financing
activities
|
36,067
|
(60,596)
|
(277,901)
|
(255,612)
|
(558,042)
|
(289,103)
|
(227,734)
|
(232,476)
|
(148,525)
|
(897,838)
|
|
Quarterly Free
Cash Flow (Non-GAAP)
|
|
2019
|
2018
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2019
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
2018
|
Cash flow from
operating
activities
|
$ 24,524
|
$
208,709
|
$
350,865
|
$
361,208
|
$
945,306
|
$ 15,535
|
$
159,205
|
$
243,944
|
$
370,509
|
$
789,193
|
Less: Capital
expenditures
|
(37,122)
|
(53,970)
|
(46,184)
|
(49,528)
|
(186,804)
|
(44,678)
|
(51,686)
|
(38,192)
|
(36,438)
|
(170,994)
|
Free cash flow
*
|
$
(12,598)
|
$
154,739
|
$
304,681
|
$
311,680
|
$ 758,502
|
$
(29,143)
|
$
107,519
|
$
205,752
|
$
334,071
|
$ 618,199
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
as a
percentage of revenue
|
(0.7)%
|
8.5 %
|
16.7 %
|
17.6 %
|
10.6
%
|
(1.8)%
|
6.0 %
|
11.8 %
|
18.5 %
|
8.8
%
|
Free cash flow
as a
percentage of earnings
from continuing operations
|
(11.9)%
|
78.1 %
|
147.9 %
|
185.4 %
|
111.9
%
|
(26.6)%
|
64.6 %
|
130.8 %
|
211.5 %
|
104.6
%
|
* FY 2019 and 2018 free cash flow includes cash payments related
to restructuring initiatives of $33.3
million and $52.0 million,
respectively. Q4 2019 and 2018 free cash flow includes cash
payments related to restructuring initiatives of $7.4 million and $13.4
million, respectively.
Non-GAAP Disclosures
In an effort to provide investors with additional information
regarding our results as determined by GAAP, Management also
discloses non-GAAP information that Management believes provides
useful information to investors. Adjusted earnings from continuing
operations, adjusted diluted earnings per share from continuing
operations, total segment earnings (EBIT), adjusted EBIT by
segment, adjusted EBIT margin by segment, adjusted EBITDA by
segment, adjusted EBITDA margin by segment, net debt, net
capitalization, net debt to net capitalization ratios, free cash
flow, free cash flow as a percentage of revenue, free cash flow as
a percentage of earnings, and organic revenue growth are not
financial measures under GAAP and should not be considered as a
substitute for earnings from continuing operations, diluted
earnings per share from continuing operations, debt or equity, 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 earnings from continuing operations represents earnings
from continuing operations adjusted for the effect of acquisition-
related amortization, rightsizing and other costs, loss on
extinguishment of debt, loss on assets held for sale, and the Tax
Cuts and Jobs Act. 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 earnings per share from continuing operations
represents adjusted earnings from continuing operations
divided by average diluted shares.
Total segment earnings (EBIT) is defined as earnings from
continuing operations 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 earnings from continuing
operations before income taxes, net interest expense,
corporate expenses, rightsizing and other costs and a 2019 loss on
assets held for sale. 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.
Net debt represents total debt minus cash and cash equivalents.
Net capitalization represents net debt plus stockholders' equity.
Net debt to net capitalization ratio equals net debt divided by net
capitalization. Management believes the net debt to net
capitalization ratio is useful to assess our overall financial
leverage and capacity.
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 earnings from continuing
operations equals free cash flow divided by earnings from
continuing operations. 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.
Investor
Contact:
|
Media
Contact:
|
Andrey
Galiuk
|
Adrian
Sakowicz
|
Vice President -
Corporate Development
|
Vice President -
Communications and Investor Relations
|
(630)
743-5039
|
(630)
743-5131
|
agaliuk@dovercorp.com
|
asakowicz@dovercorp.com
|
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SOURCE Dover