Dover Reports Second Quarter 2020 Results; Re-Initiates Full Year Guidance
DOWNERS GROVE, Ill., July 22, 2020 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the second quarter ended June 30, 2020.
Three Months Ended June 30,
Six Months Ended June 30,
($ in millions, except per share data) 2020 2019 % Change 2020 2019 % Change
U.S. GAAP
Revenue $
1,499 $
1,811 (17) $
3,155 $
3,535 (11)
% %
Net earnings 1 125 198 (37) 301 304 (1)
% %
Diluted EPS 0.86 1.35 (36)
% 2.07 2.07
%
Non-GAAP
Organic revenue change (16) (10)
% %
Adjusted net earnings (2) 164 229 (28) 368 412 (11)
% %
Adjusted diluted EPS 1.13 1.56 (28) 2.53 2.80 (10)
% %
(1) Q2 2020 and 2019 net earnings include rightsizing and other costs of $13.4 million and $5.1 million, respectively. Q2 2020 also includes a $0.6 million expense related to the sale of AMS Chino. Q2 year-to-date 2020 and 2019 net earnings include rightsizing and other costs of $19.6 million and $8.2 million, respectively. Q2
year-to-date 2020 also includes a $4.4 million non-cash gain on the sale of AMS Chino, and year-to-date 2019 includes a $46.9 million non-cash loss on assets held for sale related to Finder.
(2) Q2 2020 and 2019 adjusted net earnings exclude after tax acquisition-related amortization costs of $25.7 million and $26.2 million, respectively, and rightsizing and other costs of $13.4 million and $5.1 million, respectively. Q2 2020 also excludes a $0.6 million expense related to the sale of AMS Chino. Q2 year-to-date 2020
and 2019 adjusted net earnings exclude acquisition-related amortization costs of $51.3 million and $52.9 million, respectively, and rightsizing and other costs of $19.6 million and $8.2 million, respectively. Q2 year-to-date 2020 also excludes a $4.4 million non-cash gain on the sale of AMS 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 June 30, 2020, Dover generated revenue of $1.5 billion, a decline of 17% (-16% organic) compared to the second quarter of the prior year. GAAP net earnings of $125 million decreased 37%, and GAAP diluted EPS of $0.86 was down 36%. On an adjusted basis, net earnings of $164 million declined 28%, and adjusted diluted EPS of $1.13 was down 28% versus the comparable quarter of the prior year.
For the six months ended June 30, 2020, Dover generated revenue of $3.2 billion, a decline of 11% (-10% organic) compared to the first six months of the prior year. GAAP net earnings of $301 million decreased 1%, and GAAP diluted EPS of $2.07 was flat year-over-year. On an adjusted basis, net earnings of $368 million declined 11%, and adjusted diluted EPS of $2.53 was down 10% versus the comparable quarter 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, "We are proud of our work and results in the second quarter. Economic uncertainty and operational disruption caused by the COVID-19 pandemic slowed activity across many markets and made the operating environment undeniably challenging. Our businesses have navigated the quarter well, as we focused on what was and remains within our control: diligently managing our costs and cash flow, providing a safe working environment for our associates and supporting our customers with the critical products they needed to keep their essential operations running.
"As we expected, activity declined across a majority of the markets we serve, albeit the impact varied widely across our diverse portfolio with many businesses proving their profitability and cash flow resilience in challenging conditions. Demand conditions in textile printing, foodservice, below-ground fueling, food retail and automotive aftermarket were particularly challenged, partially offset by relative resilience in biopharma, aerospace & defense, heat exchangers and marking & coding. We remain positioned well for the second half with a higher backlog compared to this time last year, driven by our longer cycle businesses and sequential intra-quarter improvement in many shorter cycle businesses.
"Global lockdowns, travel restrictions, proactive production curtailments and reduced volumes created a challenging operating environment in the second quarter, but our cost controls and continued execution of our multi-year productivity program resulted in a satisfactory decremental margin performance, positioning us well to reach or exceed our annual conversion margin target.
"Looking forward, the demand outlook for the remainder of the year remains uncertain, with activity across most markets improving but not back to business-as-usual. As a result of our improved demand visibility into the third quarter, and our solid margin performance year-to-date, we are making the decision to reinstate our annual guidance, though with a wider range than usual for the mid-year reflecting the fluidity of market conditions. We retain additional flexibility to adjust our cost base if macroeconomic conditions in the second half of the year necessitate a response."
FULL YEAR 2020 GUIDANCE REINSTATED:
In 2020, Dover expects to generate GAAP EPS in the range of $4.16 to $4.41 ($5.00 to $5.25 on an adjusted basis). A full reconciliation between forecasted GAAP and forecasted adjusted EPS is included as an exhibit herein.
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its second 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 Wednesday, July 22, 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 second 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 - SECOND QUARTER 2020
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
---
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Revenue $
1,499,175 $
1,810,706 $
3,155,114 $
3,535,463
Cost of goods and services 947,577 1,138,113 1,991,273 2,239,328
Gross profit 551,598 672,593 1,163,841 1,296,135
Selling, general, and administrative expenses 366,740 396,634 753,681 805,100
Loss on assets held for sale - 46,946
Operating earnings 184,858 275,959 410,160 444,089
Interest expense 28,711 31,754 55,979 63,562
Interest income (728) (945) (1,911) (1,835)
Loss (gain) on sale of a business 781 (5,770)
Other income, net (735) (4,589) (8,467) (5,695)
Earnings before provision for income taxes 156,829 249,739 370,329 388,057
Provision for income taxes 32,063 51,654 69,284 84,267
Net earnings $
124,766 $
198,085 $
301,045 $
303,790
Net earnings per share:
Basic $
0.87 $
1.36 $
2.09 $
2.09
Diluted $
0.86 $
1.35 $
2.07 $
2.07
Weighted average shares outstanding:
Basic 143,955 145,366 144,107 145,227
Diluted 144,995 147,179 145,359 147,041
Dividends paid per common share $
0.49 $
0.48 $
0.98 $
0.96
* Per share data may be impacted by rounding.
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2020 2019
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2019
REVENUE
---
Engineered Products $
408,160 $
342,380 $
750,540 $
418,851 $
429,928 $
848,779 $
426,689 $
422,089 $
1,697,557
Fueling Solutions 359,982 326,495 686,477 373,050 390,586 763,636 411,769 444,772 1,620,177
Imaging & 256,765 227,977 484,742 268,354 266,588 534,942 275,109 274,420 1,084,471
Identification
Pumps & Process 319,536 309,095 628,631 330,219 338,924 669,143 341,337 328,048 1,338,528
Solutions
Refrigeration & Food 311,913 293,527 605,440 334,643 385,474 720,117 370,335 306,165 1,396,617
Equipment
Intra-segment (417) (299) (716) (360) (794) (1,154) 106 95 (953)
eliminations
Total consolidated $
1,655,939 $1,499,175 $3,155,114 $
1,724,757 $
1,810,706 $
3,535,463 $
1,825,345 $
1,775,589 $
7,136,397
revenue
NET EARNINGS
---
Segment Earnings:
Engineered $
69,094 $
47,702 $
116,796 $
67,119 $
77,129 $
144,248 $
74,367 $
73,233 $
291,848
Products
Fueling Solutions 53,498 47,214 100,712 37,230 52,637 89,867 68,069 73,937 231,873
Imaging & 51,482 38,046 89,528 55,955 54,641 110,596 61,655 57,233 229,484
Identification
Pumps & Process 66,079 67,702 133,781 14,991 76,278 91,269 77,433 71,379 240,081
Solutions (1)
Refrigeration & Food 23,529 11,459 34,988 24,807 44,375 69,182 35,211 14,439 118,832
Equipment (2)
Total segment 263,682 212,123 475,805 200,102 305,060 505,162 316,735 290,221 1,112,118
earnings (EBIT)
Corporate expense / 24,097 27,311 51,408 30,866 24,512 55,378 28,658 63,781 147,817
other (3)
Interest expense 27,268 28,711 55,979 31,808 31,754 63,562 31,410 30,846 125,818
Interest income (1,183) (728) (1,911) (890) (945) (1,835) (1,263) (1,428) (4,526)
Earnings before 213,500 156,829 370,329 138,318 249,739 388,057 257,930 197,022 843,009
provision for income
taxes
Provision for income 37,221 32,063 69,284 32,613 51,654 84,267 51,924 28,900 165,091
taxes
Net earnings $
176,279 $
124,766 $
301,045 $
105,705 $
198,085 $
303,790 $
206,006 $
168,122 $
677,918
SEGMENT MARGIN
---
Engineered Products 16.9 % 13.9 % 15.6 % 16.0 % 17.9 % 17.0 % 17.4 % 17.4 % 17.2 %
Fueling Solutions 14.9 % 14.5 % 14.7 % 10.0 % 13.5 % 11.8 % 16.5 % 16.6 % 14.3 %
Imaging & 20.1 % 16.7 % 18.5 % 20.9 % 20.5 % 20.7 % 22.4 % 20.9 % 21.2 %
Identification
Pumps & Process 20.7 % 21.9 % 21.3 % 4.5 % 22.5 % 13.6 % 22.7 % 21.8 % 17.9 %
Solutions (1)
Refrigeration & Food 7.5 % 3.9 % 5.8 % 7.4 % 11.5 % 9.6 % 9.5 % 4.7 % 8.5 %
Equipment (2)
Total segment 15.9 % 14.1 % 15.1 % 11.6 % 16.8 % 14.3 % 17.4 % 16.3 % 15.6 %
operating margin
DEPRECIATION AND AMORTIZATION EXPENSE
---
Engineered Products $
10,122 $
9,722 $
19,844 $
10,359 $
10,452 $
20,811 $
10,095 $
10,126 $
41,032
Fueling Solutions 18,339 17,968 36,307 17,879 18,945 36,824 18,744 19,477 75,045
Imaging & 8,769 9,224 17,993 7,435 7,413 14,848 7,360 8,322 30,530
Identification
Pumps & Process 18,336 17,572 35,908 17,548 16,201 33,749 16,018 17,817 67,584
Solutions
Refrigeration & Food 11,548 11,421 22,969 13,011 12,777 25,788 13,047 12,525 51,360
Equipment
Corporate 1,638 1,696 3,334 1,506 1,981 3,487 1,523 1,726 6,736
Total depreciation $
68,752 $
67,603 $
136,355 $
67,738 $
67,769 $
135,507 $
66,787 $
69,993 $
272,287
and amortization
expense
(1) Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder Pompe S.r.l.
(2) Q1, Q2, and Q2 YTD includes a $6,551 gain, a $781 expense and a $5,770 net gain on the sale of the Chino, California branch of The AMS Group ("AMS Chino"), respectively. Q2 and Q2 YTD also include a $3,640 write-off of assets.
(3) 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
---
2020 2019
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2019
Net earnings per share:
Basic $
1.22 $
0.87 $
2.09 $
0.73 $
1.36 $
2.09 $
1.42 $
1.16 $
4.67
Diluted $
1.21 $
0.86 $
2.07 $
0.72 $
1.35 $
2.07 $
1.40 $
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 $
301,045 $
105,705 $
198,085 $
303,790 $
206,006 $
168,122 $
677,918
Weighted average shares outstanding:
Basic 144,259 143,955 144,107 145,087 145,366 145,227 145,372 144,966 145,198
Diluted 145,782 144,995 145,359 146,911 147,179 147,041 147,051 146,790 146,992
* 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 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2019
Adjusted net earnings:
Net earnings $
176,279 $
124,766 $
301,045 $
105,705 $
198,085 $
303,790 $
206,006 $
168,122 $
677,918
Acquisition-related amortization, pre- 34,062 34,101 68,163 35,635 34,997 70,632 34,244 33,460 138,336
tax (1)
Acquisition-related amortization, tax (8,411) (8,451) (16,862) (8,964) (8,777) (17,741) (8,624) (8,403) (34,768)
impact (2)
Rightsizing and other costs, pre-tax (3) 7,859 16,840 24,699 3,963 6,457 10,420 3,807 17,926 32,153
Rightsizing and other costs, tax (1,605) (3,452) (5,057) (861) (1,377) (2,238) (806) (3,745) (6,789)
impact (2)
Loss on extinguishment of debt, pre- - 23,543 23,543
tax 4
Loss on extinguishment of debt, tax - (5,163) (5,163)
impact (2)
Loss on assets held for sale 5 - 46,946 46,946 46,946
(Gain) loss on disposition, pre-tax 6 (6,551) 781 (5,770)
(Gain) loss on disposition, tax-impact (2) 1,592 (190) 1,402
Adjusted net earnings $
203,225 $
164,395 $
367,620 $
182,424 $
229,385 $
411,809 $
234,627 $
225,740 $
872,176
Adjusted diluted net earnings per share:
Diluted net earnings per share $
1.21 $
0.86 $
2.07 $
0.72 $
1.35 $
2.07 $
1.40 $
1.15 $
4.61
Acquisition-related amortization, pre- 0.23 0.24 0.47 0.24 0.24 0.48 0.23 0.23 0.94
tax (1)
Acquisition-related amortization, tax (0.06) (0.06) (0.12) (0.06) (0.06) (0.12) (0.06) (0.06) (0.24)
impact (2)
Rightsizing and other costs, pre-tax (3) 0.05 0.12 0.17 0.03 0.04 0.07 0.03 0.12 0.22
Rightsizing and other costs, tax (0.01) (0.02) (0.03) (0.01) (0.01) (0.02) (0.01) (0.03) (0.06)
impact (2)
Loss on extinguishment of debt, pre- - 0.16 0.16
tax 4
Loss on extinguishment of debt, tax - (0.04) (0.04)
impact (2)
Loss on assets held for sale 5 - 0.32 0.32 0.32
(Gain) loss on disposition, pre-tax 6 (0.04) (0.04)
(Gain) loss on disposition, tax-impact (2) 0.01 0.01
Adjusted diluted net earnings per $
1.39 $
1.13 $
2.53 $
1.24 $
1.56 $
2.80 $
1.60 $
1.54 $
5.93
share
(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.
* 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 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2019
ADJUSTED SEGMENT EBIT AND ADJUSTED
EBITDA
---
Engineered Products:
---
Segment earnings (EBIT) $
69,094 $
47,702 $
116,796 $
67,119 $
77,129 $
144,248 $
74,367 $
73,233 $
291,848
Rightsizing and other costs 361 4,169 4,530 80 1,125 1,205 590 1,355 3,150
Adjusted EBIT - Segment 69,455 51,871 121,326 67,199 78,254 145,453 74,957 74,588 294,998
Adjusted EBIT % 17.0
% 15.2
% 16.2 16.0
% 18.2
% 17.1 17.6
% 17.7
% 17.4
%
%
%
Adjusted D&A (2) 10,122 9,722 19,844 10,359 9,855 20,214 10,095 10,126 40,435
Adjusted EBITDA - segment $
79,577 $
61,593 $
141,170 $
77,558 $
88,109 $
165,667 $
85,052 $
84,714 $
335,433
Adjusted EBITDA % 19.5
% 18.0
% 18.8 18.5
% 20.5
% 19.5 19.9
% 20.1
% 19.8
%
%
%
Fueling Solutions:
---
Segment earnings (EBIT) $
53,498 $
47,214 $
100,712 $
37,230 $
52,637 $
89,867 $
68,069 $
73,937 $
231,873
Rightsizing and other costs 1,493 868 2,361 752 1,768 2,520 811 1,554 4,885
Adjusted EBIT - Segment 54,991 48,082 103,073 37,982 54,405 92,387 68,880 75,491 236,758
Adjusted EBIT % 15.3
% 14.7
% 15.0 10.2
% 13.9
% 12.1 16.7
% 17.0
% 14.6
%
%
%
Adjusted D&A (2) 18,339 17,783 36,122 17,879 18,945 36,824 18,744 19,477 75,045
Adjusted EBITDA - segment $
73,330 $
65,865 $
139,195 $
55,861 $
73,350 $
129,211 $
87,624 $
94,968 $
311,803
Adjusted EBITDA % 20.4
% 20.2
% 20.3 15.0
% 18.8
% 16.9 21.3
% 21.4
% 19.2
%
%
%
Imaging & Identification:
---
Segment earnings (EBIT) $
51,482 $
38,046 $
89,528 $
55,955 $
54,641 $
110,596 $
61,655 $
57,233 $
229,484
Rightsizing and other costs 264 (527) (263) 389 1,268 1,657 301 4,392 6,350
Adjusted EBIT - Segment 51,746 37,519 89,265 56,344 55,909 112,253 61,956 61,625 235,834
Adjusted EBIT % 20.2
% 16.5
% 18.4 21.0
% 21.0
% 21.0 22.5
% 22.5
% 21.7
%
%
%
Adjusted D&A (2) 8,769 9,224 17,993 7,336 7,317 14,653 7,286 7,892 29,831
Adjusted EBITDA - segment $
60,515 $
46,743 $
107,258 $
63,680 $
63,226 $
126,906 $
69,242 $
69,517 $
265,665
Adjusted EBITDA % 23.6
% 20.5
% 22.1 23.7
% 23.7
% 23.7 25.2
% 25.3
% 24.5
%
%
%
Pumps & Process Solutions:
---
Segment earnings (EBIT) $
66,079 $
67,702 $
133,781 $
14,991 $
76,278 $
91,269 $
77,433 $
71,379 $
240,081
Rightsizing and other costs 3,846 4,691 8,537 414 903 1,317 943 3,868 6,128
Loss on assets held for sale (1) - 46,946 46,946 46,946
Adjusted EBIT - Segment 69,925 72,393 142,318 62,351 77,181 139,532 78,376 75,247 293,155
Adjusted EBIT % 21.9
% 23.4
% 22.6 18.9
% 22.8
% 20.9 23.0
% 22.9
% 21.9
%
%
%
Adjusted D&A (2) 16,230 16,816 33,046 17,548 16,199 33,747 16,018 17,004 66,769
Adjusted EBITDA - segment $
86,155 $
89,209 $
175,364 $
79,899 $
93,380 $
173,279 $
94,394 $
92,251 $
359,924
Adjusted EBITDA % 27.0
% 28.9
% 27.9 24.2
% 27.6
% 25.9 27.7
% 28.1
% 26.9
%
%
%
Refrigeration & Food Equipment:
---
Segment earnings (EBIT) $
23,529 $
11,459 $
34,988 $
24,807 $
44,375 $
69,182 $
35,211 $
14,439 $
118,832
Rightsizing and other costs 704 6,016 6,720 2,293 666 2,959 840 2,243 6,042
(Gain) loss on disposition (3) (6,551) 781 (5,770)
Adjusted EBIT - Segment 17,682 18,256 35,938 27,100 45,041 72,141 36,051 16,682 124,874
Adjusted EBIT % 5.7
% 6.2
% 5.9 8.1
% 11.7
% 10.0 9.7
% 5.4
% 8.9
%
% %
Adjusted D&A (2) 11,548 11,421 22,969 13,011 12,777 25,788 13,047 12,525 51,360
Adjusted EBITDA - segment $
29,230 $
29,677 $
58,907 $
40,111 $
57,818 $
97,929 $
49,098 $
29,207 $
176,234
Adjusted EBITDA % 9.4
% 10.1
% 9.7 12.0
% 15.0
% 13.6 13.3
% 9.5
% 12.6
%
%
%
Total Segments:
---
Segment earnings (EBIT) 4 $
263,682 $
212,123 $
475,805 $
200,102 $
305,060 $
505,162 $
316,735 $
290,221 $
1,112,118
Rightsizing and other costs 6,668 15,217 21,885 3,928 5,730 9,658 3,485 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 (5,770)
Adjusted EBIT - Segment 5 263,799 228,121 491,920 250,976 310,790 561,766 320,220 303,633 1,185,619
Adjusted EBIT % 4 15.9
% 15.2
% 15.6 14.5
% 17.2
% 15.9 17.5
% 17.1
% 16.6
%
%
%
Adjusted D&A (2) 65,008 64,966 129,974 66,133 65,093 131,226 65,190 67,024 263,440
Adjusted EBITDA - segment 5 $
328,807 $
293,087 $
621,894 $
317,109 $
375,883 $
692,992 $
385,410 $
370,657 $
1,449,059
Adjusted EBITDA % 5 19.9
% 19.5
% 19.7 18.4
% 20.7
% 19.6 21.1
% 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, and Q2 YTD includes a $6,551 gain, a $781 expense and a $5,770 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
Q2 Q2 YTD
Organic
Engineered (20.1) (11.1)
Products % %
Fueling (14.8) (8.9)
Solutions %
%
Imaging & (14.0) (9.2)
Identification %
%
Pumps & (8.8) (5.0)
Process
Solutions % %
Refrigeration
& Food % %
Equipment (20.2) (12.8)
Total Organic (16.0) (9.5)
%
%
Acquisitions 0.7 0.8
% %
Dispositions (0.7) (0.7)
% %
Currency (1.2) (1.4)
translation
% %
Total* (17.2) (10.8)
% %
* Totals may be impacted by rounding.
2020
Q2
Organic
United States (10.3)
%
Other Americas (33.5)
%
Europe (19.5)
%
Asia (14.3)
%
Other (33.1)
%
Total Organic (16.0)
%
Acquisitions 0.7
%
Dispositions (0.7)
%
Currency translation (1.2)
%
Total* (17.2)
%
* Totals may be impacted by rounding.
Adjusted EPS Guidance Reconciliation
---
Range
2020
Guidance
for
Earnings
per Share
(GAAP) $
4.16 $
4.41
Acquisition-
related
amortization,
net 0.71
Rightsizing
and other
costs, net 0.16
Gain on
disposition,
net (0.03)
2020
Guidance
for
Adjusted
Earnings
per Share
(Non-
GAAP) $
5.00 $
5.25
DOVER CORPORATION
QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)
(unaudited)(in thousands)
Quarterly Cash Flow
---
2020 2019
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2019
Net Cash Flows Provided By (Used
In):
Operating activities $
75,863 $
271,809 $
347,672 $
24,524 $
208,709 $
233,233 $
350,865 $
361,208 $
945,306
Investing activities (230,511) (67,763) (298,274) (217,690) (69,755) (287,445) (48,612) (48,198) (384,255)
Financing activities 280,954 (67,458) 213,496 36,067 (60,596) (24,529) (277,901) (255,612) (558,042)
Quarterly Free Cash Flow (Non-GAAP)
---
2020 2019
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2019
Cash flow from operating $
75,863 $
271,809 $
347,672 $
24,524 $
208,709 $
233,233 $
350,865 $
361,208 $
945,306
activities
Less: Capital expenditures (40,172) (38,999) (79,171) (37,122) (53,970) (91,092) (46,184) (49,528) (186,804)
Free cash flow $
35,691 $
232,810 $
268,501 $
(12,598) $
154,739 $
142,141 $
304,681 $
311,680 $
758,502
Free cash flow as a 2.2
% 15.5
% 8.5 (0.7) 8.5
% 4.0 16.7
% 17.6
% 10.6
% %
%
%
percentage of revenue
Free cash flow as a 20.2 186.6 89.2 (11.9) 78.1
% 46.8 147.9 185.4 111.9
% %
% %
% % %
%
percentage of net earnings
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
2020 2019
Q1 Q2 Q2 YTD Q1 Q2 Q2 YTD Q3 Q4 FY 2019
BOOKINGS
---
Engineered Products $
414,972 $
278,373 $
693,345 $
427,697 $
397,420 $
825,117 $
426,059 $
457,145 $
1,708,321
Fueling Solutions 373,070 311,498 684,568 343,083 394,256 737,339 450,727 425,698 1,613,764
Imaging & 272,604 221,315 493,919 267,762 264,175 531,937 284,527 276,451 1,092,915
Identification
Pumps & Process 369,403 275,872 645,275 369,801 375,905 745,706 329,642 318,482 1,393,830
Solutions
Refrigeration & Food 355,157 326,400 681,557 376,998 384,365 761,363 323,422 361,970 1,446,755
Equipment
Intra-segment (375) (460) (835) (725) (490) (1,215) (528) 872 (871)
eliminations
Total consolidated $
1,784,831 $
1,412,998 $
3,197,829 $
1,784,616 $
1,815,631 $
3,600,247 $
1,813,849 $
1,840,618 $
7,254,714
bookings
BACKLOG
---
Engineered Products $
453,867 $
378,874 $
451,335 $
418,154 $
416,025 $
452,142
Fueling Solutions 211,518 199,305 185,847 186,202 223,081 205,842
Imaging & 170,119 168,904 118,177 116,810 121,877 125,775
Identification
Pumps & Process 397,969 379,090 353,066 378,427 361,478 353,073
Solutions
Refrigeration & Food 356,133 390,368 311,632 310,454 262,870 320,577
Equipment
Intra-segment (159) (367) (403) (141) (252) (249)
eliminations
Total consolidated $
1,589,447 $
1,516,174 $
1,419,654 $
1,409,906 $
1,385,079 $
1,457,160
backlog
Bookings Growth Factors
---
2020
Q2 Q2 YTD
Organic
Engineered Products (29.8) (15.6)
% %
Fueling Solutions (18.2) (5.3)
%
%
Imaging & Identification (16.5) (8.0)
%
%
Pumps & Process Solutions (25.7) (11.9)
% %
Refrigeration & Food Equipment (11.6) (7.9)
%
%
Total Organic (20.6) (10.0)
% %
Acquisitions 0.7 0.9
% %
Dispositions (0.6) (0.7)
% %
Currency translation (1.7) (1.4)
% %
Total* (22.2) (11.2)
% %
* 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
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SOURCE Dover
