Dover Reports Third Quarter 2020 Results; Raises Full Year EPS Guidance
DOWNERS GROVE, Ill., Oct. 20, 2020 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2020.
Three Months Ended
Nine Months Ended
September 30, September 30,
($ in millions, except per share data) 2020 2019 % 2020 2019 %
Change Change
U.S. GAAP
Revenue $
1,748 $
1,825 (4) $
4,903 $
5,361 (9)
% %
Net earnings 1 200 206 (3) 501 510 (2)
% %
Diluted EPS 1.38 1.40 (1) 3.45 3.47 (1)
% %
Non-GAAP
Organic revenue change (5) (8)
% %
Adjusted net earnings (2) 232 235 (1) 599 646 (7)
% %
Adjusted diluted EPS 1.60 1.60
% 4.12 4.40 (6)
%
(1) Q3 2020 and 2019 net
earnings include rightsizing
and other costs of $4.5 million
and $3.0 million, respectively.
Q3 2020 also includes an
additional $0.4 million expense
related to the sale of Chino
completed earlier in the year.
Year-to-date 2020 and 2019
net earnings include
rightsizing and other costs of
$24.1 million and $11.2
million, respectively. Year-
to-date 2020 also includes a
$3.9 million non-cash gain on
the sale of Chino, and year-
to-date 2019 includes a $46.9
million non-cash loss on
assets held for sale related to
Finder.
(2) Q3 2020 and 2019 adjusted
net earnings exclude after tax
acquisition-related
amortization costs of $26.5
million and $25.6 million,
respectively, and rightsizing
and other costs of $4.5 million
and $3.0 million, respectively.
Q3 2020 also excludes an
additional $0.4 million expense
related to the sale of Chino
completed earlier in the year.
Year-to-date 2020 and 2019
adjusted net earnings exclude
acquisition-related
amortization costs of $77.8
million and $78.5 million,
respectively, and rightsizing
and other costs of $24.1
million and $11.2 million,
respectively. Year-to-date
2020 also excludes a $3.9
million non-cash gain on the
sale of Chino, and year-to-
date 2019 excludes a $46.9
million non-cash loss on
assets held for sale related to
Finder.
For the quarter ended September 30, 2020, Dover generated revenue of $1.7 billion, a decline of 4% (-5% organic) compared to the third quarter of the prior year. GAAP net earnings of $200 million decreased 3%, and GAAP diluted EPS of $1.38 was down 1%. On an adjusted basis, net earnings of $232 million declined 1%, and adjusted diluted EPS of $1.60 was flat versus the comparable quarter of the prior year.
For the nine months ended September 30, 2020, Dover generated revenue of $4.9 billion, a decline of 9% (-8% organic) compared to the first nine months of the prior year. GAAP net earnings of $501 million decreased 2%, and GAAP diluted EPS of $3.45 declined 1% year-over-year. On an adjusted basis, net earnings of $599 million declined 7%, and adjusted diluted EPS of $4.12 was down 6% versus the comparable period of the prior year.
A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Our third quarter results reflect the continued recovery in most of the markets we serve, as well as strong execution by our teams around the world. Operationally, we executed well in the quarter, which allowed us to respond effectively to the improved demand environment, deliver on the backlogs in our long-cycle businesses and positively impact the results for the quarter.
"The trajectory of new orders continued to improve through the third quarter resulting in approximately flat bookings compared to the same quarter last year. We saw activity improve with positive comparable year-over-year organic bookings across multiple markets, most notably marking & coding, automotive aftermarket, food retail, heat exchangers, biopharma, can making, plastics & processing and aerospace & defense. Digital textile printing, compression components and aftermarket, commercial foodservice and waste hauling remained impacted by pandemic-induced disruptions in their respective end-markets.
"This year has undoubtedly been challenging, but it also has provided Dover an opportunity to demonstrate the strength of our diverse portfolio with balanced end market and geographic exposure. Our teams have adapted well to the challenging environment by focusing on what we can control as we serve our customers, maintain safe operating environments and reduce costs. We also continue to make significant strides on our process improvement and product simplification efforts, yielding robust margin performance despite demand softness.
"Looking forward, we recognize the uncertain macroeconomic environment but are cautiously optimistic about the balance of the year and the set-up for 2021. Our year-to-date performance positions us to absorb possible temporary disruptions, should those materialize in the fourth quarter. We are operating with a healthy order backlog and have levers in our possession for continued solid conversion margin performance. As a result of our operating results in Q3, we are raising our full year guidance for 2020."
FULL YEAR 2020 GUIDANCE UPDATE:
Full year 2020 GAAP EPS guidance was raised to $4.52 to $4.57 ($5.40 to $5.45 on an adjusted basis).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its third quarter and year-to-date 2020 results as well as updated 2020 guidance at 9:00 A.M. Eastern Time (8:00 A.M. Central Time) on Tuesday, October 20, 2020. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's third quarter results and its operating segments can be found on the Company's website.
ABOUT DOVER:
Dover is a diversified global manufacturer and solutions provider with annual revenue of approximately $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 60 years, our team of over 23,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.
FORWARD-LOOKING STATEMENTS:
This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, and our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
INVESTOR SUPPLEMENT - THIRD QUARTER 2020
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
---
Three Months Ended
Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
---
Revenue $
1,748,256 $
1,825,345 $
4,903,370 $
5,360,808
Cost of goods and services 1,089,527 1,151,857 3,080,800 3,391,185
Gross profit 658,729 673,488 1,822,570 1,969,623
Selling, general, and administrative expenses 381,831 390,775 1,135,512 1,195,875
Loss on assets held for sale - 46,946
Operating earnings 276,898 282,713 687,058 726,802
Interest expense 27,724 31,410 83,703 94,972
Interest income (960) (1,263) (2,871) (3,098)
Loss (gain) on sale of a business 557 (5,213)
Other income, net (1,420) (5,364) (9,887) (11,059)
Earnings before provision for income taxes 250,997 257,930 621,326 645,987
Provision for income taxes 50,697 51,924 119,981 136,191
Net earnings $
200,300 $
206,006 $
501,345 $
509,796
Net earnings per share:
Basic $
1.39 $
1.42 $
3.48 $
3.51
Diluted $
1.38 $
1.40 $
3.45 $
3.47
Weighted average shares outstanding:
Basic 144,032 145,372 144,082 145,276
Diluted 145,289 147,051 145,313 147,053
Dividends paid per common share $
0.50 $
0.49 $
1.48 $
1.45
* Per share data may be impacted by rounding.
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2020 2019
---
Q1 Q2 Q3 Q3 YTD Q1 Q2 Q3 Q3 YTD Q4 FY 2019
---
REVENUE
---
Engineered Products $
408,160 $
342,380 $
386,562 $
1,137,102 $
418,851 $
429,928 $
426,689 $
1,275,468 $
422,089 $
1,697,557
Fueling Solutions 359,982 326,495 380,511 1,066,988 373,050 390,586 411,769 1,175,405 444,772 1,620,177
Imaging & 256,765 227,977 265,690 750,432 268,354 266,588 275,109 810,051 274,420 1,084,471
Identification
Pumps & Process 319,536 309,095 347,875 976,506 330,219 338,924 341,337 1,010,480 328,048 1,338,528
Solutions
Refrigeration & Food 311,913 293,527 368,395 973,835 334,643 385,474 370,335 1,090,452 306,165 1,396,617
Equipment
Intra-segment (417) (299) (777) (1,493) (360) (794) 106 (1,048) 95 (953)
eliminations
Total consolidated $
1,655,939 $
1,499,175 $1,748,256 $4,903,370 $
1,724,757 $
1,810,706 $
1,825,345 $
5,360,808 $
1,775,589 $
7,136,397
revenue
NET EARNINGS
---
Segment Earnings:
Engineered Products $
69,094 $
47,702 $
64,890 $
181,686 $
67,119 $
77,129 $
74,367 $
218,615 $
73,233 $
291,848
Fueling Solutions 53,498 47,214 66,601 167,313 37,230 52,637 68,069 157,936 73,937 231,873
Imaging & 51,482 38,046 51,928 141,456 55,955 54,641 61,655 172,251 57,233 229,484
Identification
Pumps & Process 66,079 67,702 89,786 223,567 14,991 76,278 77,433 168,702 71,379 240,081
Solutions (1)
Refrigeration & Food 23,529 11,459 40,159 75,147 24,807 44,375 35,211 104,393 14,439 118,832
Equipment (2)
Total segment 263,682 212,123 313,364 789,169 200,102 305,060 316,735 821,897 290,221 1,112,118
earnings (EBIT)
Corporate expense / 24,097 27,311 35,603 87,011 30,866 24,512 28,658 84,036 63,781 147,817
other(3)
Interest expense 27,268 28,711 27,724 83,703 31,808 31,754 31,410 94,972 30,846 125,818
Interest income (1,183) (728) (960) (2,871) (890) (945) (1,263) (3,098) (1,428) (4,526)
Earnings before 213,500 156,829 250,997 621,326 138,318 249,739 257,930 645,987 197,022 843,009
provision for income
taxes
Provision for income 37,221 32,063 50,697 119,981 32,613 51,654 51,924 136,191 28,900 165,091
taxes
Net earnings $
176,279 $
124,766 $
200,300 $
501,345 $
105,705 $
198,085 $
206,006 $
509,796 $
168,122 $
677,918
SEGMENT MARGIN
---
Engineered Products 16.9 % 13.9 % 16.8 % 16.0 % 16.0 % 17.9 % 17.4 % 17.1 % 17.4 % 17.2 %
Fueling Solutions 14.9 % 14.5 % 17.5 % 15.7 % 10.0 % 13.5 % 16.5 % 13.4 % 16.6 % 14.3 %
Imaging & 20.1 % 16.7 % 19.5 % 18.8 % 20.9 % 20.5 % 22.4 % 21.3 % 20.9 % 21.2 %
Identification
Pumps & Process 20.7 % 21.9 % 25.8 % 22.9 % 4.5 % 22.5 % 22.7 % 16.7 % 21.8 % 17.9 %
Solutions (1)
Refrigeration & Food 7.5 % 3.9 % 10.9 % 7.7 % 7.4 % 11.5 % 9.5 % 9.6 % 4.7 % 8.5 %
Equipment (2)
Total segment 15.9 % 14.1 % 17.9 % 16.1 % 11.6 % 16.8 % 17.4 % 15.3 % 16.3 % 15.6 %
operating margin
DEPRECIATION AND AMORTIZATION EXPENSE
---
Engineered Products $
10,122 $
9,722 $
10,717 $
30,561 $
10,359 $
10,452 $
10,095 $
30,906 $
10,126 $
41,032
Fueling Solutions 18,339 17,968 18,014 54,321 17,879 18,945 18,744 55,568 19,477 75,045
Imaging & 8,769 9,224 9,809 27,802 7,435 7,413 7,360 22,208 8,322 30,530
Identification
Pumps & Process 18,336 17,572 17,206 53,114 17,548 16,201 16,018 49,767 17,817 67,584
Solutions
Refrigeration & Food 11,548 11,421 12,081 35,050 13,011 12,777 13,047 38,835 12,525 51,360
Equipment
Corporate 1,638 1,696 1,662 4,996 1,506 1,981 1,523 5,010 1,726 6,736
Total depreciation $
68,752 $
67,603 $
69,489 $
205,844 $
67,738 $
67,769 $
66,787 $
202,294 $
69,993 $
272,287
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, Q3, and Q3 YTD 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of the Chino, California branch of The AMS Group ("AMS Chino"), respectively. Q2 and Q3 YTD 2020 also include a $3,640 write-off of assets.
(3) Q4 and FY 2019 include a $23,543 loss on early extinguishment of debt.
OVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
Earnings Per Share
---
2020 2019
---
Q1 Q2 Q3 Q3 YTD Q1 Q2 Q3 Q3 YTD Q4 FY 2019
---
Net earnings per share:
Basic $
1.22 $
0.87 $
1.39 $
3.48 $
0.73 $
1.36 $
1.42 $
3.51 $
1.16 $
4.67
Diluted $
1.21 $
0.86 $
1.38 $
3.45 $
0.72 $
1.35 $
1.40 $
3.47 $
1.15 $
4.61
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings $
176,279 $
124,766 $
200,300 $
501,345 $
105,705 $
198,085 $
206,006 $
509,796 $
168,122 $
677,918
Weighted average shares outstanding:
Basic 144,259 143,955 144,032 144,082 145,087 145,366 145,372 145,276 144,966 145,198
Diluted 145,782 144,995 145,289 145,313 146,911 147,179 147,051 147,053 146,790 146,992
* Per share data may be impacted by rounding.
DOVER CORPORATION
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
---
2020 2019
---
Q1 Q2 Q3 Q3 YTD Q1 Q2 Q3 Q3 YTD Q4 FY 2019
---
Adjusted net earnings:
Net earnings $
176,279 $
124,766 $
200,300 $
501,345 $
105,705 $
198,085 $
206,006 $
509,796 $
168,122 $
677,918
Acquisition-related amortization, pre- 34,062 34,101 35,325 103,488 35,635 34,997 34,244 104,876 33,460 138,336
tax (1)
Acquisition-related amortization, tax (8,411) (8,451) (8,810) (25,672) (8,964) (8,777) (8,624) (26,365) (8,403) (34,768)
impact (2)
Rightsizing and other costs, pre-tax (3) 7,859 16,840 5,848 30,547 3,963 6,457 3,807 14,227 17,926 32,153
Rightsizing and other costs, tax (1,605) (3,452) (1,343) (6,400) (861) (1,377) (806) (3,044) (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) 781 557 (5,213)
(Gain) loss on disposition, tax-impact (2) 1,592 (190) (135) 1,267
Adjusted net earnings $
203,225 $
164,395 $
231,742 $
599,362 $
182,424 $
229,385 $
234,627 $
646,436 $
225,740 $
872,176
Adjusted diluted net earnings per share:
Diluted net earnings per share $
1.21 $
0.86 $
1.38 $
3.45 $
0.72 $
1.35 $
1.40 $
3.47 $
1.15 $
4.61
Acquisition-related amortization, pre- 0.23 0.24 0.24 0.71 0.24 0.24 0.23 0.71 0.23 0.94
tax (1)
Acquisition-related amortization, tax (0.06) (0.06) (0.06) (0.18) (0.06) (0.06) (0.06) (0.18) (0.06) (0.24)
impact (2)
Rightsizing and other costs, pre-tax (3) 0.05 0.12 0.04 0.21 0.03 0.04 0.03 0.10 0.12 0.22
Rightsizing and other costs, tax (0.01) (0.02) (0.01) (0.04) (0.01) (0.01) (0.01) (0.02) (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 $
1.60 $
4.12 $
1.24 $
1.56 $
1.60 $
4.40 $
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, including working capital adjustments.
* Per share data and totals may be impacted by rounding.
DOVER CORPORATION
QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
---
2020 2019
---
Q1 Q2 Q3 Q3 YTD Q1 Q2 Q3 Q3 YTD Q4 FY 2019
---
ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA
---
Engineered Products:
---
Segment earnings (EBIT) $
69,094 $
47,702 $
64,890 $
181,686 $
67,119 $
77,129 $
74,367 $
218,615 $
73,233 $
291,848
Rightsizing and other costs 361 4,169 2,375 6,905 80 1,125 590 1,795 1,355 3,150
Adjusted EBIT - Segment 69,455 51,871 67,265 188,591 67,199 78,254 74,957 220,410 74,588 294,998
Adjusted EBIT % 17.0
% 15.2
% 17.4
% 16.6 16.0
% 18.2
% 17.6
% 17.3 17.7
% 17.4
%
%
%
Adjusted D&A (2) 10,122 9,722 10,651 30,495 10,359 9,855 10,095 30,309 10,126 40,435
Adjusted EBITDA -Segment $
79,577 $
61,593 $
77,916 $
219,086 $
77,558 $
88,109 $
85,052 $
250,719 $
84,714 $
335,433
Adjusted EBITDA % 19.5
% 18.0
% 20.2
% 19.3 18.5
% 20.5
% 19.9
% 19.7 20.1
% 19.8
%
%
%
Fueling Solutions:
---
Segment earnings (EBIT) $
53,498 $
47,214 $
66,601 $
167,313 $
37,230 $
52,637 $
68,069 $
157,936 $
73,937 $
231,873
Rightsizing and other costs 1,493 868 1,615 3,976 752 1,768 811 3,331 1,554 4,885
Adjusted EBIT - Segment 54,991 48,082 68,216 171,289 37,982 54,405 68,880 161,267 75,491 236,758
Adjusted EBIT % 15.3
% 14.7
% 17.9
% 16.1 10.2
% 13.9
% 16.7
% 13.7 17.0
% 14.6
%
%
%
Adjusted D&A (2) 18,339 17,783 18,014 54,136 17,879 18,945 18,744 55,568 19,477 75,045
Adjusted EBITDA -Segment $
73,330 $
65,865 $
86,230 $
225,425 $
55,861 $
73,350 $
87,624 $
216,835 $
94,968 $
311,803
Adjusted EBITDA % 20.4
% 20.2
% 22.7
% 21.1 15.0
% 18.8
% 21.3
% 18.4 21.4
% 19.2
%
%
%
Imaging & Identification:
---
Segment earnings (EBIT) $
51,482 $
38,046 $
51,928 $
141,456 $
55,955 $
54,641 $
61,655 $
172,251 $
57,233 $
229,484
Rightsizing and other costs 264 (527) 99 (164) 389 1,268 301 1,958 4,392 6,350
Adjusted EBIT - Segment 51,746 37,519 52,027 141,292 56,344 55,909 61,956 174,209 61,625 235,834
Adjusted EBIT % 20.2
% 16.5
% 19.6
% 18.8 21.0
% 21.0
% 22.5
% 21.5 22.5
% 21.7
%
%
%
Adjusted D&A (2) 8,769 9,224 9,809 27,802 7,336 7,317 7,286 21,939 7,892 29,831
Adjusted EBITDA -Segment $
60,515 $
46,743 $
61,836 $
169,094 $
63,680 $
63,226 $
69,242 $
196,148 $
69,517 $
265,665
Adjusted EBITDA % 23.6
% 20.5
% 23.3
% 22.5 23.7
% 23.7
% 25.2
% 24.2 25.3
% 24.5
%
%
%
Pumps & Process Solutions:
---
Segment earnings (EBIT) $
66,079 $
67,702 $
89,786 $
223,567 $
14,991 $
76,278 $
77,433 $
168,702 $
71,379 $
240,081
Rightsizing and other costs 3,846 4,691 1,771 10,308 414 903 943 2,260 3,868 6,128
Loss on assets held for sale (1) - 46,946 46,946 46,946
Adjusted EBIT - Segment 69,925 72,393 91,557 233,875 62,351 77,181 78,376 217,908 75,247 293,155
Adjusted EBIT % 21.9
% 23.4
% 26.3
% 24.0 18.9
% 22.8
% 23.0
% 21.6 22.9
% 21.9
%
%
%
Adjusted D&A (2) 16,230 16,816 17,206 50,252 17,548 16,199 16,018 49,765 17,004 66,769
Adjusted EBITDA -Segment $
86,155 $
89,209 $
108,763 $
284,127 $
79,899 $
93,380 $
94,394 $
267,673 $
92,251 $
359,924
Adjusted EBITDA % 27.0
% 28.9
% 31.3
% 29.1 24.2
% 27.6
% 27.7
% 26.5 28.1
% 26.9
%
%
%
Refrigeration & Food Equipment:
---
Segment earnings (EBIT) $
23,529 $
11,459 $
40,159 $
75,147 $
24,807 $
44,375 $
35,211 $
104,393 $
14,439 $
118,832
Rightsizing and other costs 704 6,016 (971) 5,749 2,293 666 840 3,799 2,243 6,042
(Gain) loss on disposition (3) (6,551) 781 557 (5,213)
Adjusted EBIT - Segment 17,682 18,256 39,745 75,683 27,100 45,041 36,051 108,192 16,682 124,874
Adjusted EBIT % 5.7
% 6.2
% 10.8
% 7.8 8.1
% 11.7
% 9.7
% 9.9 5.4
% 8.9
% % %
Adjusted D&A (2) 11,548 11,421 12,081 35,050 13,011 12,777 13,047 38,835 12,525 51,360
Adjusted EBITDA -Segment $
29,230 $
29,677 $
51,826 $
110,733 $
40,111 $
57,818 $
49,098 $
147,027 $
29,207 $
176,234
Adjusted EBITDA % 9.4
% 10.1
% 14.1
% 11.4 12.0
% 15.0
% 13.3
% 13.5 9.5
% 12.6
%
%
%
Total Segments:
---
Segment earnings (EBIT) 4 $
263,682 $
212,123 $
313,364 $
789,169 $
200,102 $
305,060 $
316,735 $
821,897 $
290,221 $
1,112,118
Rightsizing and other costs 6,668 15,217 4,889 26,774 3,928 5,730 3,485 13,143 13,412 26,555
Loss on assets held for sale (1) - 46,946 46,946 46,946
(Gain) loss on disposition (3) (6,551) 781 557 (5,213)
Adjusted EBIT -Segment 5 263,799 228,121 318,810 810,730 250,976 310,790 320,220 881,986 303,633 1,185,619
Adjusted EBIT % 4 15.9
% 15.2
% 18.2
% 16.5 14.5
% 17.2
% 17.5
% 16.4 17.1
% 16.6
%
%
%
Adjusted D&A (2) 65,008 64,966 67,761 197,735 66,133 65,093 65,190 196,416 67,024 263,440
Adjusted EBITDA -Segment 5 $
328,807 $
293,087 $
386,571 $
1,008,465 $
317,109 $
375,883 $
385,410 $
1,078,402 $
370,657 $
1,449,059
Adjusted EBITDA % 5 19.9
% 19.5
% 22.1
% 20.6 18.4
% 20.7
% 21.1
% 20.1 20.9
% 20.3
%
%
%
(1) Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder.
(2) Adjusted D&A is depreciation and amortization expense, excluding depreciation and amortization included within rightsizing and other costs.
(3) Q1, Q2, Q3, and Q3 YTD 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of a business for AMS Chino, respectively.
4 Refer to Quarterly Segment Information section for reconciliation of total segment earnings (EBIT) to net earnings.
5 Refer to Non-GAAP Disclosures section for definition.
DOVER CORPORATION
REVENUE GROWTH FACTORS (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
---
Revenue Growth Factors
---
2020
Q3 Q3 YTD
---
Organic
Engineered Products (10.4) (10.9)
% %
Fueling Solutions (7.9) (8.5)
% %
Imaging & Identification (7.6) (8.6)
% %
Pumps & Process Solutions (0.9) (3.6)
% %
Refrigeration & Food Equipment 2.6 (7.6)
%
%
---
Total Organic (5.1) (8.0)
% %
Acquisitions 1.0 0.8
% %
Dispositions (0.8) (0.7)
% %
Currency translation 0.7 (0.6)
%
%
---
Total* (4.2) (8.5)
% %
* Totals may be impacted by rounding.
2020
Q3
Organic
United States (4.2)
%
Other Americas (4.7)
%
Europe (4.2)
%
Asia (10.1)
%
Other (5.8)
%
---
Total Organic (5.1)
%
Acquisitions 1.0
%
Dispositions (0.8)
%
Currency translation 0.7
%
---
Total* (4.2)
%
* Totals may be impacted by rounding.
Adjusted EPS Guidance Reconciliation
---
Range
2020
Guidance
for
Earnings
per Share
(GAAP) $
4.52 $
4.57
Acquisition-
related
amortization,
net 0.72
Rightsizing
and other
costs, net 0.19
Gain on
disposition,
net (0.03)
2020
Guidance
for
Adjusted
Earnings
per Share
(Non-
GAAP) $
5.40 $
5.45
DOVER CORPORATION
QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)
(unaudited)(in thousands)
Quarterly Cash Flow
---
2020 2019
Q1 Q2 Q3 Q3 YTD Q1 Q2 Q3 Q3 YTD Q4 FY 2019
---
Net Cash Flows Provided By (Used In):
Operating activities $
75,863 $
271,809 $
339,247 $
686,919 $
24,524 $
208,709 $
350,865 $
584,098 $
361,208 $
945,306
Investing activities (230,511) (67,763) (64,724) (362,998) (217,690) (69,755) (48,612) (336,057) (48,198) (384,255)
Financing activities 280,954 (67,458) (496,832) (283,336) 36,067 (60,596) (277,901) (302,430) (255,612) (558,042)
Quarterly Free Cash Flow (Non-GAAP)
---
2020 2019
---
Q1 Q2 Q3 Q3 YTD Q1 Q2 Q3 Q3 YTD Q4 FY 2019
---
Cash flow from operating activities(1) $
75,863 $
271,809 $
339,247 $
686,919 $
24,524 $
208,709 $
350,865 $
584,098 $
361,208 $
945,306
Less: Capital expenditures (40,172) (38,999) (44,393) (123,564) (37,122) (53,970) (46,184) (137,276) (49,528) (186,804)
Free cash flow $
35,691 $
232,810 $
294,854 $
563,355 $
(12,598) $
154,739 $
304,681 $
446,822 $
311,680 $
758,502
Free cash flow as a percentage of revenue 2.2 15.5
% 16.9
% 11.5 (0.7) 8.5
% 16.7
% 8.3 17.6
% 10.6
%
% %
%
%
Free cash flow as a percentage of net 20.2 186.6 147.2 112.4 (11.9) 78.1
% 147.9 87.6 185.4 111.9
earnings % % %
% % %
% %
%
(1) Q3 2020 YTD cash flow from operating activities reflects benefits from permitted deferrals of tax payments, most significantly in Q2 and Q3, and advanced payments on contracts, most significantly in Q3.
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
2020 2019
---
Q1 Q2 Q3 Q3 YTD Q1 Q2 Q3 Q3 YTD Q4 FY 2019
---
BOOKINGS
---
Engineered Products $
414,972 $
278,373 $
381,139 1,074,484 $
427,697 $
397,420 $
426,059 1,251,176 $
457,145 $
1,708,321
Fueling Solutions 373,070 311,498 383,902 1,068,470 343,083 394,256 450,727 1,188,066 425,698 1,613,764
Imaging & Identification 272,604 221,315 266,423 760,342 267,762 264,175 284,527 816,464 276,451 1,092,915
Pumps & Process Solutions 369,403 275,872 323,801 969,076 369,801 375,905 329,642 1,075,348 318,482 1,393,830
Refrigeration & Food Equipment 355,157 326,400 449,549 1,131,106 376,998 384,365 323,422 1,084,785 361,970 1,446,755
Intra-segment eliminations (375) (460) (926) (1,761) (725) (490) (528) (1,743) 872 (871)
Total consolidated bookings $
1,784,831 $
1,412,998 $
1,803,888 $
5,001,717 $
1,784,616 $
1,815,631 $
1,813,849 $
5,414,096 $
1,840,618 $
7,254,714
BACKLOG
---
Engineered Products $
453,867 $
378,874 $
373,458 $
451,335 $
418,154 $
416,025 $
452,142
Fueling Solutions 211,518 199,305 204,574 185,847 186,202 223,081 205,842
Imaging & Identification 170,119 168,904 171,158 118,177 116,810 121,877 125,775
Pumps & Process Solutions 397,969 379,090 361,631 353,066 378,427 361,478 353,073
Refrigeration & Food Equipment 356,133 390,368 472,140 311,632 310,454 262,870 320,577
Intra-segment eliminations (159) (367) (269) (403) (141) (252) (249)
Total consolidated backlog $
1,589,447 $
1,516,174 $
1,582,692 $
1,419,654 $
1,409,906 $
1,385,079 $
1,457,160
Bookings Growth Factors
---
2020
Q3 Q3 YTD
---
Organic
Engineered Products (11.6) (14.2)
% %
Fueling Solutions (14.2) (8.7)
%
%
Imaging & Identification (9.9) (8.7)
% %
Pumps & Process Solutions (3.7) (9.4)
% %
Refrigeration & Food 41.3 6.7
Equipment % %
---
Total Organic (1.1) (7.0)
% %
Acquisitions 0.8 0.8
% %
Dispositions (0.6) (0.6)
% %
Currency translation 0.4 (0.8)
%
%
---
Total* (0.5) (7.6)
% %
* Totals may be impacted by rounding.
Non-GAAP Measures Definitions
In an effort to provide investors with additional information regarding our results as determined by GAAP, management also discloses non-GAAP information that management believes provides useful information to investors. Adjusted net earnings, adjusted diluted net earnings per share, total segment earnings (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of net earnings, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted net earnings per share, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.
Adjusted net earnings represents net earnings adjusted for the effect of acquisition-related amortization, rightsizing and other costs, loss on extinguishment of debt, loss on assets held for sale, and a gain/loss on disposition. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or Management believes they are not indicative of the Company's ongoing operating costs or gains in a given period.
Adjusted diluted net earnings per share represents adjusted net earnings divided by average diluted shares.
Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.
Adjusted EBIT by Segment is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain/loss on disposition. Adjusted EBIT Margin by Segment is defined as adjusted EBIT by segment divided by segment revenue.
Adjusted EBITDA by Segment is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs. Adjusted EBITDA Margin by Segment is defined as adjusted EBITDA by segment divided by segment revenue.
Management believes these measures are useful to investors to better understand the Company's ongoing profitability as it will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings equals free cash flow divided by net earnings. Management believes that free cash flow and free cash flow ratios are important measures of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue and bookings performance and trends between periods.
Performance Measures Definitions
Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.
Organic bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisition and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.
Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet have satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.
We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.
Investor Contact:
Media Contact:
Andrey Galiuk
Adrian Sakowicz
Vice President - Corporate Development
Vice President - Communications
and Investor Relations
(630) 743-5039
(630) 743-5131
asakowicz@dovercorp.com
agaliuk@dovercorp.com
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SOURCE Dover
