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Press release from PR Newswire

Dover Corporation Reports Second Quarter 2012 Results

Wednesday, July 18, 2012

Dover Corporation Reports Second Quarter 2012 Results07:00 EDT Wednesday, July 18, 2012DOWNERS GROVE, Ill., July 18, 2012 /PRNewswire-FirstCall/ -- Reports revenue of $2.2 billion, an increase of 8% over the prior year Delivers quarterly diluted earnings per share from continuing operations of $1.15 Expects full-year revenue growth of 8% - 10%, and full-year earnings per share from continuing operations to be $4.70 - $4.85  Dover Corporation (NYSE: DOV) announced today that for the second quarter ended June 30, 2012, revenue was $2.2 billion, an increase of 8% over the prior-year period. The revenue increase was driven by organic growth of 3% and a 7% increase from acquisitions, offset in part by a 2% unfavorable impact from foreign exchange. Earnings from continuing operations were $212.9 million, or $1.15 diluted earnings per share ("EPS"), compared to $239.2 million, or $1.26 EPS, in the prior-year period, representing decreases in earnings from continuing operations and EPS of 11% and 9%, respectively. Excluding $0.12 of tax benefits in the prior-year period, EPS from continuing operations increased 1% in the 2012 second quarter.Revenue for the six months ended June 30, 2012 was $4.2 billion, an increase of 11% over the prior-year period, reflecting organic growth of 6%, a 6% increase from acquisitions and a 1% unfavorable impact from foreign exchange. Earnings from continuing operations for the six months ended June 30, 2012 were $409.7 million, or $2.20 EPS, compared to $414.0 million, or $2.18 EPS in the prior-year period, representing a decrease in earnings from continuing operations of 1% and an increase in EPS of 1%. Excluding the impact of tax benefits of $0.16 EPS in the prior-year period, adjusted diluted EPS for the six months ended June 30, 2012 increased 9%.Commenting on the second quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "Our strong positions in the energy, handset and refrigeration & food equipment markets enabled us to offset significant macroeconomic headwinds, most notably a weak European economy.  While our second quarter results were less than we expected, business activity remains solid in most of our businesses as evidenced by our 0.99 book-to-bill.""I was especially encouraged with increasing order rates for our new products connected with OEM handset launches. The continuation of this activity, coupled with our solid outlook for our businesses serving the oil production, downstream energy, fast moving consumer goods and U.S. industrial markets, give me confidence that we will be able to deliver a stronger second half of 2012.""Looking forward, we now expect full-year 2012 revenue growth of 8% - 10%, comprised of organic revenue growth of 3% - 5%, plus growth from completed acquisitions of 5%.  Based on this revenue assumption, we expect full-year diluted EPS from continuing operations in the range of $4.70 - $4.85."Net earnings for the second quarter of 2012 were $214.1 million or $1.15 EPS, including a net gain from discontinued operations of $1.2 million, compared to net earnings of $249.8 million, or $1.32 EPS, for the same period of 2011, which included a gain from discontinued operations of $10.6 million, or $0.06 EPS. Net earnings for the six months ended June 30, 2012 were $410.2 million, or $2.20 EPS, including a net gain from discontinued operations of $0.4 million, compared to net earnings of $444.7 million, or $2.34 EPS for the same period of 2011, which included a gain from discontinued operations of $30.7 million or $0.16 EPS.Dover will host a webcast of its second quarter 2012 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Wednesday, July 18, 2012. The webcast can be accessed at the Dover Corporation website at www.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 also be found on the company's website. About Dover: Dover Corporation is a multi-billion dollar diversified global manufacturer. For over 50 years, Dover has been providing its customers with outstanding products and services that reflect the company's commitment to operational excellence, innovation and market leadership. The company focuses on innovative equipment and components, specialty systems and support services through its four major operating segments: Communication Technologies, Energy, Engineered Systems and Printing & Identification. Dover is headquartered in Downers Grove, Illinois and employs 35,000 people worldwide. Dover Corporation is traded on the New York Stock Exchange under "DOV." Additional information is available on the company's website at www.dovercorporation.com. Forward-Looking Statement: This press release contains "forward-looking" statements within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, industries in which Dover companies operate and the U.S. and global economies. Statements in this press release that are not historical may be indicated by words or phrases such as "anticipates," "expects," "believes," "indicates," "suggests," "will," "plans," "supports," "projects," "should," "would," "could," "hope," "forecast" and "management is of the opinion," use of future tense and similar words or phrases. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, uncertainties in the credit and capital markets, interest rates, currency exchange rates, the world economy and sovereign credit, especially in Europe; political events and possible future terrorist threats that could impact countries where Dover does business or the worldwide economy; the impact of natural disasters and their effect on global supply chains and energy markets; increases in the cost of raw materials; the Company's ability to achieve expected savings from integration, synergy and other cost-control initiatives; the ability to identify and successfully consummate value-adding acquisition opportunities; increased competition and pricing pressures in the markets served by Dover's operating companies; the ability of Dover's companies to expand into new geographic markets and to anticipate and meet customer demands for new products and product enhancements; the impact of loss of a single-source manufacturing facility; changes in customer demand; a downgrade in Dover's credit ratings; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints; domestic and foreign governmental and public policy changes including environmental regulations, tax policies, export subsidy programs, R&E credits and other similar programs; unforeseen developments in contingencies such as litigation; protection and validity of patent and other intellectual property rights; and the cyclical nature of some of Dover's companies. Dover Corporation refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as its reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause its actual results to differ materially from its current expectations and from the forward-looking statements contained in this press release. Dover Corporation undertakes no obligation to update any forward-looking statement. INVESTOR SUPPLEMENT - SECOND QUARTER 2012DOVER CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS(unaudited)(in thousands, except per share data)Three Months Ended June 30,Six Months Ended June 30,2012201120122011Revenue$2,156,508$1,994,970$4,219,872$3,807,048Cost of goods and services1,338,9111,218,9742,621,9512,319,301Gross profit817,597775,9961,597,9211,487,747Selling and administrative expenses494,050448,399974,930901,826Operating earnings323,547327,597622,991585,921Interest expense, net29,71728,15759,74456,475Other expense, net1421,4772,7642,665Earnings before provision for income taxes and discontinued operations293,688297,963560,483526,781Provision for income taxes80,78658,765150,754112,792Earnings from continuing operations212,902239,198409,729413,989Earnings from discontinued operations, net1,19910,57143530,685Net earnings$214,101$249,769$410,164$444,674Comprehensive earnings$120,514$269,404$357,819$535,970Basic earnings per common share:Earnings from continuing operations$1.16$1.28$2.23$2.22Earnings from discontinued operations, net0.010.06?0.16Net earnings1.171.342.232.38Weighted average shares outstanding183,494186,443183,625186,522Diluted earnings per common share:Earnings from continuing operations$1.15$1.26$2.20$2.18Earnings from discontinued operations, net0.010.06?0.16Net earnings1.151.322.202.34Weighted average shares outstanding185,780189,705186,171189,905Dividends paid per common share$0.315$0.275$0.63$0.55 DOVER CORPORATIONQUARTERLY SEGMENT INFORMATION(unaudited)(in thousands)20122011Q1Q2Q2 YTDQ1Q2Q2 YTDQ3Q4FY 2011REVENUECommunication Technologies$357,575$361,689$719,264$269,582$288,843$558,425$405,357$396,295$1,360,077Energy531,570538,7861,070,356425,424454,327879,751510,608510,3901,900,749Engineered SystemsFluid Solutions180,364211,974392,338163,196178,031341,227173,804162,590677,621Refrigeration & Industrial642,213674,5011,316,714560,453645,5731,206,026649,768568,8442,424,638Eliminations(453)(352)(805)(382)(424)(806)(431)(287)(1,524)822,124886,1231,708,247723,267823,1801,546,447823,141731,1473,100,735Printing & Identification352,332370,173722,505394,627429,497824,124400,515368,3251,592,964Intra-segment eliminations(237)(263)(500)(822)(877)(1,699)(1,015)(1,671)(4,385)Total consolidated revenue$2,063,364$2,156,508$4,219,872$1,812,078$1,994,970$3,807,048$2,138,606$2,004,486$7,950,140NET EARNINGSSegment Earnings:Communication Technologies$46,556$50,322$96,878$47,325$54,527$101,852$53,433$71,097$226,382Energy132,115133,936266,05193,051110,447203,498125,268121,871450,637Engineered Systems122,092133,808255,90098,235128,570226,805125,52992,852445,186Printing & Identification32,60541,67474,27954,63767,967122,60459,44744,483226,534Total Segments333,368359,740693,108293,248361,511654,759363,677330,3031,348,739Corporate expense / other36,54636,33572,88136,11235,39171,50334,08332,393137,979Net interest expense30,02729,71759,74428,31828,15756,47530,06129,060115,596Earnings from continuing operations before provision for income taxes266,795293,688560,483228,818297,963526,781299,533268,8501,095,164Provision for income taxes69,96880,786150,75454,02758,765112,79276,09559,912248,799Earnings from continuing operations196,827212,902409,729174,791239,198413,989223,438208,938846,365Earnings (loss) from discontinued operations, net(764)1,19943520,11410,57130,685(51,158)69,35148,878Net earnings$196,063$214,101$410,164$194,905$249,769444,674$172,280278,289$895,243SEGMENT OPERATING MARGINCommunication Technologies13.0%13.9%13.5%17.6%18.9%18.2%13.2%17.9%16.6%Energy24.9%24.9%24.9%21.9%24.3%23.1%24.5%23.9%23.7%Engineered Systems14.9%15.1%15.0%13.6%15.6%14.7%15.2%12.7%14.4%Printing & Identification9.3%11.3%10.3%13.8%15.8%14.9%14.8%12.1%14.2%Total Segment16.2%16.7%16.4%16.2%18.1%17.2%17.0%16.5%17.0%DEPRECIATION AND AMORTIZATION EXPENSECommunication Technologies$31,513$32,828$64,341$18,685$18,533$37,218$34,360$30,261$101,839Energy21,18423,53344,71718,57318,76537,33819,39921,08277,819Engineered Systems19,58223,91343,49518,41518,81637,23118,33219,21374,776Printing & Identification11,20611,44822,65411,37211,68523,05711,54811,54346,148Corporate7007651,4655866261,2126367132,561$84,185$92,487$176,672$67,631$68,425$136,056$84,275$82,812$303,143 DOVER CORPORATIONQUARTERLY SEGMENT INFORMATION(continued)(unaudited)(in thousands)20122011Q1Q2Q2 YTDQ1Q2Q2 YTDQ3Q4FY 2011BOOKINGSCommunication Technologies$356,386$383,135$739,521$274,611$309,734$584,345$410,616$349,579$1,344,540Energy585,775530,3521,116,127495,125472,543967,668498,212519,5251,985,405Engineered SystemsFluid Solutions184,711204,139388,850173,626175,539349,165174,772158,895682,832Refrigeration & Industrial711,911666,2231,378,134660,449623,9291,284,378602,488625,8402,512,706Eliminations(408)(376)(784)(733)(884)(1,617)179(1,378)(2,816)896,214869,9861,766,200833,342798,5841,631,926777,439783,3573,192,722Printing & Identification347,368357,648705,016438,526386,259824,785384,085353,8491,562,719Intra-segment eliminations(609)(222)(831)(2,736)(3,370)(6,106)(2,452)(3,153)(11,711)Total consolidated bookings$2,185,134$2,140,899$4,326,033$2,038,868$1,963,750$4,002,618$2,067,900$2,003,157$8,073,675BACKLOGCommunication Technologies$435,912$457,624$410,843$431,558$483,512$437,320Energy296,360282,364240,198255,889243,401246,351Engineered SystemsFluid Solutions191,327172,30057,35754,94555,23054,194Refrigeration & Industrial598,910586,824544,995523,011469,876528,118Eliminations(132)(155)(339)(526)(94)(177)790,105758,969602,013577,430525,012582,135Printing & Identification177,511160,311262,629220,619197,792180,871Intra-segment eliminations(987)(647)(704)(1,178)(891)(193)Total consolidated backlog$1,698,901$1,658,621$1,514,979$1,484,318$1,448,826$1,446,484 DOVER CORPORATIONQUARTERLY EARNINGS PER SHARE(unaudited)(in thousands, except per share data)20122011Q1Q2Q2 YTDQ1Q2Q2 YTDQ3Q4FY 2011Basic earnings (loss) per common share:Continuing operations$1.07$1.16$2.23$0.94$1.28$2.22$1.20$1.13$4.55Discontinued operations?0.01?0.110.060.16(0.28)0.380.26Net earnings1.071.172.231.041.342.380.931.514.82Diluted earnings (loss) per common share:Continuing operations$1.05$1.15$2.20$0.92$1.26$2.18$1.19$1.12$4.48Discontinued operations?0.01?0.110.060.16(0.27)0.370.26Net earnings1.051.152.201.031.322.340.911.494.74Adjusted diluted earnings per common share (calculated below):Continuing operations$1.05$1.15$2.20$0.88$1.14$2.02$1.18$1.07$4.26Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:Net earnings (loss):Continuing operations$196,827$212,902$409,729$174,791$239,198$413,989$223,438$208,938$846,365Discontinued operations(764)1,19943520,11410,57130,685(51,158)69,35148,878Net earnings196,063214,101410,164194,905249,769444,674172,280278,289895,243Average shares outstanding:Basic183,737183,494183,625186,659186,443186,522185,770184,686185,882Diluted186,706185,780186,171190,090189,705189,905188,436187,208188,887NOTE:Earnings from continuing operations are adjusted by discrete and other tax items to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:20122011Q1Q2Q2 YTDQ1Q2Q2 YTDQ3Q4FY 2011Adjusted earnings from continuing operations:Earnings from continuing operations$196,827$212,902$409,729$174,791$239,198$413,989$223,438$208,938$846,365Gains (losses) from discrete and other tax items1,432(372)1,0608,01622,33830,3542,3908,59041,334Adjusted earnings from continuing operations$195,395$213,274$408,669$166,775$216,860$383,635$221,048$200,348$805,031Adjusted diluted earnings per common share:Earnings from continuing operations$1.05$1.15$2.20$0.92$1.26$2.18$1.19$1.12$4.48Gains (losses) from discrete and other tax items???0.040.120.160.010.050.22Adjusted earnings from continuing operations$1.05$1.15$2.20$0.88$1.14$2.02$1.18$1.07$4.26 DOVER CORPORATIONQUARTERLY FREE CASH FLOW(unaudited)(in thousands)20122011Q1Q2Q2 YTDQ1Q2Q2 YTDQ3Q4FY 2011Cash flow from operating activities$160,127$252,120$412,247$117,503$205,260$322,763$376,614$358,852$1,058,229Less: Additions to property, plant and equipment(71,429)(74,358)(145,787)(51,379)(72,338)(123,717)(65,000)(83,092)(271,809)Free cash flow$88,698$177,762$266,460$66,124$132,922$199,046$311,614$275,760$786,420Free cash flow as a percentage of earnings from continuing operations45.1%83.5%65.0%37.8%55.6%48.1%139.5%132.0%92.9%Free cash flow as a percentage of revenue4.3%8.2%6.3%3.6%6.7%5.2%14.6%13.8%9.9% SOURCE Dover CorporationFor further information: Paul Goldberg, Vice President - Investor Relations, +1-212-922-1640