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Press release from PR Newswire

Dover Reports Second Quarter 2013 Results; Provides Full-Year Outlook

Thursday, July 18, 2013

Dover Reports Second Quarter 2013 Results; Provides Full-Year Outlook

07:00 EDT Thursday, July 18, 2013

DOWNERS GROVE, Ill., July 18, 2013 /PRNewswire/ --

  • Reports quarterly revenue of $2.2 billion, an increase of 9% over the prior year
  • Delivers quarterly diluted earnings per share from continuing operations of $1.70, an increase of 55% over last year
  • Achieves adjusted quarterly diluted earnings per share from continuing operations of $1.36, excluding tax benefits of $0.36 and Knowles spin off costs of $0.02, up 24% from an adjusted prior year
  • Reaffirms outlook for full year revenue growth at 7% to 9%
  • Expects diluted earnings per share from continuing operations to be in the range of $5.56 to $5.71 after raising the low end of the range, and including tax benefits and incurred spin off costs

Dover (NYSE: DOV) announced today that for the second quarter ended June 30, 2013, revenue was $2.2 billion, an increase of 9% over the prior year period. The revenue increase was driven by organic growth of 5%, an increase of 4% from acquisitions, and a minor impact from foreign exchange. Earnings from continuing operations were $294.4 million, or $1.70 diluted earnings per share ("EPS"), compared to $205.2 million, or $1.10 EPS, in the prior year period, representing increases of 43% and 55%, respectively.  EPS from continuing operations includes discrete tax items of $0.36 EPS and Knowles spin off costs of $0.02 EPS recognized in the current quarter. Excluding these items, adjusted EPS from continuing operations for the second quarter of 2013 was $1.36, reflecting an increase of 24% over EPS of $1.10 in the prior year period.  

Revenue for the six months ended June 30, 2013 was $4.3 billion, an increase of 7% over the prior year, reflecting organic growth of 2%, a 5% increase from acquisitions, and a minor impact from foreign exchange. Earnings from continuing operations for the six months ended June 30, 2013 were $491.3 million, or $2.82 EPS, compared to $391.6 million, or $2.10 EPS in the prior year period, representing increases of 25% and 34%, respectively.  EPS from continuing operations during this period includes discrete tax items of $0.38 EPS and Knowles spin off costs of $0.02 EPS, compared to ($0.01) EPS of discrete tax items in the prior year. Excluding these items, adjusted EPS from continuing operations for the six months ended June 30, 2013, was $2.46, an increase of 17% over an adjusted EPS of $2.11 in the prior year.

Commenting on the second quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "I am very pleased with our results for the second quarter and the actions we've taken to strengthen our company. The quarter was driven by broad-based growth, particularly among our businesses serving the consumer electronics and refrigeration markets, with solid contribution from our energy and fluids businesses. In all, we posted strong revenue growth of 9%.  Segment margin also expanded, where improved performance at Printing & Identification and Engineered Systems helped drive segment margin to 17.3%, a 30 basis point improvement over last year."

"We also made progress on several important strategic actions in the quarter.  We continued to execute on our share repurchase program, completed four small synergistic acquisitions, and most importantly, announced our intention to spin off several businesses within our Communication Technologies segment to our shareholders, which is progressing as planned.  Taken together, these actions demonstrate Dover's ongoing commitment to create significant shareholder value."

"Looking ahead, 2013 remains largely consistent with the view we previously shared. We continue to expect full year organic revenue growth of 3% to 5%, complemented by acquisition growth of 4%, resulting in total revenue growth of 7% to 9%.  Based on our solid second quarter performance, we are taking up the low end of our earnings guidance range.  In addition, we are adjusting full year guidance to include discrete tax benefits and incurred spin off costs.  As a result, our revised guidance for full year EPS is now $5.56 to $5.71.  This range does not include any prospective Knowles spin off costs to be incurred in the next several quarters."

Net earnings for the second quarter of 2013 were $330.0 million or $1.91 EPS, including earnings from discontinued operations of $35.7 million, or $0.21 EPS, compared to net earnings of $214.1 million, or $1.15 EPS, for the same period of 2012, which included earnings from discontinued operations of $8.9 million, or $0.05 EPS.  Reflected within discontinued operations was a goodwill impairment charge of $18.7 million, net of tax, or $0.11 EPS, connected with the anticipated sale of our electronic test and assembly businesses, and discrete tax benefits of $42.7 million, or $0.25 EPS.

Net earnings for the six months ended June 30, 2013, were $540.1 million, or $3.10 EPS, including net earnings from discontinued operations of $48.7 million, or $0.28 EPS, compared to net earnings of $410.2 million, or $2.20 EPS, for the same period of 2012, which included net earnings from discontinued operations of $18.6 million or $0.10 EPS. Reflected within discontinued operations was a goodwill impairment charge of $18.7 million, net of tax, or $0.11 EPS, connected with the anticipated sale of our electronic test and assembly businesses, and discrete tax benefits of $52.4 million, or $0.30 EPS.

Dover will host a webcast of its second quarter 2013 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, July 18, 2013. The webcast can be accessed on the Dover 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 is a diversified global manufacturer with annual revenues of over $8 billion.  For over 50 years, Dover has been delivering outstanding products and services that reflect its market leadership and commitment to operational and technical excellence. The Company's entrepreneurial business model encourages, promotes and fosters deep customer engagement which has led to Dover's well-established and valued reputation for providing superior customer service and industry-leading product innovation. Dover 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. Headquartered in Downers Grove, Illinois, Dover employs 35,000 people worldwide. Dover is traded on the New York Stock Exchange under "DOV." Additional information is available on our 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, operating and strategic plans, income, earnings, cash flows, changes in operations, operating improvements, industries in which Dover businesses operate and the U.S. and global economies. Statements in this press release that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates," "expects," "believes," "indicates," "suggests," "will," "plans," "supports," "projects," "should," "would," "could," "forecast" and "management is of the opinion," or the use of the 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, the state of the worldwide economy and sovereign credit, especially in Europe; political events that could impact the worldwide economy; the impact of natural disasters and their effect on global supply chains and energy markets; current economic conditions and uncertainties in the credit and capital markets; instability in countries where Dover conducts business; the ability of Dover's businesses to expand into new geographic markets and to anticipate and meet customer demands for new products and product enhancements; increased competition and pricing pressures in the markets served by Dover's businesses; the impact of the proposed spin off and our ability to consummate it on the anticipated time line or terms; the terms and timing of the sale of any business in discontinued operations; the impact of loss of a single-source manufacturing facility; changes in customer demand or loss of a significant customer; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes including environmental regulations, conflict minerals disclosure requirements, and tax policies (including domestic and international export subsidy programs, R&E credits and other similar programs); protection and validity of patent and other intellectual property rights; the ability to identify and successfully consummate value-adding acquisition opportunities;  Dover's ability to achieve expected savings from integration, synergy and other cost-control initiatives; unforeseen developments in contingencies such as litigation; international economic conditions including interest rate and  currency exchange rate fluctuations; possible future terrorist threats and their effect on the worldwide economy; and a downgrade in Dover's credit ratings.  Dover 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 undertakes no obligation to update any forward-looking statement, except as required by law.

 

 

INVESTOR SUPPLEMENT - SECOND QUARTER 2013

 

 

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited)(in thousands, except per share data)

 

 

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

2013

2012

Revenue

$

2,228,763

$

2,038,289

$

4,268,336

$

3,992,903

Cost of goods and services

1,372,811

1,261,187

2,635,762

2,469,721

Gross profit

855,952

777,102

1,632,574

1,523,182

Selling and administrative expenses

505,628

466,089

990,049

920,078

Operating earnings

350,324

311,013

642,525

603,104

Interest expense, net

30,280

29,715

60,524

59,746

Other expense (income), net

2,543

364

(2,176)

2,149

Earnings before provision for income taxes

and discontinued operations

317,501

280,934

584,177

541,209

Provision for income taxes

23,149

75,778

92,836

149,644

Earnings from continuing operations

294,352

205,156

491,341

391,565

Earnings from discontinued operations, net

35,697

8,945

48,711

18,599

Net earnings

$

330,049

$

214,101

$

540,052

$

410,164

Comprehensive earnings

$

332,989

$

120,514

$

511,713

$

357,819

Basic earnings per common share:

Earnings from continuing operations

$

1.72

$

1.12

$

2.85

$

2.13

Earnings from discontinued operations, net

0.21

0.05

0.28

0.10

Net earnings

1.93

1.17

3.13

2.23

Weighted average shares outstanding

171,111

183,494

172,273

183,625

Diluted earnings per common share:

Earnings from continuing operations

$

1.70

$

1.10

$

2.82

$

2.10

Earnings from discontinued operations, net

0.21

0.05

0.28

0.10

Net earnings

1.91

1.15

3.10

2.20

Weighted average shares outstanding

173,097

185,780

174,325

186,171

Dividends paid per common share

$

0.35

$

0.315

$

0.70

$

0.63

 

 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)

 

2013

2012

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2012

REVENUE

Communication Technologies

$

372,790

$

401,477

$

774,267

$

357,575

$

361,689

$

719,264

$

396,470

$

400,851

$

1,516,585

Energy

561,198

573,471

1,134,669

531,570

538,786

1,070,356

562,263

539,985

2,172,604

Engineered Systems

Fluid Solutions

203,991

226,882

430,873

180,364

211,974

392,338

218,324

206,500

817,162

Refrigeration & Industrial

664,294

777,396

1,441,690

642,213

674,501

1,316,714

674,116

613,012

2,603,842

Eliminations

(352)

(383)

(735)

(453)

(352)

(805)

(319)

(336)

(1,460)

867,933

1,003,895

1,871,828

822,124

886,123

1,708,247

892,121

819,176

3,419,544

Printing & Identification

237,877

250,646

488,523

243,570

251,875

495,445

246,945

254,141

996,531

Intra-segment eliminations

(225)

(726)

(951)

(225)

(184)

(409)

(194)

(322)

(925)

Total consolidated revenue

$

2,039,573

$

2,228,763

$

4,268,336

$

1,954,614

$

2,038,289

$

3,992,903

$

2,097,605

$

2,013,831

$

8,104,339

NET EARNINGS

Segment Earnings:

Communication Technologies

$

44,208

$

51,789

$

95,997

$

46,556

$

50,322

$

96,878

$

63,706

$

58,376

$

218,960

Energy

139,545

132,926

272,471

132,115

133,936

266,051

139,038

133,561

538,650

Engineered Systems

117,178

165,440

282,618

122,092

133,808

255,900

144,245

101,807

501,952

Printing & Identification

29,752

35,967

65,719

26,089

28,918

55,007

39,502

40,650

135,159

Total Segments

330,683

386,122

716,805

326,852

346,984

673,836

386,491

334,394

1,394,721

Corporate expense /

other (1)

33,763

38,341

72,104

36,546

36,335

72,881

32,001

31,127

136,009

Net interest expense

30,244

30,280

60,524

30,031

29,715

59,746

30,399

30,996

121,141

Earnings from continuing operations before provision for income taxes

266,676

317,501

584,177

260,275

280,934

541,209

324,091

272,271

1,137,571

Provision for income taxes

69,687

23,149

92,836

73,866

75,778

149,644

90,761

64,047

304,452

Earnings from continuing operations

196,989

294,352

491,341

186,409

205,156

391,565

233,330

208,224

833,119

Earnings (loss) from discontinued operations, net

13,014

35,697

48,711

9,654

8,945

18,599

7,716

(48,364)

(22,049)

Net earnings

$

210,003

$

330,049

$

540,052

$

196,063

$

214,101

$

410,164

$

241,046

159,860

$

811,070

SEGMENT OPERATING MARGIN

Communication Technologies

11.9

%

12.9

%

12.4

%

13.0

%

13.9

%

13.5

%

16.1

%

14.6

%

14.4

%

Energy

24.9

%

23.2

%

24.0

%

24.9

%

24.9

%

24.9

%

24.7

%

24.7

%

24.8

%

Engineered Systems

13.5

%

16.5

%

15.1

%

14.9

%

15.1

%

15.0

%

16.2

%

12.4

%

14.7

%

Printing & Identification

12.5

%

14.3

%

13.5

%

10.7

%

11.5

%

11.1

%

16.0

%

16.0

%

13.6

%

Total Segment

16.2

%

17.3

%

16.8

%

16.7

%

17.0

%

16.9

%

18.4

%

16.6

%

17.2

%

DEPRECIATION AND AMORTIZATION EXPENSE

Communication Technologies

$

35,501

$

37,719

$

73,220

$

31,513

$

32,828

$

64,341

$

32,997

$

35,281

$

132,619

Energy

26,298

26,599

52,897

21,184

23,533

44,717

24,639

25,721

95,077

Engineered Systems

31,551

32,282

63,833

19,582

23,913

43,495

23,060

27,066

93,621

Printing & Identification

7,630

7,606

15,236

8,331

8,496

16,827

8,777

7,998

33,602

Corporate

859

1,026

1,885

700

765

1,465

842

359

2,666

$

101,839

$

105,232

$

207,071

$

81,310

$

89,535

$

170,845

$

90,315

$

96,425

$

357,585

 

(1) Includes $3.3 million of incurred Knowles spin off costs in Q2 2013.

 

 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(continued)

(unaudited)(in thousands)

 

2013

2012

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2012

BOOKINGS

Communication Technologies

$

379,122

$

422,293

$

801,415

$

347,291

$

387,058

$

734,349

$

411,005

$

363,624

$

1,508,978

Energy

620,640

525,612

1,146,252

585,775

530,352

1,116,127

526,824

550,091

2,193,042

Engineered Systems

Fluid Solutions

223,764

213,359

437,123

184,711

204,139

388,850

197,767

209,872

796,489

Refrigeration & Industrial

755,026

784,904

1,539,930

711,911

666,223

1,378,134

600,065

606,931

2,585,130

Eliminations

(373)

(432)

(805)

(408)

(376)

(784)

(258)

(399)

(1,441)

978,417

997,831

1,976,248

896,214

869,986

1,766,200

797,574

816,404

3,380,178

Printing & Identification

237,217

259,282

496,499

249,773

251,733

501,506

244,611

252,937

999,054

Intra-segment eliminations

(720)

(137)

(857)

(609)

(221)

(830)

(759)

(1,020)

(2,609)

Total consolidated bookings

$

2,214,676

$

2,204,881

$

4,419,557

$

2,078,444

$

2,038,908

$

4,117,352

$

1,979,255

$

1,982,036

$

8,078,643

BACKLOG

Communication Technologies

$

458,765

$

480,426

$

451,110

$

476,745

$

491,041

$

453,172

Energy

311,793

255,544

296,360

282,364

248,233

256,093

Engineered Systems

Fluid Solutions

178,854

184,142

191,327

172,300

156,191

160,890

Refrigeration & Industrial

592,922

597,838

598,910

586,824

515,285

516,559

Eliminations

(178)

(227)

(132)

(155)

(94)

(157)

771,598

781,753

790,105

758,969

671,382

677,292

Printing & Identification

95,353

103,864

102,117

98,216

98,356

97,857

Intra-segment eliminations

(886)

(578)

(986)

(648)

(324)

(591)

Total consolidated backlog

$

1,636,623

$

1,621,009

$

1,638,706

$

1,615,646

$

1,508,688

$

1,483,823

 

 

 

 

DOVER CORPORATION

QUARTERLY EARNINGS PER SHARE

(unaudited)(in thousands, except per share data*)

 

2013

2012

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2012

Basic earnings (loss) per common share:

Continuing operations

$

1.14

$

1.72

$

2.85

$

1.01

$

1.12

$

2.13

$

1.28

$

1.17

$

4.59

Discontinued operations

0.08

0.21

0.28

0.05

0.05

0.10

0.04

(0.27)

(0.12)

Net earnings

1.21

1.93

3.13

1.07

1.17

2.23

1.33

0.90

4.47

Diluted earnings (loss) per common share:

Continuing operations

$

1.12

$

1.70

$

2.82

$

1.00

$

1.10

$

2.10

$

1.27

$

1.16

$

4.53

Discontinued operations

0.07

0.21

0.28

0.05

0.05

0.10

0.04

(0.27)

(0.12)

Net earnings

1.20

1.91

3.10

1.05

1.15

2.20

1.31

0.89

4.41

Adjusted diluted earnings per common share (calculated below):

Continuing operations

$

1.10

$

1.36

$

2.46

$

1.01

$

1.10

$

2.11

$

1.25

$

1.09

$

4.44

Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:

Net earnings (loss):

Continuing operations

$

196,989

$

294,352

$

491,341

$

186,409

$

205,156

$

391,565

$

233,330

$

208,224

$

833,119

Discontinued operations

13,014

35,697

48,711

9,654

8,945

18,599

7,716

(48,364)

(22,049)

Net earnings

210,003

330,049

540,052

196,063

214,101

410,164

241,046

159,860

811,070

Average shares outstanding:

Basic

173,448

171,111

172,273

183,737

183,494

183,625

181,763

177,257

181,551

Diluted

175,567

173,097

174,325

186,706

185,780

186,171

183,932

179,365

183,993

 

Note:

Earnings from continuing operations are adjusted by discrete tax items and incurred Knowles spin off costs to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:

2013

2012

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2012

Adjusted earnings from continuing operations:

Earnings from continuing

operations

$

196,989

$

294,352

$

491,341

$

186,409

$

205,156

$

391,565

$

233,330

$

208,224

$

833,119

Gains (losses) from discrete and other tax items

4,525

61,477

66,002

(1,610)

(372)

(1,982)

4,513

13,606

16,137

Knowles spin off costs

?

(3,322)

(3,322)

?

?

?

?

?

?

Adjusted earnings from continuing operations

$

192,464

$

236,197

$

428,661

$

188,019

$

205,528

$

393,547

$

228,817

$

194,618

$

816,982

Adjusted diluted earnings per common share:

Earnings from continuing operations

$

1.12

$

1.70

$

2.82

$

1.00

$

1.10

$

2.10

$

1.27

$

1.16

$

4.53

Gains (losses) from discrete and other tax items

0.02

0.36

0.38

(0.01)

?

(0.01)

0.02

0.07

0.09

Knowles spin off costs

?

(0.02)

(0.02)

?

?

?

?

?

?

Adjusted earnings from continuing operations

$

1.10

$

1.36

$

2.46

$

1.01

$

1.10

$

2.11

$

1.25

$

1.09

$

4.44

* Per share data may not add due to rounding.

 

 

 

DOVER CORPORATION

QUARTERLY FREE CASH FLOW

(unaudited)(in thousands)

 

2013

2012

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2012

Cash flow from operating

activities

$

78,326

$

304,729

$

383,055

$

161,327

$

243,363

$

404,690

$

285,811

$

570,659

$

1,261,160

Less: Additions to property,

plant and equipment

(47,153)

(53,284)

(100,437)

(68,249)

(72,758)

(141,007)

(67,842)

(88,163)

(297,012)

Free cash flow

$

31,173

$

251,445

$

282,618

$

93,078

$

170,605

$

263,683

$

217,969

$

482,496

$

964,148

Free cash flow as a percentage of earnings from continuing operations

15.8

%

85.4

%

57.5

%

49.9

%

83.2

%

67.3

%

93.4

%

231.7

%

115.7

%

Free cash flow as a percentage of revenue

1.5

%

11.3

%

6.6

%

4.8

%

8.4

%

6.6

%

10.4

%

24.0

%

11.9

%

 

 

 

SOURCE Dover Corporation

For further information: Paul Goldberg, Vice President - Investor Relations, (212) 922-1640

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