Dover Corporation Reports Second Quarter 2012 Results

DOWNERS 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 2012


DOVER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

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



Three Months Ended June 30,


Six Months Ended June 30,


2012


2011


2012


2011

Revenue

$

2,156,508



$

1,994,970



$

4,219,872



$

3,807,048


Cost of goods and services

1,338,911



1,218,974



2,621,951



2,319,301


Gross profit

817,597



775,996



1,597,921



1,487,747


Selling and administrative expenses

494,050



448,399



974,930



901,826


Operating earnings

323,547



327,597



622,991



585,921


Interest expense, net

29,717



28,157



59,744



56,475


Other expense, net

142



1,477



2,764



2,665


Earnings before provision for income taxes and discontinued operations

293,688



297,963



560,483



526,781


Provision for income taxes

80,786



58,765



150,754



112,792


Earnings from continuing operations

212,902



239,198



409,729



413,989


Earnings from discontinued operations, net

1,199



10,571



435



30,685


Net earnings

$

214,101



$

249,769



$

410,164



$

444,674










Comprehensive earnings

$

120,514



$

269,404



$

357,819



$

535,970










Basic earnings per common share:








Earnings from continuing operations

$

1.16



$

1.28



$

2.23



$

2.22


Earnings from discontinued operations, net

0.01



0.06





0.16


Net earnings

1.17



1.34



2.23



2.38










Weighted average shares outstanding

183,494



186,443



183,625



186,522










Diluted earnings per common share:








Earnings from continuing operations

$

1.15



$

1.26



$

2.20



$

2.18


Earnings from discontinued operations, net

0.01



0.06





0.16


Net earnings

1.15



1.32



2.20



2.34










Weighted average shares outstanding

185,780



189,705



186,171



189,905










Dividends paid per common share

$

0.315



$

0.275



$

0.63



$

0.55



 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)






2012


2011


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2011

REVENUE











Communication Technologies

$

357,575


$

361,689


$

719,264



$

269,582


$

288,843


$

558,425


$

405,357


$

396,295


$

1,360,077













Energy

531,570


538,786


1,070,356



425,424


454,327


879,751


510,608


510,390


1,900,749













Engineered Systems











Fluid Solutions

180,364


211,974


392,338



163,196


178,031


341,227


173,804


162,590


677,621


Refrigeration & Industrial

642,213


674,501


1,316,714



560,453


645,573


1,206,026


649,768


568,844


2,424,638


Eliminations

(453)


(352)


(805)



(382)


(424)


(806)


(431)


(287)


(1,524)



822,124


886,123


1,708,247



723,267


823,180


1,546,447


823,141


731,147


3,100,735













Printing & Identification

352,332


370,173


722,505



394,627


429,497


824,124


400,515


368,325


1,592,964













Intra-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


$

7,950,140













NET EARNINGS











Segment Earnings:











Communication Technologies

$

46,556


$

50,322


$

96,878



$

47,325


$

54,527


$

101,852


$

53,433


$

71,097


$

226,382


Energy

132,115


133,936


266,051



93,051


110,447


203,498


125,268


121,871


450,637


Engineered Systems

122,092


133,808


255,900



98,235


128,570


226,805


125,529


92,852


445,186


Printing & Identification

32,605


41,674


74,279



54,637


67,967


122,604


59,447


44,483


226,534


Total Segments

333,368


359,740


693,108



293,248


361,511


654,759


363,677


330,303


1,348,739


Corporate expense / other

36,546


36,335


72,881



36,112


35,391


71,503


34,083


32,393


137,979


Net interest expense

30,027


29,717


59,744



28,318


28,157


56,475


30,061


29,060


115,596


Earnings from continuing operations before provision for income taxes

266,795


293,688


560,483



228,818


297,963


526,781


299,533


268,850


1,095,164


Provision for income taxes

69,968


80,786


150,754



54,027


58,765


112,792


76,095


59,912


248,799


Earnings from continuing operations

196,827


212,902


409,729



174,791


239,198


413,989


223,438


208,938


846,365


Earnings (loss) from discontinued operations, net

(764)


1,199


435



20,114


10,571


30,685


(51,158)


69,351


48,878


Net earnings

$

196,063


$

214,101


$

410,164



$

194,905


$

249,769


444,674


$

172,280


278,289


$

895,243













SEGMENT OPERATING MARGIN









Communication Technologies

13.0

%

13.9

%

13.5

%


17.6

%

18.9

%

18.2

%

13.2

%

17.9

%

16.6

%

Energy

24.9

%

24.9

%

24.9

%


21.9

%

24.3

%

23.1

%

24.5

%

23.9

%

23.7

%

Engineered Systems

14.9

%

15.1

%

15.0

%


13.6

%

15.6

%

14.7

%

15.2

%

12.7

%

14.4

%

Printing & Identification

9.3

%

11.3

%

10.3

%


13.8

%

15.8

%

14.9

%

14.8

%

12.1

%

14.2

%

Total Segment

16.2

%

16.7

%

16.4

%


16.2

%

18.1

%

17.2

%

17.0

%

16.5

%

17.0

%












DEPRECIATION AND AMORTIZATION EXPENSE









Communication Technologies

$

31,513


$

32,828


$

64,341



$

18,685


$

18,533


$

37,218


$

34,360


$

30,261


$

101,839


Energy

21,184


23,533


44,717



18,573


18,765


37,338


19,399


21,082


77,819


Engineered Systems

19,582


23,913


43,495



18,415


18,816


37,231


18,332


19,213


74,776


Printing & Identification

11,206


11,448


22,654



11,372


11,685


23,057


11,548


11,543


46,148


Corporate

700


765


1,465



586


626


1,212


636


713


2,561



$

84,185


$

92,487


$

176,672



$

67,631


$

68,425


$

136,056


$

84,275


$

82,812


$

303,143


 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(continued)

(unaudited)(in thousands)






2012


2011


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2011

BOOKINGS











Communication Technologies

$

356,386


$

383,135


$

739,521



$

274,611


$

309,734


$

584,345


$

410,616


$

349,579


$

1,344,540













Energy

585,775


530,352


1,116,127



495,125


472,543


967,668


498,212


519,525


1,985,405













Engineered Systems











Fluid Solutions

184,711


204,139


388,850



173,626


175,539


349,165


174,772


158,895


682,832


Refrigeration & Industrial

711,911


666,223


1,378,134



660,449


623,929


1,284,378


602,488


625,840


2,512,706


Eliminations

(408)


(376)


(784)



(733)


(884)


(1,617)


179


(1,378)


(2,816)



896,214


869,986


1,766,200



833,342


798,584


1,631,926


777,439


783,357


3,192,722













Printing & Identification

347,368


357,648


705,016



438,526


386,259


824,785


384,085


353,849


1,562,719













Intra-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


$

8,073,675













BACKLOG











Communication Technologies

$

435,912


$

457,624




$

410,843


$

431,558



$

483,512


$

437,320














Energy

296,360


282,364




240,198


255,889



243,401


246,351














Engineered Systems











Fluid Solutions

191,327


172,300




57,357


54,945



55,230


54,194



Refrigeration & Industrial

598,910


586,824




544,995


523,011



469,876


528,118



Eliminations

(132)


(155)




(339)


(526)



(94)


(177)




790,105


758,969




602,013


577,430



525,012


582,135














Printing & Identification

177,511


160,311




262,629


220,619



197,792


180,871














Intra-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 CORPORATION

QUARTERLY EARNINGS PER SHARE

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






2012


2011


Q1


Q2


Q2 YTD


Q1


Q2


Q2 YTD


Q3


Q4


FY 2011

Basic earnings (loss) per common share:













Continuing operations

$

1.07



$

1.16



$

2.23



$

0.94



$

1.28



$

2.22



$

1.20



$

1.13



$

4.55


Discontinued operations



0.01





0.11



0.06



0.16



(0.28)



0.38



0.26


Net earnings

1.07



1.17



2.23



1.04



1.34



2.38



0.93



1.51



4.82




















Diluted earnings (loss) per common share:













Continuing operations

$

1.05



$

1.15



$

2.20



$

0.92



$

1.26



$

2.18



$

1.19



$

1.12



$

4.48


Discontinued operations



0.01





0.11



0.06



0.16



(0.27)



0.37



0.26


Net earnings

1.05



1.15



2.20



1.03



1.32



2.34



0.91



1.49



4.74




















Adjusted 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



$

4.26






































Net 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



$

846,365


Discontinued operations

(764)



1,199



435



20,114



10,571



30,685



(51,158)



69,351



48,878


Net earnings

196,063



214,101



410,164



194,905



249,769



444,674



172,280



278,289



895,243




















Average shares outstanding:













Basic

183,737



183,494



183,625



186,659



186,443



186,522



185,770



184,686



185,882


Diluted

186,706



185,780



186,171



190,090



189,705



189,905



188,436



187,208



188,887


NOTE:
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:


2012


2011


Q1


Q2


Q2 YTD


Q1


Q2


Q2 YTD


Q3


Q4


FY 2011

Adjusted earnings from continuing operations:













Earnings from continuing operations

$

196,827



$

212,902



$

409,729



$

174,791



$

239,198



$

413,989



$

223,438



$

208,938



$

846,365


Gains (losses) from discrete and other tax items

1,432



(372)



1,060



8,016



22,338



30,354



2,390



8,590



41,334


Adjusted earnings from continuing operations

$

195,395



$

213,274



$

408,669



$

166,775



$

216,860



$

383,635



$

221,048



$

200,348



$

805,031




















Adjusted 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



$

4.48


Gains (losses) from discrete and other tax items







0.04



0.12



0.16



0.01



0.05



0.22


Adjusted earnings from continuing operations

$

1.05



$

1.15



$

2.20



$

0.88



$

1.14



$

2.02



$

1.18



$

1.07



$

4.26


 

DOVER CORPORATION

QUARTERLY FREE CASH FLOW

(unaudited)(in thousands)






2012


2011


Q1


Q2


Q2 YTD


Q1


Q2


Q2 YTD


Q3


Q4


FY 2011

Cash flow from operating activities

$

160,127



$

252,120



$

412,247



$

117,503



$

205,260



$

322,763



$

376,614



$

358,852



$

1,058,229


Less: 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



$

786,420




















Free cash flow as a percentage of earnings from continuing operations

45.1

%


83.5

%


65.0

%


37.8

%


55.6

%


48.1

%


139.5

%


132.0

%


92.9

%



















Free cash flow as a percentage of revenue

4.3

%


8.2

%


6.3

%


3.6

%


6.7

%


5.2

%


14.6

%


13.8

%


9.9

%

 

SOURCE Dover Corporation



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