Dover Corporation Reports Second Quarter 2012 Results

News provided by

Dover Corporation

Jul 18, 2012, 07:00 ET

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