Dover Reports Second Quarter 2015 Results

- Reports quarterly revenue of $1.8 billion, a decrease of 10% from the prior year

- Achieves quarterly diluted earnings per share from continuing operations of $0.97

- Expects full year diluted earnings per share from continuing operations to be in the range of $3.75 to $3.90

Jul 21, 2015, 07:00 ET from Dover Corporation

DOWNERS GROVE, Ill., July 21, 2015 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the second quarter ended June 30, 2015, revenue was $1.8 billion, a decrease of 10% from the prior year. The decrease in revenue was driven by an organic revenue decline of 10% and a 4% unfavorable impact from foreign exchange, partially offset by 4% growth from acquisitions. Earnings from continuing operations were $155.6 million, a decrease of 26% as compared to $210.6 million for the prior year period. Diluted earnings per share from continuing operations ("EPS") for the second quarter ended June 30, 2015 were $0.97, compared to $1.25 EPS in the prior year period, representing a decrease of 22%. EPS for the second quarter ended June 30, 2015 includes restructuring costs of $0.01.

Revenue for the six months ended June 30, 2015 was $3.5 billion, a decrease of 8% over the prior year, reflecting an organic revenue decline of 8% and a 4% unfavorable impact from foreign exchange, partially offset by 4% growth from acquisitions. Earnings from continuing operations for the six months ended June 30, 2015 were $272.8 million, a decrease of 28% as compared to $380.6 million for the prior year period. Diluted EPS for the six months ended June 30, 2015 was $1.69, compared to $2.23 EPS in the prior year period, representing a decrease of 24%. Excluding discrete tax benefits recognized in the prior year period, EPS from continuing operations for the six months ended June 30, 2015 decreased 24% from an adjusted EPS of $2.22 in the prior year period. EPS for the six months ended June 30, 2015 includes restructuring costs of $0.12

Commenting on the second quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "In the quarter, we continued to be impacted by diminished demand and customer inventory reductions in our North American Energy markets.  We were also affected by reduced customer capital spending in retail refrigeration, oil & gas related pump markets and our industrial businesses within Engineered Systems. These factors offset the benefits of our broad-based cost containment initiatives and restructuring actions, causing our overall results to be below our prior expectations.

"We will continue to manage through these headwinds, especially energy-related, as well as the ongoing impact of a stronger U.S. dollar, with an eye towards future growth and enhanced profitability.  I remain confident that the strength of our market positions, combined with the actions we are taking, will enable Dover to deliver an improved second half of 2015.

"Looking forward, our forecast remains unchanged from our recently updated 2015 guidance.  We expect full-year revenue to decline 8% to 9%.  Within this revenue forecast, organic growth is anticipated to decline 7% to 8%, completed acquisitions will provide approximately 3% growth, and FX is expected to be a 4% headwind.  In total, full year adjusted EPS is expected to be in the range of $3.75 to $3.90, inclusive of $0.16 to $0.19 of restructuring charges."

Net earnings for the second quarter ended June 30, 2015, were $332.4 million, or $2.07 EPS, which included earnings from discontinued operations of $176.8 million, or $1.10 EPS, compared to net earnings of $214.0 million, or $1.27 EPS, for the same period of 2014, which included earnings from discontinued operations of $3.4 million, or $0.02 EPS. Second quarter 2015 earnings from discontinued operations included a gain of $177.8 million, or $1.11 EPS, resulting from the disposition of a business held for sale.

Net earnings for the six months ended June 30, 2015, were $541.9 million, or $3.35 EPS, which included earnings from discontinued operations of $269.1 million, or $1.66 EPS, compared to net earnings of $374.1 million, or $2.19 EPS, for the same period of 2014, which included a loss from discontinued operations of $6.5 million, or $0.04 EPS. 2015 earnings from discontinued operations included gains of $265.6 million, or $1.64 EPS, resulting from the disposition of two businesses held for sale.

Dover will host a webcast of its second quarter 2015 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, July 21, 2015. 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 in excess of $7 billion. We deliver innovative equipment and components, specialty systems and support services through four major operating segments: Energy, Engineered Systems, Fluids, and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve.  Recognized for our entrepreneurial approach for 60 years, our team of 26,000 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."  Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at www.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. Such statements relate to, among other things, operating and strategic plans, income, earnings, cash flows, changes in operations, industries in which Dover businesses operate, anticipated market conditions and our positioning, global economies, and operating improvements. Forward-looking statements may be indicated by words or phrases such as "anticipates," "expects," "believes," "suggests," "will," "plans," "should," "would," "could," and "forecast", 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, oil and natural gas demand, production growth, and prices; changes in exploration and production spending by Dover's customers and changes in the level of oil and natural gas exploration and development; changes in customer demand and capital spending; economic conditions generally and changes in economic conditions globally and in markets served by Dover businesses, including well activity and U.S. industrials activity; Dover's ability to achieve expected savings from integration and other cost-control initiatives, such as lean and productivity programs as well as efforts to reduce sourcing input costs; the impact of interest rate and currency exchange rate fluctuations; the ability of Dover's businesses to expand into new geographic markets; Dover's ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures; the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of Dover's businesses to develop and launch new products, timing of such launches and risks relating to market acceptance by customers; the relative mix of products and services which impacts margins and operating efficiencies; increased competition and pricing pressures; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes or developments, including environmental regulations, conflict minerals disclosure requirements, and tax policies; protection and validity of patent and other intellectual property rights; the impact of legal matters and legal compliance risks; conditions and events affecting domestic and global financial and capital markets; and a downgrade in Dover's credit ratings which, among other matters, could make obtaining financing more difficult and costly. 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 herein. Dover undertakes no obligation to update any forward-looking statement, except as required by law.

 

INVESTOR SUPPLEMENT - SECOND QUARTER 2015

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

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

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Revenue

$

1,758,628

$

1,962,636

$

3,474,129

$

3,765,206

Cost of goods and services

1,104,060

1,194,537

2,192,402

2,289,247

Gross profit

654,568

768,099

1,281,727

1,475,959

Selling and administrative expenses

402,695

438,824

837,329

872,228

Operating earnings

251,873

329,275

444,398

603,731

Interest expense, net

31,988

31,961

64,025

64,616

Other income, net

(1,256)

(6,233)

(5,443)

(6,042)

Earnings before provision for income taxes and discontinued operations

221,141

303,547

385,816

545,157

Provision for income taxes

65,507

92,966

112,992

164,535

Earnings from continuing operations

155,634

210,581

272,824

380,622

Earnings (loss) from discontinued operations, net

176,762

3,378

269,082

(6,525)

Net earnings

$

332,396

$

213,959

$

541,906

$

374,097

Basic earnings per common share:

Earnings from continuing operations

$

0.98

$

1.26

$

1.70

$

2.26

Earnings (loss) from discontinued operations, net

1.11

0.02

1.68

(0.04)

Net earnings

2.10

1.29

3.38

2.23

Weighted average shares outstanding

158,640

166,474

160,137

168,103

Diluted earnings per common share:

Earnings from continuing operations

$

0.97

$

1.25

$

1.69

$

2.23

Earnings (loss) from discontinued operations, net

1.10

0.02

1.66

(0.04)

Net earnings

2.07

1.27

3.35

2.19

Weighted average shares outstanding

160,398

168,857

161,876

170,450

Dividends paid per common share

$

0.40

$

0.375

$

0.80

$

0.75

 

 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)

2015

2014

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2014

REVENUE

Energy

$

430,423

$

366,044

$

796,467

$

478,773

$

481,016

$

959,789

$

507,334

$

550,116

$

2,017,239

Engineered Systems

Printing & Identification

230,181

229,934

460,115

231,679

252,354

484,033

257,282

247,569

988,884

Industrials

343,015

363,157

706,172

335,995

361,467

697,462

355,019

344,600

1,397,081

573,196

593,091

1,166,287

567,674

613,821

1,181,495

612,301

592,169

2,385,965

Fluids

340,236

351,511

691,747

345,009

346,275

691,284

361,797

377,485

1,430,566

Refrigeration & Food Equipment

372,097

448,115

820,212

411,493

522,357

933,850

528,807

458,532

1,921,189

Intra-segment eliminations

(451)

(133)

(584)

(379)

(833)

(1,212)

(664)

(355)

(2,231)

Total consolidated revenue

$

1,715,501

$

1,758,628

$

3,474,129

$

1,802,570

$

1,962,636

$

3,765,206

$

2,009,575

$

1,977,947

$

7,752,728

NET EARNINGS

Segment Earnings:

Energy

$

52,305

$

40,909

$

93,214

$

118,968

$

114,991

$

233,959

$

122,738

$

105,118

$

461,815

Engineered Systems

88,149

96,702

184,851

83,227

101,766

184,993

108,800

93,205

386,998

Fluids

54,634

70,168

124,802

57,942

63,112

121,054

67,559

63,026

251,639

Refrigeration & Food Equipment

36,150

65,732

101,882

44,862

84,926

129,788

78,012

30,934

238,734

Total Segments

231,238

273,511

504,749

304,999

364,795

669,794

377,109

292,283

1,339,186

Corporate expense / other

34,526

20,382

54,908

30,734

29,287

60,021

27,815

29,964

117,800

Net interest expense

32,037

31,988

64,025

32,655

31,961

64,616

31,231

31,332

127,179

Earnings from continuing operations before provision for income taxes

164,675

221,141

385,816

241,610

303,547

545,157

318,063

230,987

1,094,207

Provision for income taxes

47,485

65,507

112,992

71,569

92,966

164,535

92,380

59,152

316,067

Earnings from continuing operations

117,190

155,634

272,824

170,041

210,581

380,622

225,683

171,835

778,140

Earnings (loss) from discontinued operations, net

92,320

176,762

269,082

(9,903)

3,378

(6,525)

6,161

(2,541)

(2,905)

Net earnings

$

209,510

$

332,396

$

541,906

$

160,138

$

213,959

$

374,097

$

231,844

$

169,294

$

775,235

SEGMENT OPERATING MARGIN

Energy

12.2

%

11.2

%

11.7

%

24.8

%

23.9

%

24.4

%

24.2

%

19.1

%

22.9

%

Engineered Systems

15.4

%

16.3

%

15.8

%

14.7

%

16.6

%

15.7

%

17.8

%

15.7

%

16.2

%

Fluids

16.1

%

20.0

%

18.0

%

16.8

%

18.2

%

17.5

%

18.7

%

16.7

%

17.6

%

Refrigeration & Food Equipment

9.7

%

14.7

%

12.4

%

10.9

%

16.3

%

13.9

%

14.8

%

6.7

%

12.4

%

Total Segment

13.5

%

15.6

%

14.5

%

16.9

%

18.6

%

17.8

%

18.8

%

14.8

%

17.3

%

DEPRECIATION AND AMORTIZATION EXPENSE

Energy

$

34,427

$

32,740

$

67,167

$

25,575

$

25,807

$

51,382

$

27,145

$

33,429

$

111,956

Engineered Systems

14,526

14,392

28,918

15,850

15,982

31,832

15,334

14,780

61,946

Fluids

13,848

13,648

27,496

16,366

15,308

31,674

14,019

15,210

60,903

Refrigeration & Food Equipment

16,458

16,406

32,864

17,212

17,451

34,663

17,073

16,965

68,701

Corporate

923

841

1,764

870

1,000

1,870

910

902

3,682

$

80,182

$

78,027

$

158,209

$

75,873

$

75,548

$

151,421

$

74,481

$

81,286

$

307,188

 

 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(continued)

(unaudited)(in thousands)

2015

2014

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2014

BOOKINGS

Energy

$

416,628

$

345,079

$

761,707

$

478,469

$

477,162

$

955,631

$

526,134

$

534,646

$

2,016,411

Engineered Systems

Printing & Identification

235,636

224,209

459,845

250,434

245,445

495,879

249,299

248,082

993,260

Industrials

337,070

336,173

673,243

370,949

363,773

734,722

342,687

374,438

1,451,847

Eliminations

(19)

(6)

(25)

(18)

(16)

(34)

(11)

(11)

(56)

572,687

560,376

1,133,063

621,365

609,202

1,230,567

591,975

622,509

2,445,051

Fluids

339,310

333,695

673,005

362,943

375,009

737,952

350,853

345,553

1,434,358

Refrigeration & Food Equipment

419,659

486,793

906,452

493,731

542,810

1,036,541

459,099

367,567

1,863,207

Intra-segment eliminations

(628)

(417)

(1,045)

(506)

(1,089)

(1,595)

(737)

(644)

(2,976)

Total consolidated bookings

$

1,747,656

$

1,725,526

$

3,473,182

$

1,956,002

$

2,003,094

$

3,959,096

$

1,927,324

$

1,869,631

$

7,756,051

BACKLOG

Energy

$

212,060

$

194,819

$

210,846

$

206,415

$

232,739

$

233,347

Engineered Systems

Printing & Identification

108,151

103,403

131,298

128,912

115,352

110,359

Industrials

276,598

248,592

266,517

268,680

254,612

282,598

384,749

351,995

397,815

397,592

369,964

392,957

Fluids

259,504

240,389

328,617

348,508

323,424

277,834

Refrigeration & Food Equipment

337,084

373,193

431,298

450,065

376,141

282,507

Intra-segment eliminations

(595)

(354)

(374)

(211)

(302)

(431)

Total consolidated backlog

$

1,192,802

$

1,160,042

$

1,368,202

$

1,402,369

$

1,301,966

$

1,186,214

 

 

DOVER CORPORATION

QUARTERLY EARNINGS PER SHARE

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

2015

2014

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2014

Basic earnings (loss) per common share:

Continuing operations

$

0.72

$

0.98

$

1.70

$

1.00

$

1.26

$

2.26

$

1.36

$

1.04

$

4.67

Discontinued operations

0.57

1.11

1.68

(0.06)

0.02

(0.04)

0.04

(0.02)

(0.02)

Net earnings

1.30

2.10

3.38

0.94

1.29

2.23

1.40

1.03

4.65

Diluted earnings (loss) per common share:

Continuing operations

$

0.72

$

0.97

$

1.69

$

0.99

$

1.25

$

2.23

$

1.34

$

1.03

$

4.61

Discontinued operations

0.57

1.10

1.66

(0.06)

0.02

(0.04)

0.04

(0.02)

(0.02)

Net earnings

1.28

2.07

3.35

0.93

1.27

2.19

1.38

1.02

4.59

Adjusted diluted earnings per common share (calculated below):

Continuing operations

$

0.72

$

0.97

$

1.69

$

0.97

$

1.25

$

2.22

$

1.31

$

1.01

$

4.54

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

Net earnings (loss):

Continuing operations

$

117,190

$

155,634

$

272,824

$

170,041

$

210,581

$

380,622

$

225,683

$

171,835

$

778,140

Discontinued operations

92,320

176,762

269,082

(9,903)

3,378

(6,525)

6,161

(2,541)

(2,905)

Net earnings

209,510

332,396

541,906

160,138

213,959

374,097

231,844

169,294

775,235

Average shares outstanding:

Basic

161,650

158,640

160,137

169,750

166,474

168,103

166,021

164,589

166,692

Diluted

163,323

160,398

161,876

172,013

168,857

170,450

168,343

166,467

168,842

Note:

Earnings from continuing operations are adjusted by discrete tax items and other one-time gains to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:

2015

2014

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2014

Adjusted earnings from continuing operations:

Earnings from continuing operations

$

117,190

$

155,634

$

272,824

$

170,041

$

210,581

$

380,622

$

225,683

$

171,835

$

778,140

Gains (losses) from discrete and other tax items

2,541

(635)

1,906

5,524

3,860

11,290

Adjusted earnings from continuing operations

$

117,190

$

155,634

$

272,824

$

167,500

$

211,216

$

378,716

$

220,159

$

167,975

$

766,850

Adjusted diluted earnings per common share:

Earnings from continuing operations

$

0.72

$

0.97

$

1.69

$

0.99

$

1.25

$

2.23

$

1.34

$

1.03

$

4.61

Gains (losses) from discrete and other tax items

0.01

0.01

0.03

0.02

0.07

Adjusted earnings from continuing operations

$

0.72

$

0.97

$

1.69

$

0.97

$

1.25

$

2.22

$

1.31

$

1.01

$

4.54

* Per share data may not add due to rounding.

 

 

DOVER CORPORATION

QUARTERLY FREE CASH FLOW

(unaudited)(in thousands)

2015

2014

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2014

Cash flow from operating activities

$

131,332

$

218,911

$

350,243

$

28,361

$

185,013

$

213,374

$

292,012

$

444,778

$

950,164

Less: Additions to property, plant and equipment

(27,956)

(43,807)

(71,763)

(32,695)

(42,550)

(75,245)

(33,532)

(57,256)

(166,033)

Free cash flow

$

103,376

$

175,104

$

278,480

$

(4,334)

$

142,463

$

138,129

$

258,480

$

387,522

$

784,131

Free cash flow as a percentage of earnings from continuing operations

88.2

%

112.5

%

102.1

%

(2.5)

%

67.7

%

36.3

%

114.5

%

225.5

%

100.8

%

Free cash flow as a percentage of revenue

6.0

%

10.0

%

8.0

%

(0.2)

%

7.3

%

3.7

%

12.9

%

19.6

%

10.1

%

 

SOURCE Dover Corporation



RELATED LINKS

http://www.dovercorporation.com