Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
 October 20, 2015 - 6:58 AM EDT
Print Email Article Font Down Font Up
Dover Reports Third Quarter 2015 Results, Updates 2015 Guidance, And Announces Two Acquisitions

-- Reports quarterly revenue of $1.8 billion, a decrease of 11% from the prior year -- Delivers quarterly diluted earnings per share from continuing operations of $1.19, including $0.05 of discrete tax benefits -- Updates full year 2015 diluted earnings per share from continuing operations to now be in the range of $3.73 to $3.80, including discrete tax benefits -- Signs definitive agreements to acquire two businesses with combined 2016 revenue of approximately $165 million

DOWNERS GROVE, Ill., Oct. 20, 2015 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the third quarter ended September 30, 2015, revenue was $1.8 billion, a decrease of 11% from the prior year. The decrease in revenue was driven by an organic revenue decline of 10% and an unfavorable impact from foreign exchange of 4%, partially offset by 3% growth from acquisitions. Earnings from continuing operations were $186.5 million, a decrease of 17% as compared to $225.7 million for the prior year period. Diluted earnings per share from continuing operations ("EPS") for the third quarter ended September 30, 2015 were $1.19, compared to $1.34 EPS in the prior year period, representing a decrease of 11%. EPS from continuing operations for the third quarter of 2015 included discrete tax benefits of $0.05, compared to $0.03 EPS in the prior year period. Excluding these items, adjusted EPS from continuing operations for the third quarter of 2015 was $1.14, a decrease of 13% over an adjusted EPS of $1.31 in the prior year period. EPS for the third quarter ended September 30, 2015 and 2014 includes restructuring costs of $0.05 EPS and $0.01 EPS, respectively.

Revenue for the nine months ended September 30, 2015 was $5.3 billion, a decrease of 9% over the prior year, reflecting an organic revenue decline of 9% and an unfavorable impact from foreign exchange of 4%, offset by 4% growth from acquisitions. Earnings from continuing operations for the nine months ended September 30, 2015 were $459.3 million, a decrease of 24% as compared to $606.3 million for the prior year period. Diluted EPS for the nine months ended September 30, 2015 was $2.87, compared to $3.57 EPS in the prior year period, representing a decrease of 20%. EPS from continuing operations for the nine months ended September 30, 2015 included discrete tax benefits of $0.05, compared to $0.04 EPS in the prior year period. Excluding these items, adjusted EPS from continuing operations decreased 20% to $2.82 from an adjusted EPS of $3.53 in the prior year period. EPS for the nine months ended September 30, 2015 and 2014 includes restructuring costs of $0.17 EPS and $0.03 EPS, respectively. 

Commenting on the third quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "Overall, our third quarter performance was in line with our expectations.  Our team aggressively pursued cost actions and productivity initiatives, which helped to mitigate weak global macro conditions.

"We continued to pursue acquisitions that offer industry-leading products and significantly complement and expand our market positions.  In this regard, I am pleased to announce we have signed definitive agreements to acquire two businesses, both of which are expected to close later in the fourth quarter.  These acquisitions are in addition to our previously announced Tokheim deal.

"Specifically, we have agreed to acquire Italy-based JK Group SPA ("JK"), a leading manufacturer of innovative inks and consumables serving the fast-growing digital textile printing markets.  JK's digital inks will complement our MS Solutions equipment business, and will join the Engineered Systems segment under its Printing & Identification platform. We have also agreed to acquire Gala Industries, Inc. ("Gala"), a leading manufacturer of underwater pelletizing systems and solutions serving the plastics compounding industry, headquartered in Eagle Rock, Virginia.  Gala will become part of our Maag business within the Fluids segment, and collectively, will provide our customers unequaled process and engineering expertise."

The combined purchase price of JK and Gala will be approximately $520 million.  JK and Gala are expected to have combined 2016 revenue of about $165 million and be about $0.11 accretive to continuing earnings per share in 2016.  On an operating basis, which excludes purchase accounting amortization, JK and Gala are expected to be approximately $0.23 accretive in 2016.  Combining JK and Gala with the previously announced Tokheim deal, Dover expects 2016 acquisition revenue to be approximately $500 million and 2016 continuing earnings per share accretion to be about $0.18.  On an operating basis, which excludes normal transaction-related costs and purchase accounting amortization, these acquisitions are expected to be approximately $0.38 accretive in 2016. Dover expects to fund the nearly $1 billion in total acquisition spend with cash on hand and debt. Interest charges associated with the incremental debt financing are not included in the above earnings per share estimates.

"Looking to the remainder of 2015," Mr. Livingston continued, "we have lowered our guidance to reflect the impact of generally weaker global market conditions.  We expect full-year revenue to decline 10% to 11%, a two point reduction from our previous forecast.  Within this revenue forecast, organic growth is anticipated to decline 9% to 10%, completed acquisitions will provide approximately 3% growth, and FX is expected to be a 4% headwind.  In total, full year EPS is expected to be in the range of $3.73 to $3.80, as compared to our prior forecast of $3.75 to $3.90. This range includes approximately $0.20 of restructuring charges, representing a $0.02 increase from our last forecast, and now also includes $0.05 of discrete tax benefits."

Net earnings for the third quarter ended September 30, 2015, were $186.1 million, or $1.19 EPS, which included a loss from discontinued operations of $0.4 million, compared to net earnings of $231.8 million, or $1.38 EPS, for the same period of 2014, which included earnings from discontinued operations of $6.2 million, or $0.04 EPS.

Net earnings for the nine months ended September 30, 2015, were $728.0 million, or $4.55 EPS, which included earnings from discontinued operations of $268.7 million, or $1.68 EPS, compared to net earnings of $605.9 million, or $3.57 EPS, for the same period of 2014, which included a loss from discontinued operations of $0.4 million. 2015 earnings from discontinued operations included gains of $265.6 million, or $1.66 EPS, resulting from the disposition of two businesses held for sale.

Dover will host a webcast of its third quarter 2015 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, October 20, 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 third 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 approximately $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." 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, foreign exchange, changes in operations, acquisitions, 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 - THIRD QUARTER 2015


DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

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




Three Months Ended
September 30,


Nine Months Ended
September 30,


2015


2014


2015


2014

Revenue

$

1,787,582



$

2,009,575



$

5,261,711



$

5,774,781


Cost of goods and services

1,114,974



1,235,153



3,307,376



3,524,400


Gross profit

672,608



774,422



1,954,335



2,250,381


Selling and administrative expenses

395,688



426,160



1,233,017



1,298,388


Operating earnings

276,920



348,262



721,318



951,993


Interest expense, net

31,983



31,231



96,008



95,847


Other income, net

(367)



(1,032)



(5,810)



(7,074)


Earnings before provision for income taxes and discontinued operations

245,304



318,063



631,120



863,220


Provision for income taxes

58,821



92,380



171,813



256,915


Earnings from continuing operations

186,483



225,683



459,307



606,305


(Loss) earnings from discontinued operations, net

(385)



6,161



268,697



(364)


Net earnings

$

186,098



$

231,844



$

728,004



$

605,941










Basic earnings per common share:








Earnings from continuing operations

$

1.20



$

1.36



$

2.90



$

3.62


Earnings (loss) from discontinued operations, net



0.04



1.70




Net earnings

1.20



1.40



4.59



3.62










Weighted average shares outstanding

155,300



166,021



158,507



167,401










Diluted earnings per common share:








Earnings from continuing operations

$

1.19



$

1.34



$

2.87



$

3.57


Earnings (loss) from discontinued operations, net



0.04



1.68




Net earnings

1.19



1.38



4.55



3.57










Weighted average shares outstanding

156,560



168,343



160,112



169,761










Dividends paid per common share

$

0.42



$

0.40



$

1.22



$

1.15










 


 


DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)



2015


2014


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Q4

FY 2014

REVENUE












Energy

$

430,423


$

366,044


$

363,872


$

1,160,339



$

478,773


$

481,016


$

507,334


$

1,467,123


$

550,116


$

2,017,239














Engineered Systems












Printing & Identification

230,181


229,934


227,992


688,107



231,679


252,354


257,282


741,315


247,569


988,884


Industrials

343,015


363,157


351,404


1,057,576



335,995


361,467


355,019


1,052,481


344,600


1,397,081



573,196


593,091


579,396


1,745,683



567,674


613,821


612,301


1,793,796


592,169


2,385,965














Fluids

340,236


351,511


352,018


1,043,765



345,009


346,275


361,797


1,053,081


377,485


1,430,566














Refrigeration & Food Equipment

372,097


448,115


492,460


1,312,672



411,493


522,357


528,807


1,462,657


458,532


1,921,189














Intra-segment eliminations

(451)


(133)


(164)


(748)



(379)


(833)


(664)


(1,876)


(355)


(2,231)


Total consolidated revenue

$

1,715,501


$

1,758,628


$

1,787,582


$

5,261,711



$

1,802,570


$

1,962,636


$

2,009,575


$

5,774,781


$

1,977,947


$

7,752,728














NET EARNINGS












Segment Earnings:












Energy

$

52,305


$

40,909


$

48,726


$

141,940



$

118,968


$

114,991


$

122,738


$

356,697


$

105,118


$

461,815


Engineered Systems

88,149


96,702


102,866


287,717



83,227


101,766


108,800


293,793


93,205


386,998


Fluids

54,634


70,168


74,911


199,713



57,942


63,112


67,559


188,613


63,026


251,639


Refrigeration & Food Equipment

36,150


65,732


76,665


178,547



44,862


84,926


78,012


207,800


30,934


238,734


Total Segments

231,238


273,511


303,168


807,917



304,999


364,795


377,109


1,046,903


292,283


1,339,186


Corporate expense / other

34,526


20,382


25,881


80,789



30,734


29,287


27,815


87,836


29,964


117,800


Net interest expense

32,037


31,988


31,983


96,008



32,655


31,961


31,231


95,847


31,332


127,179


Earnings from continuing
operations before
provision for income taxes

164,675


221,141


245,304


631,120



241,610


303,547


318,063


863,220


230,987


1,094,207


Provision for income taxes

47,485


65,507


58,821


171,813



71,569


92,966


92,380


256,915


59,152


316,067


Earnings from continuing operations

117,190


155,634


186,483


459,307



170,041


210,581


225,683


606,305


171,835


778,140


Earnings (loss) from discontinued operations, net

92,320


176,762


(385)


268,697



(9,903)


3,378


6,161


(364)


(2,541)


(2,905)


Net earnings

$

209,510


$

332,396


$

186,098


$

728,004



$

160,138


$

213,959


$

231,844


$

605,941


$

169,294


$

775,235














SEGMENT OPERATING MARGIN










Energy

12.2

%

11.2

%

13.4

%

12.2

%


24.8

%

23.9

%

24.2

%

24.3

%

19.1

%

22.9

%

Engineered Systems

15.4

%

16.3

%

17.8

%

16.5

%


14.7

%

16.6

%

17.8

%

16.4

%

15.7

%

16.2

%

Fluids

16.1

%

20.0

%

21.3

%

19.1

%


16.8

%

18.2

%

18.7

%

17.9

%

16.7

%

17.6

%

Refrigeration & Food Equipment

9.7

%

14.7

%

15.6

%

13.6

%


10.9

%

16.3

%

14.8

%

14.2

%

6.7

%

12.4

%

Total Segment

13.5

%

15.6

%

17.0

%

15.4

%


16.9

%

18.6

%

18.8

%

18.1

%

14.8

%

17.3

%













DEPRECIATION AND AMORTIZATION EXPENSE










Energy

$

34,427


$

32,740


$

31,858


$

99,025



$

25,575


$

25,807


$

27,145


$

78,527


$

33,429


$

111,956


Engineered Systems

14,526


14,392


14,503


43,421



15,850


15,982


15,334


47,166


14,780


61,946


Fluids

13,848


13,648


13,367


40,863



16,366


15,308


14,019


45,693


15,210


60,903


Refrigeration & Food Equipment

16,458


16,406


16,609


49,473



17,212


17,451


17,073


51,736


16,965


68,701


Corporate

923


841


837


2,601



870


1,000


910


2,780


902


3,682



$

80,182


$

78,027


$

77,174


$

235,383



$

75,873


$

75,548


$

74,481


$

225,902


$

81,286


$

307,188














 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(continued)

(unaudited)(in thousands)



2015


2014


Q1

Q2

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Q4

FY 2014

BOOKINGS












Energy

$

416,628


$

345,079


$

351,557


$

1,113,264



$

478,469


$

477,162


$

526,134


$

1,481,765


$

534,646


$

2,016,411














Engineered Systems












Printing & Identification

235,617


224,203


226,756


686,576



250,416


245,429


249,288


745,133


248,071


993,204


Industrials

337,070


336,173


338,744


1,011,987



370,949


363,773


342,687


1,077,409


374,438


1,451,847



572,687


560,376


565,500


1,698,563



621,365


609,202


591,975


1,822,542


622,509


2,445,051














Fluids

339,310


333,695


357,032


1,030,037



362,943


375,009


350,853


1,088,805


345,553


1,434,358














Refrigeration & Food Equipment

419,659


486,793


430,681


1,337,133



493,731


542,810


459,099


1,495,640


367,567


1,863,207














Intra-segment eliminations

(628)


(417)


(385)


(1,430)



(506)


(1,089)


(737)


(2,332)


(644)


(2,976)














Total consolidated bookings

$

1,747,656


$

1,725,526


$

1,704,385


$

5,177,567



$

1,956,002


$

2,003,094


$

1,927,324


$

5,886,420


$

1,869,631


$

7,756,051














BACKLOG












Energy

$

212,060


$

194,819


$

156,631




$

210,846


$

206,415


$

232,739



$

233,347















Engineered Systems












Printing & Identification

108,151


103,403


100,476




131,298


128,912


115,352



110,359



Industrials

276,598


248,592


236,298




266,517


268,680


254,612



282,598




384,749


351,995


336,774




397,815


397,592


369,964



392,957















Fluids

259,504


240,389


236,608




328,617


348,508


323,424



277,834















Refrigeration & Food Equipment

337,084


373,193


307,351




431,298


450,065


376,141



282,507















Intra-segment eliminations

(595)


(354)


(598)




(374)


(211)


(302)



(431)















Total consolidated backlog

$

1,192,802


$

1,160,042


$

1,036,766




$

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

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Q4

FY 2014

Basic earnings (loss) per common share:










Continuing operations

$

0.72


$

0.98


$

1.20


$

2.90



$

1.00


$

1.26


$

1.36


$

3.62


$

1.04


$

4.67


Discontinued operations

0.57


1.11



1.70



$

(0.06)


$

0.02


$

0.04


$


$

(0.02)


$

(0.02)


Net earnings

1.30


2.10


1.20


4.59



$

0.94


$

1.29


$

1.40


$

3.62


$

1.03


$

4.65














Diluted earnings (loss) per common share:










Continuing operations

$

0.72


$

0.97


$

1.19


$

2.87



$

0.99


$

1.25


$

1.34


$

3.57


$

1.03


$

4.61


Discontinued operations

0.57


1.10



1.68



$

(0.06)


$

0.02


$

0.04


$


$

(0.02)


$

(0.02)


Net earnings

1.28


2.07


1.19


4.55



$

0.93


$

1.27


$

1.38


$

3.57


$

1.02


$

4.59














Adjusted diluted earnings per common share (calculated below):

Continuing operations

$

0.72


$

0.97


$

1.14


$

2.82



$

0.97


$

1.25


$

1.31


$

3.53


$

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


$

186,483


$

459,307



$

170,041


$

210,581


$

225,683


$

606,305


$

171,835


$

778,140


Discontinued operations

92,320


176,762


(385)


268,697



(9,903)


3,378


6,161


(364)


(2,541)


(2,905)


Net earnings

209,510


332,396


186,098


728,004



160,138


213,959


231,844


605,941


169,294


775,235














Average shares outstanding:










Basic

161,650


158,640


155,300


158,507



169,750


166,474


166,021


167,401


164,589


166,692


Diluted

163,323


160,398


156,560


160,112



172,013


168,857


168,343


169,761


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

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Q4

FY 2014

Adjusted earnings from continuing operations:









Earnings from continuing operations

$

117,190


$

155,634


$

186,483


$

459,307



$

170,041


$

210,581


$

225,683


$

606,305


$

171,835


$

778,140


Gains (losses) from discrete and other tax items



8,131


8,131



2,541


(635)


5,524


7,430


3,860


11,290


Adjusted earnings from continuing operations

$

117,190


$

155,634


$

178,352


$

451,176



$

167,500


$

211,216


$

220,159


$

598,875


$

167,975


$

766,850














Adjusted diluted earnings per common share:










Earnings from continuing operations

$

0.72


$

0.97


$

1.19


$

2.87



$

0.99


$

1.25


$

1.34


$

3.57


$

1.03


$

4.61


Gains (losses) from discrete and other tax items



0.05


0.05



0.01



0.03


0.04


0.02


0.07


Adjusted earnings from continuing operations

$

0.72


$

0.97


$

1.14


$

2.82



$

0.97


$

1.25


$

1.31


$

3.53


$

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

Q3

Q3 YTD


Q1

Q2

Q3

Q3 YTD

Q4

FY 2014

Cash flow from operating activities

$

131,332


$

218,911


$

282,213


$

632,456



$

28,361


$

185,013


$

292,012


$

505,386


$

444,778


$

950,164


Less: Additions to property,
plant and equipment

(27,956)


(43,807)


(39,516)


(111,279)



(32,695)


(42,550)


(33,532)


(108,777)


(57,256)


(166,033)


Free cash flow

$

103,376


$

175,104


$

242,697


$

521,177



$

(4,334)


$

142,463


$

258,480


$

396,609


$

387,522


$

784,131














Free cash flow as a percentage of earnings from continuing operations

88.2

%

112.5

%

130.1

%

113.5

%


(2.5)%


67.7

%

114.5

%

65.4

%

225.5

%

100.8

%













Free cash flow as a percentage of revenue

6.0

%

10.0

%

13.6

%

9.9

%


(0.2)%


7.3

%

12.9

%

6.9

%

19.6

%

10.1

%

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dover-reports-third-quarter-2015-results-updates-2015-guidance-and-announces-two-acquisitions-300162570.html

SOURCE Dover Corporation


Source: PR Newswire (October 20, 2015 - 6:58 AM EDT)

News by QuoteMedia
www.quotemedia.com