July 21, 2016 - 6:40 AM EDT
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Dover Reports Second Quarter 2016 Results And Updates Full Year Guidance

- Reports quarterly revenue of $1.7 billion, a decrease of 4% from the prior year - Delivers quarterly diluted earnings per share from continuing operations of $0.76, including second quarter restructuring costs of $0.04, deal costs of $0.02, and one-time costs of $0.04 - Expects full year organic revenue to decline 6% to 8%, versus prior forecast of a 5% to 8% decline - Reduces full year 2016 diluted earnings per share from continuing operations to now be in the range of $3.35 to $3.45, including approximately $0.18 of restructuring costs, $0.05 of deal costs, and $0.04 of one-time costs - Believes the second quarter will mark the low point of 2016 Energy segment performance

DOWNERS GROVE, Ill., July 21, 2016 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the second quarter ended June 30, 2016, revenue was $1.7 billion, a decrease of 4% from the prior year. Organic revenue declined 7% and acquisition revenue, net of dispositions, provided 3% growth in the quarter. Earnings from continuing operations were $118.3 million, a decrease of 24% as compared to $155.6 million for the prior year period. Diluted earnings per share from continuing operations ("EPS") for the second quarter ended June 30, 2016, were $0.76, compared to $0.97 EPS in the prior year period, representing a decrease of 22%. EPS from continuing operations for the second quarter of 2016 includes discrete tax costs of approximately $0.01, deal costs of $0.02, and one-time costs of $0.04. EPS for the second quarter ended June 30, 2016, and 2015, also includes restructuring costs of $0.04 EPS and $0.01 EPS, respectively.

Revenue for the six months ended June 30, 2016, was $3.3 billion, a decrease of 5% from the prior year, reflecting an organic revenue decline of 7% and an unfavorable impact from foreign exchange of 1%, offset by 3% growth from acquisition revenue, net of dispositions. Earnings from continuing operations for the six months ended June 30, 2016, were $217.6 million, a decrease of 20% as compared to $272.8 million for the prior year period. Diluted EPS for the six months ended June 30, 2016, was $1.39, compared to $1.69 EPS in the prior year period, representing a decrease of 18%. EPS from continuing operations for the six months ended June 30, 2016, includes discrete tax benefits of $0.04, a gain on disposition of $0.07, deal costs of $0.02, and one-time costs of $0.04. Excluding discrete tax benefits and the gain on disposition, adjusted EPS from continuing operations decreased 24% to $1.28 from a comparable EPS of $1.69 in the prior year period. EPS for the six months ended June 30, 2016, and 2015, also includes restructuring costs of $0.11 EPS and $0.12 EPS, respectively.

Robert A. Livingston, Dover's President and Chief Executive Officer, said, "Our second quarter results, excluding deal costs and certain one-time items, were generally in-line with our expectations, but disappointing nonetheless. These results included deal costs of approximately $5 million, or $0.02 EPS, and one-time items of approximately $7 million, or $0.04 EPS, which included costs resulting from our in-quarter decision to suspend production for two weeks at several facilities in our Energy segment, as well as other costs. In addition, our results included $9 million, or $0.04 EPS, of restructuring costs. 

"While our Energy businesses continued to be challenged by weak market dynamics, we believe the second quarter will mark the low point of our 2016 performance in our Energy segment.  The continued stabilization of North American rig count and constructive oil prices positions us for modestly improved results in the back half of 2016, and growth in 2017.

"The markets served by Engineered Systems and Refrigeration & Food Equipment remained solid, resulting in organic growth of 2% and 1%, respectively.  Our Fluids segment was impacted by direct oil & gas exposure, lower capital spending from integrated energy customers, and project timing, resulting in an organic decline of 8%.

"While there are positive indicators in several areas, we are slightly reducing our full year expectations for Refrigeration & Food Equipment and Fluids to account for project timing and continued headwinds. In Refrigeration & Food Equipment, we anticipate certain large can shaping equipment orders and shipments will slip into 2017.  Within Fluids, we expect continued softness in our oil & gas related markets.

"We now expect full year revenue to decline approximately 3% to 5% as compared to our prior forecast of a revenue decline of 2% to 5%. Within this forecast, organic revenue is expected to decline 6% to 8%, versus an organic decline of 5% to 8% in our prior forecast. Our forecast for acquisitions, net of dispositions, of 4%, and the unfavorable impact of FX of 1%, is unchanged.  In total, full year EPS is expected to be in the range of $3.35 to $3.45, as compared to the prior forecast of $3.51 to $3.66.  The reduction of $0.19, at the mid-point, is comprised of one-time items of $0.04 EPS, second quarter deal costs of $0.02 EPS, forecasted third quarter deal costs of $0.03 EPS, as well as the combined impact of lower revenue, reduced corporate expense, and a lower tax rate.  Also included in this forecast are full year restructuring costs of $0.18, the gain on a disposition of $0.07 and $0.04 of discrete tax benefits."   

Net earnings for the second quarter ended June 30, 2016, were $118.3 million, or $0.76 EPS, compared to net earnings of $332.4 million, or $2.07 EPS, for the same period of 2015, which included earnings from discontinued operations of $176.8 million, or $1.10 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, 2016, were $217.6 million, or $1.39 EPS, compared to net earnings of $541.9 million, or $3.35 EPS, for the same period of 2015, which included earnings from discontinued operations of $269.1 million, or $1.66 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 2016 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, July 21, 2016. 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 revenue of approaching $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 over 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, tax policies, trade sanctions, and export/import laws; 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 2016
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)






Three Months Ended June 30,


Six Months Ended June 30,


2016


2015


2016


2015

Revenue

$

1,686,345



$

1,758,628



$

3,308,618



$

3,474,129


Cost of goods and services

1,055,132



1,104,060



2,088,141



2,192,402


Gross profit

631,213



654,568



1,220,477



1,281,727


Selling and administrative expenses

437,411



402,695



880,859



837,329


Operating earnings

193,802



251,873



339,618



444,398


Interest expense, net

32,157



31,988



63,871



64,025


Other income, net

(2,854)



(1,256)



(16,376)



(5,443)


Earnings before provision for income taxes and
discontinued operations

164,499



221,141



292,123



385,816


Provision for income taxes

46,209



65,507



74,477



112,992


Earnings from continuing operations

118,290



155,634



217,646



272,824


Earnings from discontinued operations, net



176,762





269,082


Net earnings

$

118,290



$

332,396



$

217,646



$

541,906










Basic earnings per common share:








Earnings from continuing operations

$

0.76



$

0.98



$

1.40



$

1.70


Earnings from discontinued operations, net



1.11





1.68


Net earnings

0.76



2.10



1.40



3.38










Weighted average shares outstanding

155,180



158,640



155,122



160,137










Diluted earnings per common share:








Earnings from continuing operations

$

0.76



$

0.97



$

1.39



$

1.69


Earnings from discontinued operations, net



1.10





1.66


Net earnings

0.76



2.07



1.39



3.35










Weighted average shares outstanding

156,595



160,398



156,414



161,876










Dividends paid per common share

$

0.42



$

0.40



$

0.84



$

0.80










 


DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)






2016


2015


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2015

REVENUE











Energy

$

283,230


$

259,008


$

542,238



$

430,423


$

366,044


$

796,467


$

363,872


$

323,341


$

1,483,680













Engineered Systems











Printing & Identification

239,681


263,648


503,329



230,181


229,934


460,115


227,992


255,563


943,670


Industrials

337,314


328,784


666,098



343,015


363,157


706,172


351,404


341,667


1,399,243



576,995


592,432


1,169,427



573,196


593,091


1,166,287


579,396


597,230


2,342,913













Fluids

399,062


405,838


804,900



340,236


351,511


691,747


352,018


355,508


1,399,273













Refrigeration & Food Equipment

363,252


429,386


792,638



372,097


448,115


820,212


492,460


418,758


1,731,430













Intra-segment eliminations

(266)


(319)


(585)



(451)


(133)


(584)


(164)


(237)


(985)


Total consolidated revenue

$

1,622,273


$

1,686,345


$

3,308,618



$

1,715,501


$

1,758,628


$

3,474,129


$

1,787,582


$

1,694,600


$

6,956,311













NET EARNINGS











Segment Earnings:











Energy

$

11,244


$

(75)


$

11,169



$

52,305


$

40,909


$

93,214


$

48,726


$

31,250


$

173,190


Engineered Systems

93,748


104,034


197,782



88,149


96,702


184,851


102,866


89,244


376,961


Fluids

46,047


54,033


100,080



54,634


70,168


124,802


74,911


62,404


262,117


Refrigeration & Food Equipment

38,161


63,230


101,391



36,150


65,732


101,882


76,665


42,752


221,299


Total Segments

189,200


221,222


410,422



231,238


273,511


504,749


303,168


225,650


1,033,567


Corporate expense / other

29,862


24,566


54,428



34,526


20,382


54,908


25,881


24,911


105,700


Net interest expense

31,714


32,157


63,871



32,037


31,988


64,025


31,983


31,249


127,257


Earnings from continuing operations
before provision for income taxes

127,624


164,499


292,123



164,675


221,141


385,816


245,304


169,490


800,610


Provision for income taxes

28,268


46,209


74,477



47,485


65,507


112,992


58,821


32,916


204,729


Earnings from continuing operations

99,356


118,290


217,646



117,190


155,634


272,824


186,483


136,574


595,881


Earnings (loss) from discontinued
operations, net





92,320


176,762


269,082


(385)


5,251


273,948


Net earnings

$

99,356


$

118,290


$

217,646



$

209,510


$

332,396


$

541,906


$

186,098


$

141,825


$

869,829













SEGMENT OPERATING MARGIN









Energy

4.0

%

%

2.1

%


12.2

%

11.2

%

11.7

%

13.4

%

9.7

%

11.7

%

Engineered Systems

16.2

%

17.6

%

16.9

%


15.4

%

16.3

%

15.8

%

17.8

%

14.9

%

16.1

%

Fluids

11.5

%

13.3

%

12.4

%


16.1

%

20.0

%

18.0

%

21.3

%

17.6

%

18.7

%

Refrigeration & Food Equipment

10.5

%

14.7

%

12.8

%


9.7

%

14.7

%

12.4

%

15.6

%

10.2

%

12.8

%

Total Segment

11.7

%

13.1

%

12.4

%


13.5

%

15.6

%

14.5

%

17.0

%

13.3

%

14.9

%












DEPRECIATION AND AMORTIZATION EXPENSE









Energy

$

34,160


$

33,289


$

67,449



$

34,427


$

32,740


$

67,167


$

31,858


$

42,754


$

141,779


Engineered Systems

16,036


16,075


32,111



14,526


14,392


28,918


14,503


16,493


59,914


Fluids

20,511


20,981


41,492



13,848


13,648


27,496


13,367


15,215


56,078


Refrigeration & Food Equipment

16,728


16,881


33,609



16,458


16,406


32,864


16,609


16,601


66,074


Corporate

1,169


868


2,037



923


841


1,764


837


643


3,244



$

88,604


$

88,094


$

176,698



$

80,182


$

78,027


$

158,209


$

77,174


$

91,706


$

327,089













 

DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)






2016


2015


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2015

BOOKINGS











Energy

$

273,445


$

246,021


$

519,466



$

416,628


$

345,079


$

761,707


$

351,557


$

315,996


$

1,429,260













Engineered Systems











Printing & Identification

242,569


266,490


509,059



235,617


224,203


459,820


226,756


250,639


937,215


Industrials

329,957


304,345


634,302



337,070


336,173


673,243


338,744


357,451


1,369,438



572,526


570,835


1,143,361



572,687


560,376


1,133,063


565,500


608,090


2,306,653













Fluids

418,345


413,767


832,112



339,310


333,695


673,005


357,032


321,154


1,351,191













Refrigeration & Food Equipment

411,367


468,661


880,028



419,659


486,793


906,452


430,681


379,967


1,717,100













Intra-segment eliminations

(90)


(944)


(1,034)



(628)


(417)


(1,045)


(385)


(486)


(1,916)













Total consolidated bookings

$

1,675,593


$

1,698,340


$

3,373,933



$

1,747,656


$

1,725,526


$

3,473,182


$

1,704,385


$

1,624,721


$

6,802,288













BACKLOG











Energy

$

144,828


$

129,873




$

212,060


$

194,819



$

156,631


$

155,586














Engineered Systems











Printing & Identification

102,640


104,509




108,151


103,403



100,476


98,288



Industrials

235,384


210,646




276,598


248,592



236,298


250,725




338,024


315,155




384,749


351,995



336,774


349,013














Fluids

286,457


315,786




259,504


240,389



236,608


243,459














Refrigeration & Food Equipment

303,479


332,312




337,084


373,193



307,351


247,352














Intra-segment eliminations

(36)


(265)




(595)


(354)



(598)


(808)














Total consolidated backlog

$

1,072,752


$

1,092,861




$

1,192,802


$

1,160,042



$

1,036,766


$

994,602



 

DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)












Earnings Per Share












2016


2015


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2015

Basic earnings (loss) per common share:








Continuing operations

$

0.64


$

0.76


$

1.40



$

0.72


$

0.98


$

1.70


$

1.20


$

0.88


$

3.78


Discontinued operations





0.57


1.11


1.68



0.03


1.74


Net earnings

$

0.64


0.76


1.40



$

1.30


$

2.10


$

3.38


$

1.20


$

0.92


$

5.52













Diluted earnings (loss) per common share:








Continuing operations

$

0.64


$

0.76


$

1.39



$

0.72


$

0.97


$

1.69


$

1.19


$

0.87


$

3.74


Discontinued operations





0.57


1.10


1.66



0.03


1.72


Net earnings

$

0.64


0.76


1.39



$

1.28


$

2.07


$

3.35


$

1.19


$

0.91


$

5.46













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












Net earnings (loss):











Continuing operations

$

99,356


$

118,290


$

217,646



$

117,190


$

155,634


$

272,824


$

186,483


$

136,574


$

595,881


Discontinued operations





92,320


176,762


269,082


(385)


5,251


273,948


Net earnings

$

99,356


118,290


217,646



$

209,510


$

332,396


$

541,906


$

186,098


$

141,825


$

869,829













Average shares outstanding:








Basic

155,064


155,180


155,122



161,650


158,640


160,137


155,300


154,986


157,619


Diluted

156,161


156,595


156,414



163,323


160,398


161,876


156,560


156,254


159,172


 


Adjusted Earnings Per Share (Non-GAAP)










Earnings from continuing operations are adjusted by gains (losses) from discrete and other tax items and gain on disposition of business to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:













2016


2015


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2015

Adjusted earnings from continuing operations:








Earnings from continuing operations

$

99,356


$

118,290


$

217,646



$

117,190


$

155,634


$

272,824


$

186,483


$

136,574


$

595,881


Gains (losses) from discrete and other tax items

7,348


(1,221)


6,127






8,131


9,382


17,513


Gain on disposition of business

11,228



11,228









Adjusted earnings from continuing operations

$

80,780


$

119,511


$

200,291



$

117,190


$

155,634


$

272,824


$

178,352


$

127,192


$

578,368













Adjusted diluted earnings per common share:








Earnings from continuing operations

$

0.64


$

0.76


$

1.39



$

0.72


$

0.97


$

1.69


$

1.19


$

0.87


$

3.74


Gains (losses) from discrete and other tax items

0.05


(0.01)


0.04






0.05


0.06


0.11


Gain on disposition of business

0.07



0.07









Adjusted earnings from continuing operations

$

0.52


$

0.76


$

1.28



$

0.72


$

0.97


$

1.69


$

1.14


$

0.81


$

3.63













* Per share data may not add due to rounding.








 

 

 

DOVER CORPORATION
ADDITIONAL INFORMATION
(unaudited)(in thousands)

Quarterly Cash Flow





2016


2015


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2015

Net Cash Flows Provided By (Used In):











Operating activities

$

133,413


$

207,868


$

341,281



$

131,332


$

218,911


$

350,243


$

282,213


$

316,603


$

949,059


Investing activities

(425,857)


(69,415)


(495,272)



156,585


457,875


614,460


(33,454)


(615,584)


(34,578)


Financing activities

178,507


(127,678)


50,829



(416,603)


(608,329)


(1,024,932)


(86,033)


19,079


(1,091,886)


 

Quarterly Free Cash Flow (Non-GAAP)


2016


2015


Q1

Q2

Q2 YTD


Q1

Q2

Q2 YTD

Q3

Q4

FY 2015

Cash flow from operating activities

$

133,413


$

207,868


$

341,281



$

131,332


$

218,911


$

350,243


$

282,213


$

316,603


$

949,059


Less: Capital expenditures

(37,230)


(35,422)


(72,652)



(27,956)


(43,807)


(71,763)


(39,516)


(42,972)


(154,251)


Free cash flow

$

96,183


$

172,446


$

268,629



$

103,376


$

175,104


$

278,480


$

242,697


$

273,631


$

794,808













Free cash flow as a percentage of
earnings from continuing operations

96.8

%

145.8

%

123.4

%


88.2

%

112.5

%

102.1

%

130.1

%

200.4

%

133.4

%












Free cash flow as a percentage of revenue

5.9

%

10.2

%

8.1

%


6.0

%

10.0

%

8.0

%

13.6

%

16.1

%

11.4

%

 

Revenue Growth Factors


Three Months Ended June 30, 2016


Energy


Engineered Systems


Fluids


Refrigeration & Food Equipment


Total


Organic

(28)

%


2

%


(8)

%


1

%


(7)

%


Acquisitions

%


3

%


24

%


%


6

%


Dispositions

%


(4)

%


%


(5)

%


(3)

%


Currency translation

(1)

%


(1)

%


%


%


%



(29)

%


%


16

%


(4)

%


(4)

%


 


Six Months Ended June 30, 2016


Energy


Engineered Systems


Fluids


Refrigeration & Food Equipment


Total

Organic

(31)

%


2

%


(6)

%


2

%


(7)

%

Acquisitions

%


3

%


23

%


%


6

%

Dispositions

%


(4)

%


%


(5)

%


(3)

%

Currency translation

(1)

%


(2)

%


(1)

%


%


(1)

%


(32)

%


(1)

%


16

%


(3)

%


(5)

%

 

Non-GAAP Disclosures
In an effort to provide investors with additional information regarding our results as determined by GAAP, Management also discloses non-GAAP information that Management believes provides useful information to investors. Adjusted earnings from continuing operations, adjusted diluted earnings per common share, free cash flow and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for earnings from continuing operations, diluted earnings per common share, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.  Adjusted earnings from continuing operations represents earnings from continuing operations adjusted for gains or losses from discrete and other tax items and for gain on disposition of business.  Adjusted diluted earnings per common share represents adjusted earnings from continuing operations divided by average diluted shares.  Management believes this information is useful to investors to better understand the company's ongoing profitability and facilitates easier comparisons of the company's profitability to prior and future periods and to its peers.  Free cash flow represents net cash provided by operating activities minus capital expenditures.  Management believes that free cash flow is an important measure of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.  Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions, provides a useful comparison of our revenue performance and trends between periods.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dover-reports-second-quarter-2016-results-and-updates-full-year-guidance-300301860.html

SOURCE Dover Corporation


Source: PR Newswire (July 21, 2016 - 6:40 AM EDT)

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