Dover Corporation Reports Fourth Quarter and Full Year 2011 Results

DOWNERS GROVE, Ill., Jan. 25, 2012  /PRNewswire-FirstCall/ -- Dover Corporation (NYSE: DOV) announced today that for the fourth quarter ended December 31, 2011, revenue was $2.0 billion, an increase of 15% over the prior-year period.  The revenue increase was driven by organic growth of 6% and a 9% increase from acquisitions.  Earnings from continuing operations for the fourth quarter of 2011 were $208.9 million, or diluted earnings per share ("EPS") of $1.12, compared to $184.9 million, or $0.97 EPS, in the prior-year period, representing increases of 13% and 15%, respectively.  Excluding the impact of tax benefits of $0.05 EPS recognized in the current quarter and $0.07 EPS recognized in the prior-year period, adjusted EPS from continuing operations for the fourth quarter of 2011 was $1.07, reflecting an increase of 19% over an adjusted EPS of $0.90 in the prior-year period.

Revenue for the year ended December 31, 2011 was $8.0 billion, an increase of 20% over the prior year, reflecting organic growth of 11%, a 7% increase from acquisitions and a 2% impact from foreign exchange. Earnings from continuing operations for the year ended December 31, 2011 were $846.4 million, or $4.48 EPS, compared to $690.8 million, or $3.65 EPS in the prior year, representing a 23% increase in both earnings and EPS. Excluding the impact of tax benefits of $0.22 EPS in the current year and $0.27 EPS in the prior year, adjusted EPS from continuing operations for the year ended December 31, 2011 was $4.26, an increase of 26% over an adjusted EPS of $3.38 in the prior year.

Commenting on the fourth quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "Capped off by a solid fourth quarter, Dover delivered a record setting 2011 in terms of revenue, earnings, EPS and bookings.  Organic revenue growth in the fourth quarter of 6% was driven by broad-based strength in energy, handsets, fluids, and industrial end-markets. Our segment margin was 16.5%, where solid performances in our Energy, Communication Technologies and Engineered Systems segments partially offset weakness in Printing & Identification and acquisition-related costs. The majority of our businesses continued to book well as we ended the year with a seasonally normal book-to-bill of 1.00."

"In addition to our strong financial results, we accomplished several important strategic initiatives in 2011. Importantly, we realigned our businesses into a new segment structure to more closely match our targeted growth markets.  We also deployed $1.4 billion in 2011 on acquisitions and divested three businesses consistent with our strategy of focusing on our growth spaces.  Lastly, we generated nearly $800 million in free cash flow, which enabled us to aggressively invest in higher growth economies and innovation, and to continue our long tradition of raising our annual dividend, now standing at 56 consecutive years."

"Looking forward, we expect full year 2012 revenue growth of 7% - 10%, comprising organic revenue growth of 4% - 7%, plus growth from completed acquisitions of 3%. Based on this revenue assumption, we expect full-year diluted EPS from continuing operations to be in the range of $4.70 - $5.00."

Net earnings for the fourth quarter of 2011 were $278.3 million, or $1.49 EPS, including net income from discontinued operations of $69.4 million, or $0.37 EPS (inclusive of a $0.34 EPS gain on the sale of a business), compared to net earnings of $198.3 million, or $1.04 EPS, for the same period of 2010, which included net income from discontinued operations of $13.4 million, or $0.07 EPS.  Net earnings for the year ended December 31, 2011 were $895.2 million, or $4.74 EPS, including net income from discontinued operations of $48.9 million, or $0.26 EPS (inclusive of a $0.02 EPS net loss, primarily reflecting the sale of three businesses), compared to net earnings of $700.1 million, or $3.70 EPS for the year ended December 31, 2010, which included net income from discontinued operations of $9.4 million, or $0.05 EPS.

Dover will host a webcast of its fourth quarter 2011 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Wednesday, January 25, 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 fourth quarter and full year 2011 results and its operating companies 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 segments: Communication Technologies, Energy, Engineered Systems and Printing & Identification. Dover employs over 33,000 people worldwide. The company is headquartered in Downers Grove, Illinois. Additional information is available 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, the state of the worldwide economy and sovereign credit, especially in Europe; political events that could impact 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; current economic conditions and uncertainties in the credit and capital markets; a downgrade in Dover's credit ratings; international economic conditions including interest rate and currency exchange rate fluctuations; 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 and tax policies (including domestic and international 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; the cyclical nature of some of Dover's companies; domestic housing industry weakness; instability in countries where Dover conducts business; and possible future terrorist threats and their effect on the worldwide economy. 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.

ADDITIONAL INFORMATION

FOURTH QUARTER AND FULL YEAR 2011

Acquisitions

During the fourth quarter of 2011, the Company completed two add-on acquisitions in the Engineered Systems segment.  For the full year 2011, Dover made a total of nine acquisitions for consideration totaling $1.4 billion. This included the acquisition of Harbison-Fischer within the Energy segment in the first quarter and the acquisition of Sound Solutions within the Communication Technologies segment in the third quarter.

Dispositions

In the fourth quarter of 2011, the Company completed the sale of Heil Trailer International, resulting in an after-tax gain of $0.34 diluted earnings per share ("EPS"). Fourth quarter net earnings from discontinued operations was $0.37 EPS, which includes income from the operations of Heil prior to sale as well as adjustments to other discontinued assets and liabilities. On a full-year basis, the Company generated a net loss on sale of $0.02 EPS, which includes the $0.35 EPS loss on the sale of Paladin and Crenlo in the third quarter and other adjustments for prior year dispositions. For the full year, net earnings from discontinued operations was $0.26 EPS, which includes income from the operations of the businesses sold in 2011 as well as adjustments to other discontinued assets and liabilities.

Tax Rate

The effective tax rate on continuing operations for the fourth quarter of 2011 was 22.3%, compared to the prior-year fourth quarter rate of 20.9%. On a full year basis, the effective tax rates on continuing operations for 2011 and 2010 were 22.7% and 23.2%, respectively. The 2011 and 2010 rates were favorably impacted by discrete and other items, as shown in the reconciliation for quarterly earnings per share included herein. After adjusting for discrete and other items, the full year rates of 26.5% for 2011 and 28.8% for 2010 primarily reflect the impact of changes in the geographic mix of earnings.

Revenue Growth Factors

Free Cash Flow

The following table is a reconciliation of free cash flow (a non-GAAP measure) from cash flow provided by operating activities:

The full year increase in 2011 free cash flow reflects higher earnings from continuing operations before depreciation and amortization and lower investment in working capital, partially offset by higher tax payments in 2011. In 2011, the Company made tax payments of approximately $280 million compared to $103 million in the prior year. Free cash flow is also impacted by higher capital expenditures in 2011 necessary to fund expansion in the Company's high-growth businesses.

Share Repurchases

During the year ended December 31, 2011, pursuant to a five-year 10,000,000 share repurchase program authorized by the Board of Directors in May 2007, the Company purchased approximately 4.0 million shares of its common stock in the open market at an average price of $58.78 per share.  Approximately 2.5 million shares remain authorized for repurchase under this five-year authorization as of December 31, 2011.

Capitalization

The following table provides a summary reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:

The Company's net debt to net capitalization ratio increased at December 31, 2011 primarily due to the use of cash and debt to fund acquisitions totaling $1.4 billion during the year. Total debt increased by $380 million during 2011, primarily due to net borrowings of $789 million under the 4.3% 10-year Notes due 2021 and 5.375% 30-year Notes due 2041 issued in February, part of which were used to repay $400 million of other borrowings, principally commercial paper used to repay the 6.50% 10-year Notes which came due earlier in February 2011.  In 2011, the Company also received cash proceeds of $517 million primarily from the sale of three businesses.

Non-GAAP Information:

These Investor Supplement tables contain historical financial information presented under Dover's new segment structure, as discussed within this release. These segment level disclosures are considered "Non-GAAP" financial information until such time that the new segment reporting structure is included within a periodic filing with the Securities and Exchange Commission. Management believes this non-GAAP financial information is useful to investors to better understand historical trends under the revised segment structure, which the company will be reporting under in its Form 10-K for the year ending December 31, 2011. Dover has disclosed herein non-GAAP measures of adjusted earnings from continuing operations used in calculating adjusted diluted earnings per common share, as 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.  The company has also disclosed herein the non-GAAP measure of free cash flow. Management believes free cash flow is an important measure of the company's operating performance and liquidity that provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase its common stock.

SOURCE Dover Corporation

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED