Dover Reports First Quarter 2014 Results and Reaffirms 2014 Guidance

-- Reports quarterly revenue of $1.9 billion, an increase of 7% over the prior year

-- Delivers quarterly diluted earnings per share from continuing operations of $1.02, an increase of 7% over prior year

-- Achieves adjusted quarterly diluted earnings per share from continuing operations of $1.01, excluding minor tax benefits, up 9% from an adjusted prior year

-- Reaffirms 2014 full year revenue growth of 6% to 7% and diluted earnings per share from continuing operations in the range of $4.60 to $4.80.

News provided by

Dover

Apr 17, 2014, 07:00 ET

DOWNERS GROVE, Ill., April 17, 2014 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the first quarter ended March 31, 2014, revenue was $1.9 billion, an increase of 7% over the prior year. The revenue increase was driven by organic growth of 4% and an increase of 3% from acquisitions. Earnings from continuing operations were $176.3 million, or $1.02 diluted earnings per share ("EPS"), compared to $167.2 million, or $0.95 EPS, in the prior year period, representing increases of 5% and 7%, respectively. EPS from continuing operations for the quarter ended March 31, 2014 and 2013 include discrete tax benefits of $0.01 and $0.02 EPS, respectively. Excluding these items, adjusted EPS from continuing operations for the first quarter of 2014 was $1.01, reflecting an increase of 9% over an adjusted EPS of $0.93 in the prior year period.

Commenting on the first quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "Our strong first quarter results were highlighted by solid revenue growth, broad-based bookings growth, and building momentum as we moved through the quarter. Revenue growth was led by Fluids and Engineered Systems, along with solid growth in Energy. Our book-to-bill of 1.09 was driven by strong order activity at Refrigeration & Food Equipment, Fluids and Engineered Systems. The combination of a strong first quarter, growing bookings and backlog, and our positioning with customers give me great confidence that Dover will have an outstanding year."

"In addition to our strong results, we also completed several important initiatives in the first quarter. We successfully spun off Knowles, completed our $1 billion share repurchase program, and realigned our businesses into a new segment structure organized around our key end-markets to better focus on growth strategies. Our new structure will also provide greater opportunities to leverage scale and capitalize on productivity initiatives."

"Looking forward, our view of 2014 remains unchanged. We continue to expect full year organic revenue growth of 3% to 4%, complemented by growth from completed acquisitions of 3%, resulting in total revenue growth of 6% to 7%. Our full year segment margin expectations of around 18% are also unchanged. As a result, we are re-affirming our full year EPS to be in the range of $4.60 to $4.80."

Net earnings for the first quarter of 2014 were $160.1 million or $0.93 EPS, compared to net earnings of $210.0 million, or $1.20 EPS, for the same period of 2013. 2014 results reflected a loss from discontinued operations of $16.2 million, or $0.09 EPS, which included $25.8 million in spin off costs. 2013 results included earnings from discontinued operations of $42.8 million, or $0.24 EPS.

Dover will host a webcast of its first quarter 2014 conference call at 10:30 A.M. Eastern Time (9:30 A.M. Central Time) on Thursday, April 17, 2014. 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 first 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 $8 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 nearly 60 years, our team of 27,000 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 Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, operating and strategic plans, income, earnings, cash flows, changes in operations, operating improvements, industries in which Dover businesses operate and the U.S. and global economies. Statements in this press release that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates," "expects," "believes," "indicates," "suggests," "will," "plans," "supports," "projects," "should," "would," "could," "forecast" and "management is of the opinion," 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, the state of the worldwide economy and sovereign credit; political events; the impact of natural disasters and their effect on global supply chains and energy markets; current economic conditions and uncertainties in the credit and capital markets; instability in countries where Dover conducts business; the ability of Dover's businesses to expand into new geographic markets and to anticipate and meet customer demands for new products; increased competition and pricing pressures in the markets served by Dover's businesses; the terms and timing of the sale of any business in discontinued operations; the impact of loss of a single-source manufacturing facility; changes in customer demand or loss of a significant customer; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes including environmental regulations, conflict minerals disclosure requirements, and tax policies (including domestic and international export subsidy programs, R&E credits and other similar programs); protection and validity of patent and other intellectual property rights; the ability to identify and successfully consummate value-adding acquisition opportunities; Dover's ability to achieve expected savings from integration, synergy and other cost-control initiatives; unforeseen developments in contingencies such as litigation; international economic conditions including interest rate and currency exchange rate fluctuations; possible future terrorist threats and their effect on the worldwide economy; and a downgrade in Dover's credit ratings. 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 in this press release. Dover undertakes no obligation to update any forward-looking statement, except as required by law.

INVESTOR SUPPLEMENT - FIRST QUARTER 2014

DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)

	Three Months Ended March 31,
	2014		2013
Revenue	$	1,884,647	$	1,763,977
Cost of goods and services	1,148,438		1,082,359
Gross profit	736,209		681,618
Selling and administrative expenses	452,282		416,437
Operating earnings	283,927		265,181
Interest expense, net	32,665		30,284
Other expense (income), net	356		(2,889)
Earnings before provision for income taxes and discontinued operations	250,906		237,786
Provision for income taxes	74,582		70,573
Earnings from continuing operations	176,324		167,213
(Loss) earnings from discontinued operations, net	(16,186)		42,790
Net earnings	$	160,138	$	210,003

Basic earnings per common share:
Earnings from continuing operations	$	1.04	$	0.96
Earnings (loss) from discontinued operations, net	(0.10)		0.25
Net earnings	0.94		1.21

Weighted average shares outstanding	169,750		173,448

Diluted earnings per common share:
Earnings from continuing operations	$	1.02	$	0.95
Earnings (loss) from discontinued operations, net	(0.09)		0.24
Net earnings	0.93		1.20

Weighted average shares outstanding	172,013		175,567

Dividends paid per common share	$	0.375	$	0.350

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

	2014			2013
	Q1			Q1			Q2			Q3			Q4			FY 2013
REVENUE
Energy	$	478,773		$	462,679		$	465,906		$	467,688		$	457,580		$	1,853,853

Engineered Systems
Printing & Identification	263,533			237,869			250,616			256,565			276,672			1,021,722
Industrials	386,245			367,456			388,810			385,640			374,934			1,516,840
	649,778			605,325			639,426			642,205			651,606			2,538,562

Fluids	345,009			273,638			310,137			309,241			343,822			1,236,838

Refrigeration & Food Equipment	411,493			422,468			517,574			521,322			426,476			1,887,840

Intra-segment eliminations	(406)			(133)			(632)			(245)			(430)			(1,440)
Total consolidated revenue	$	1,884,647		$	1,763,977		$	1,932,411		$	1,940,211		$	1,879,054		$	7,515,653

NET EARNINGS
Segment Earnings:
Energy	$	118,968		$	118,708		$	109,662		$	119,086		$	112,193		$	459,649
Engineered Systems	92,320			83,283			102,804			111,850			101,511			399,448
Fluids	57,942			47,601			58,768			63,056			55,098			224,523
Refrigeration & Food Equipment	44,862			52,110			82,177			86,446			46,574			267,307
Total Segments	314,092			301,702			353,411			380,438			315,376			1,350,927
Corporate expense / other	30,521			33,632			34,860			32,532			28,752			129,776
Net interest expense	32,665			30,284			30,232			30,236			29,920			120,672
Earnings from continuing operations before provision for income taxes	250,906			237,786			288,319			317,670			256,704			1,100,479
Provision for income taxes	74,582			70,573			30,261			91,435			74,138			266,407
Earnings from continuing operations	176,324			167,213			258,058			226,235			182,566			834,072
Earnings (loss) from discontinued operations, net	(16,186)			42,790			71,991			42,879			11,397			169,057
Net earnings	$	160,138		$	210,003		$	330,049		$	269,114		$	193,963		$	1,003,129

SEGMENT OPERATING MARGIN
Energy	24.8		%	25.7		%	23.5		%	25.5		%	24.5		%	24.8		%
Engineered Systems	14.2		%	13.8		%	16.1		%	17.4		%	15.6		%	15.7		%
Fluids	16.8		%	17.4		%	18.9		%	20.4		%	16.0		%	18.2		%
Refrigeration & Food Equipment	10.9		%	12.3		%	15.9		%	16.6		%	10.9		%	14.2		%
Total Segment	16.7		%	17.1		%	18.3		%	19.6		%	16.8		%	18.0		%

DEPRECIATION AND AMORTIZATION EXPENSE
Energy	$	25,575		$	24,448		$	24,714		$	24,707		$	25,206		$	99,075
Engineered Systems	18,977			17,450			17,885			18,110			18,137			71,582
Fluids	16,366			11,361			11,570			11,790			14,091			48,812
Refrigeration & Food Equipment	17,212			16,585			16,611			16,962			17,070			67,228
Corporate	869			858			1,029			1,030			944			3,861
	$	78,999		$	70,702		$	71,809		$	72,599		$	75,448		$	290,558

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

	2014		2013
	Q1		Q1		Q2		Q3		Q4		FY 2013
BOOKINGS
Energy	$	478,469	$	515,388	$	416,892	$	481,021	$	440,261	$	1,853,562

Engineered Systems
Printing & Identification	282,867		237,291		259,380		256,210		270,392		1,023,273
Industrials	427,557		405,555		396,886		344,764		371,797		1,519,002
Eliminations	(17)		(82)		(129)		(5)		279		63
	710,407		642,764		656,137		600,969		642,468		2,542,338

Fluids	362,943		303,609		298,817		307,729		351,767		1,261,922

Refrigeration & Food Equipment	493,731		482,742		515,320		433,426		450,850		1,882,338

Intra-segment eliminations	(506)		(560)		(708)		(416)		734		(950)

Total consolidated bookings	$	2,045,044	$	1,943,943	$	1,886,458	$	1,822,729	$	1,886,080	$	7,539,210

BACKLOG
Energy	$	210,846	$	274,733	$	218,764	$	233,820	$	206,790

Engineered Systems
Printing & Identification	136,309		95,353		103,864		105,699		100,032
Industrials	414,979		415,478		421,834		379,457		374,008
	551,288		510,831		525,697		485,155		474,040

Fluids	328,617		222,255		228,212		228,880		310,330

Refrigeration & Food Equipment	431,298		417,246		412,366		324,042		347,004

Intra-segment eliminations	(374)		(385)		(526)		(387)		(592)

Total consolidated backlog	$	1,521,675	$	1,424,680	$	1,384,513	$	1,271,510	$	1,337,572

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

	2014		2013
	Q1		Q1		Q2		Q3		Q4		FY 2013
Basic earnings (loss) per common share:
Continuing operations	$	1.04	$	0.96	$	1.51	$	1.33	$	1.07	$	4.87
Discontinued operations	(0.10)		0.25		0.42		0.25		0.07		0.99
Net earnings	0.94		1.21		1.93		1.58		1.14		5.86

Diluted earnings (loss) per common share:
Continuing operations	$	1.02	$	0.95	$	1.49	$	1.31	$	1.06	$	4.81
Discontinued operations	(0.09)		0.24		0.42		0.25		0.07		0.97
Net earnings	0.93		1.20		1.91		1.56		1.13		5.78

Adjusted diluted earnings per common share (calculated below):
Continuing operations	$	1.01	$	0.93	$	1.13	$	1.25	$	1.02	$	4.33

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

Net earnings (loss):
Continuing operations	$	176,324	$	167,213	$	258,058	$	226,235	$	182,566	$	834,072
Discontinued operations	(16,186)		42,790		71,991		42,879		11,397		169,057
Net earnings	160,138		210,003		330,049		269,114		193,963		1,003,129

Average shares outstanding:
Basic	169,750		173,448		171,111		170,544		170,027		171,271
Diluted	172,013		175,567		173,097		172,734		172,265		173,547


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:

	2014		2013
	Q1		Q1		Q2		Q3		Q4		FY 2013
Adjusted earnings from continuing operations:
Earnings from continuing operations	$	176,324	$	167,213	$	258,058	$	226,235	$	182,566	$	834,072
Gains from discrete and other tax items	2,541		4,343		61,477		7,751		6,084		79,655
Other one-time gains, net of tax	—		—		—		2,866		—		2,866
Adjusted earnings from continuing operations	$	173,783	$	162,870	$	196,581	$	215,618	$	176,482	$	751,551

Adjusted diluted earnings per common share:
Earnings from continuing operations	$	1.02	$	0.95	$	1.49	$	1.31	$	1.06	$	4.81
Gains from discrete and other tax items	0.01		0.02		0.36		0.04		0.04		0.46
Other one-time gains, net of tax	—		—		—		0.02		—		0.02
Adjusted earnings from continuing operations	$	1.01	$	0.93	$	1.13	$	1.25	$	1.02	$	4.33

* Per share data may not add due to rounding.

DOVER CORPORATION
QUARTERLY FREE CASH FLOW
(unaudited)(in thousands)

	2014			2013
	Q1			Q1			Q2			Q3			Q4			FY 2013
Cash flow from operating activities	$	39,778		$	57,713		$	249,053		$	279,375		$	418,280		$	1,004,421
Less: Additions to property, plant and equipment	(33,402)			(26,326)			(32,017)			(39,644)			(47,579)			(145,566)
Free cash flow	$	6,376		$	31,387		$	217,036		$	239,731		$	370,701		$	858,855

Free cash flow as a percentage of earnings from continuing operations	3.6		%	18.8		%	84.1		%	106.0		%	203.1		%	103.0		%

Free cash flow as a percentage of revenue	0.3		%	1.8		%	11.2		%	12.4		%	19.7		%	11.4		%