DOWNERS GROVE, Ill., Feb. 1, 2024 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the fourth quarter and full year ended December 31, 2023. All comparisons are to the comparable period of the prior fiscal year, unless otherwise noted.
Three Months Ended December 31, |
Years Ended December 31, |
|||||||||||
($ in millions, except per share data) |
2023 |
2022 |
% Change |
2023 |
2022 |
% Change |
||||||
U.S. GAAP |
||||||||||||
Revenue |
$ 2,106 |
$ 2,139 |
(2) % |
$ 8,438 |
$ 8,508 |
(1) % |
||||||
Net earnings |
296 |
264 |
12 % |
1,057 |
1,065 |
(1) % |
||||||
Diluted EPS |
2.11 |
1.87 |
13 % |
7.52 |
7.42 |
1 % |
||||||
Non-GAAP |
||||||||||||
Organic revenue change |
(3) % |
(1) % |
||||||||||
Adjusted net earnings 1 |
345 |
305 |
13 % |
1,237 |
1,213 |
2 % |
||||||
Adjusted diluted EPS |
2.45 |
2.16 |
13 % |
8.80 |
8.45 |
4 % |
1 Q4 and full year 2023 and 2022 adjusted net earnings exclude after tax purchase accounting expenses, disposition costs and restructuring and other costs. Q4 and full year 2023 include the net income tax benefit of an internal reorganization executed in 2023, and full year 2022 excludes a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act.
For the quarter ended December 31, 2023, Dover generated revenue of $2.1 billion, a decrease of 2% (-3% organic). GAAP net earnings of $296 million increased 12%, and GAAP diluted EPS of $2.11 was up 13%. On an adjusted basis, net earnings of $345 million increased 13% and adjusted diluted EPS of $2.45 was up 13%.
For the year ended December 31, 2023, Dover generated revenue of $8.4 billion, a decrease of 1% (-1% organic). GAAP net earnings of $1.1 billion decreased 1%, and GAAP diluted EPS of $7.52 was up 1%. On an adjusted basis, net earnings of $1.2 billion increased 2%, and adjusted diluted EPS of $8.80 was up 4%.
A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "The fourth quarter market conditions and our business posture were in line with our forecasts. In the end markets where secular demand trends inflected positively, such as CO2 refrigeration systems, waste handling and precision components, we were able to capitalize on the market conditions and drive margin mix higher benefiting the consolidated portfolio in the quarter. We reduced production volumes in certain product lines in line with our mid-year forecasts in response to destocking trends that resulted from lead time normalization and higher inventory carrying costs driven by interest rate increases. We believe these proactive actions balanced channel inventories in the majority of our markets with forecasted demand for 2024. This operating posture drove an exemplary operating cash flow performance in the quarter and positions us to match production performance with prevailing demand in the coming year.
"Our solid operational execution was complemented by active portfolio enhancement in line with the priorities we reiterated at our investor day last March. In the past few months we completed several accretive and synergistic bolt-on acquisitions that improve our revenue mix with high-growth recurring and software revenue streams. We anticipate completing the De-Sta-Co sale by the end of the first quarter. Bolstered by our proactive working capital management and margin enhancement, we enter 2024 with a strong balance sheet and ample capacity to execute against a strong acquisition pipeline and pursue opportunistic capital return strategies, as we continue our portfolio enhancement strategy.
"We have a constructive outlook for 2024. We expect demand conditions to progressively improve from the fourth quarter exit rate through the year on solid underlying end markets across most of the portfolio, supported by the recent positive year-over-year order momentum. There is significant runway in our margin improvement plan with numerous cost and performance levers available to continue driving strong margin conversion. With this backdrop, we are confident in our ability to continue to deliver long-term value creation for our shareholders through a combination of accretive top line growth, capital allocation, and portfolio enhancement."
FULL YEAR 2024 GUIDANCE:
In 2024, Dover expects to generate GAAP EPS in the range of $7.90 to $8.10 (adjusted EPS of $8.95 to $9.15), based on full year revenue growth of 2% to 4% (1% to 3% on an organic basis).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its fourth quarter and full year 2023 results at 9:30 A.M. Eastern Time (8:30 A.M. Central Time) on Thursday, February 1, 2024. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's results and its operating segments can be found on the Company's website.
ABOUT DOVER:
Dover is a diversified global manufacturer and solutions provider with annual revenue of over $8 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of over 25,000 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 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. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, general economic conditions and conditions in the particular markets in which we operate; supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics; the impact of interest rate and currency exchange rate fluctuations; the impacts of natural or human-induced disasters, acts of war, terrorism, international conflicts, and public health crises on the global economy and on our customers, suppliers, employees, business and cash flows; changes in customer demand and capital spending; competitive factors and pricing pressures; our ability to develop and launch new products in a cost-effective manner; our ability to realize synergies from newly acquired businesses; and our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
INVESTOR SUPPLEMENT - FOURTH QUARTER AND FULL YEAR 2023 |
|||||||
DOVER CORPORATION |
|||||||
CONSOLIDATED STATEMENTS OF EARNINGS |
|||||||
(unaudited)(in thousands, except per share data*) |
|||||||
Three Months Ended December 31, |
Years Ended December 31, |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Revenue |
$ 2,105,757 |
$ 2,139,181 |
$ 8,438,134 |
$ 8,508,088 |
|||
Cost of goods and services |
1,319,994 |
1,372,852 |
5,353,501 |
5,444,532 |
|||
Gross profit |
785,763 |
766,329 |
3,084,633 |
3,063,556 |
|||
Selling, general and administrative expenses |
431,291 |
413,611 |
1,718,290 |
1,684,226 |
|||
Operating earnings |
354,472 |
352,718 |
1,366,343 |
1,379,330 |
|||
Interest expense |
30,898 |
33,126 |
131,305 |
116,456 |
|||
Interest income |
(4,944) |
(1,462) |
(13,496) |
(4,430) |
|||
Other income, net |
(713) |
(2,359) |
(21,472) |
(20,201) |
|||
Earnings before provision for income taxes |
329,231 |
323,413 |
1,270,006 |
1,287,505 |
|||
Provision for income taxes |
32,969 |
59,834 |
213,178 |
222,129 |
|||
Net earnings |
$ 296,262 |
$ 263,579 |
$ 1,056,828 |
$ 1,065,376 |
|||
Net earnings per share: |
|||||||
Basic |
$ 2.12 |
$ 1.88 |
$ 7.56 |
$ 7.47 |
|||
Diluted |
$ 2.11 |
$ 1.87 |
$ 7.52 |
$ 7.42 |
|||
Weighted average shares outstanding: |
|||||||
Basic |
139,893 |
140,343 |
139,848 |
142,681 |
|||
Diluted |
140,586 |
141,168 |
140,599 |
143,595 |
|||
Dividends paid per common share |
$ 0.51 |
$ 0.505 |
$ 2.03 |
$ 2.01 |
|||
* Per share data may be impacted by rounding. |
DOVER CORPORATION |
|||||||||||
QUARTERLY SEGMENT INFORMATION |
|||||||||||
(unaudited)(in thousands) |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
REVENUE |
|||||||||||
Engineered Products |
$ 497,549 |
$ 473,687 |
$ 504,271 |
$ 529,080 |
$ 2,004,587 |
$ 487,647 |
$ 514,436 |
$ 516,501 |
$ 525,048 |
$ 2,043,632 |
|
Clean Energy & Fueling |
430,729 |
441,166 |
466,959 |
449,423 |
1,788,277 |
458,395 |
494,075 |
464,022 |
462,015 |
1,878,507 |
|
Imaging & Identification |
283,091 |
271,932 |
276,179 |
285,530 |
1,116,732 |
272,255 |
275,951 |
282,371 |
293,238 |
1,123,815 |
|
Pumps & Process Solutions |
413,881 |
465,626 |
431,373 |
444,811 |
1,755,691 |
435,195 |
441,127 |
433,558 |
418,355 |
1,728,235 |
|
Climate & Sustainability Technologies |
455,325 |
449,001 |
475,911 |
398,345 |
1,778,582 |
399,078 |
434,164 |
462,671 |
441,811 |
1,737,724 |
|
Intersegment eliminations |
(1,552) |
(1,326) |
(1,425) |
(1,432) |
(5,735) |
(669) |
(1,038) |
(832) |
(1,286) |
(3,825) |
|
Total consolidated revenue |
$ 2,079,023 |
$ 2,100,086 |
$ 2,153,268 |
$ 2,105,757 |
$ 8,438,134 |
$ 2,051,901 |
$ 2,158,715 |
$ 2,158,291 |
$ 2,139,181 |
$ 8,508,088 |
|
NET EARNINGS |
|||||||||||
Segment Earnings: |
|||||||||||
Engineered Products |
$ 84,275 |
$ 73,076 |
$ 101,610 |
$ 118,464 |
$ 377,425 |
$ 71,130 |
$ 81,671 |
$ 90,145 |
$ 103,573 |
$ 346,519 |
|
Clean Energy & Fueling |
73,605 |
83,616 |
92,483 |
78,900 |
328,604 |
72,962 |
99,034 |
90,208 |
90,789 |
352,993 |
|
Imaging & Identification |
68,315 |
61,336 |
70,316 |
72,545 |
272,512 |
58,598 |
61,392 |
74,477 |
73,617 |
268,084 |
|
Pumps & Process Solutions |
115,244 |
129,337 |
117,907 |
121,917 |
484,405 |
146,617 |
138,048 |
128,573 |
119,780 |
533,018 |
|
Climate & Sustainability Technologies |
73,778 |
76,074 |
84,060 |
71,468 |
305,380 |
53,609 |
64,181 |
75,190 |
61,504 |
254,484 |
|
Total segment earnings |
415,217 |
423,439 |
466,376 |
463,294 |
1,768,326 |
402,916 |
444,326 |
458,593 |
449,263 |
1,755,098 |
|
Purchase accounting expenses 1 |
42,679 |
40,200 |
40,320 |
41,744 |
164,943 |
53,286 |
47,019 |
40,526 |
40,272 |
181,103 |
|
Restructuring and other costs 2 |
14,053 |
18,143 |
12,327 |
19,150 |
63,673 |
10,552 |
7,944 |
8,613 |
11,881 |
38,990 |
|
Disposition costs 3 |
— |
— |
— |
1,302 |
1,302 |
194 |
— |
— |
— |
194 |
|
Corporate expense / other 4 |
40,072 |
33,922 |
30,686 |
45,913 |
150,593 |
37,404 |
27,967 |
27,876 |
42,033 |
135,280 |
|
Interest expense |
34,214 |
33,804 |
32,389 |
30,898 |
131,305 |
26,552 |
26,989 |
29,789 |
33,126 |
116,456 |
|
Interest income |
(2,091) |
(2,653) |
(3,808) |
(4,944) |
(13,496) |
(775) |
(949) |
(1,244) |
(1,462) |
(4,430) |
|
Earnings before provision for income taxes |
286,290 |
300,023 |
354,462 |
329,231 |
1,270,006 |
275,703 |
335,356 |
353,033 |
323,413 |
1,287,505 |
|
Provision for income taxes 5 |
57,716 |
57,784 |
64,709 |
32,969 |
213,178 |
49,550 |
45,738 |
67,007 |
59,834 |
222,129 |
|
Net earnings |
$ 228,574 |
$ 242,239 |
$ 289,753 |
$ 296,262 |
$ 1,056,828 |
$ 226,153 |
$ 289,618 |
$ 286,026 |
$ 263,579 |
$ 1,065,376 |
|
SEGMENT EARNINGS MARGIN |
|||||||||||
Engineered Products |
16.9 % |
15.4 % |
20.1 % |
22.4 % |
18.8 % |
14.6 % |
15.9 % |
17.5 % |
19.7 % |
17.0 % |
|
Clean Energy & Fueling |
17.1 % |
19.0 % |
19.8 % |
17.6 % |
18.4 % |
15.9 % |
20.0 % |
19.4 % |
19.7 % |
18.8 % |
|
Imaging & Identification |
24.1 % |
22.6 % |
25.5 % |
25.4 % |
24.4 % |
21.5 % |
22.2 % |
26.4 % |
25.1 % |
23.9 % |
|
Pumps & Process Solutions |
27.8 % |
27.8 % |
27.3 % |
27.4 % |
27.6 % |
33.7 % |
31.3 % |
29.7 % |
28.6 % |
30.8 % |
|
Climate & Sustainability Technologies |
16.2 % |
16.9 % |
17.7 % |
17.9 % |
17.2 % |
13.4 % |
14.8 % |
16.3 % |
13.9 % |
14.6 % |
|
Total segment earnings margin |
20.0 % |
20.2 % |
21.7 % |
22.0 % |
21.0 % |
19.6 % |
20.6 % |
21.2 % |
21.0 % |
20.6 % |
|
1 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. |
|||||||||||
2 Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges. |
|||||||||||
3 Q4 and FY 2023 disposition costs relate to the sale of De-Sta-Co which is expected to close in Q1 2024. Q1 and FY 2022 represents working capital adjustments related to the disposition of Unified Brands and the Race Winning Brands equity method investment in Q4 2021. |
|||||||||||
4 Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services and digital overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters. |
|||||||||||
5 Q4 and FY 2023 include the net income tax benefit of internal reorganizations executed in 2023. Q2 and FY 2022 include a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act. |
DOVER CORPORATION |
|||||||||||
QUARTERLY EARNINGS PER SHARE |
|||||||||||
(unaudited)(in thousands, except per share data*) |
|||||||||||
Earnings Per Share |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
Net earnings per share: |
|||||||||||
Basic |
$ 1.64 |
$ 1.73 |
$ 2.07 |
$ 2.12 |
$ 7.56 |
$ 1.57 |
$ 2.01 |
$ 2.01 |
$ 1.88 |
$ 7.47 |
|
Diluted |
$ 1.63 |
$ 1.72 |
$ 2.06 |
$ 2.11 |
$ 7.52 |
$ 1.56 |
$ 2.00 |
$ 2.00 |
$ 1.87 |
$ 7.42 |
|
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows: |
|||||||||||
Net earnings |
$ 228,574 |
$ 242,239 |
$ 289,753 |
$ 296,262 |
$ 1,056,828 |
$ 226,153 |
$ 289,618 |
$ 286,026 |
$ 263,579 |
$ 1,065,376 |
|
Weighted average shares outstanding: |
|||||||||||
Basic |
139,757 |
139,862 |
139,878 |
139,893 |
139,848 |
144,087 |
143,832 |
142,506 |
140,343 |
142,681 |
|
Diluted |
140,616 |
140,578 |
140,615 |
140,586 |
140,599 |
145,329 |
144,669 |
143,257 |
141,168 |
143,595 |
|
* Per share data may be impacted by rounding. |
DOVER CORPORATION |
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(unaudited)(in thousands) |
|||
December 31, 2023 |
December 31, 2022 |
||
Assets: |
|||
Cash and cash equivalents |
$ 398,561 |
$ 380,868 |
|
Receivables, net |
1,432,040 |
1,516,871 |
|
Inventories, net |
1,225,452 |
1,366,608 |
|
Prepaid and other current assets |
141,538 |
159,118 |
|
Assets held for sale |
192,644 |
— |
|
Property, plant and equipment, net |
1,031,816 |
1,004,825 |
|
Goodwill |
4,881,687 |
4,669,494 |
|
Intangible assets, net |
1,483,913 |
1,333,735 |
|
Other assets and deferred charges |
560,862 |
465,000 |
|
Total assets |
$ 11,348,513 |
$ 10,896,519 |
|
Liabilities and Stockholders' Equity: |
|||
Short-term borrowings |
$ 468,282 |
$ 735,772 |
|
Payables, accrued expenses and other current liabilities |
1,880,920 |
2,037,502 |
|
Liabilities held for sale |
64,568 |
— |
|
Deferred taxes and other non-current liabilities |
836,379 |
894,366 |
|
Long-term debt |
2,991,759 |
2,942,513 |
|
Stockholders' equity |
5,106,605 |
4,286,366 |
|
Total liabilities and stockholders' equity |
$ 11,348,513 |
$ 10,896,519 |
DOVER CORPORATION |
|||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||
(unaudited)(in thousands) |
|||
Years Ended December 31, |
|||
2023 |
2022 |
||
Operating activities: |
|||
Net earnings |
$ 1,056,828 |
$ 1,065,376 |
|
Depreciation and amortization |
317,463 |
307,538 |
|
Stock-based compensation |
31,465 |
30,821 |
|
Contributions to employee benefit plans |
(16,098) |
(12,890) |
|
Net change in assets and liabilities |
(53,313) |
(585,121) |
|
Net cash provided by operating activities |
1,336,345 |
805,724 |
|
Investing activities: |
|||
Additions to property, plant and equipment |
(192,592) |
(220,962) |
|
Acquisitions, net of cash and cash equivalents acquired |
(533,623) |
(312,855) |
|
Proceeds from the sale of property, plant and equipment |
4,234 |
6,061 |
|
Other |
(4,649) |
(13,168) |
|
Net cash used in investing activities |
(726,630) |
(540,924) |
|
Financing activities: |
|||
Change in commercial paper and other short-term borrowings, net |
(267,490) |
629,891 |
|
Dividends paid to stockholders |
(284,297) |
(287,551) |
|
Repurchase of common stock, including accelerated share repurchase program |
— |
(585,000) |
|
Payments to settle employee tax obligations on exercise of share-based awards |
(12,137) |
(14,637) |
|
Other |
(4,132) |
(2,968) |
|
Net cash used in financing activities |
(568,056) |
(260,265) |
|
Effect of exchange rate changes on cash and cash equivalents |
(6,666) |
(9,171) |
|
Net increase (decrease) in cash and cash equivalents, including cash held for sale |
34,993 |
(4,636) |
|
Cash and cash equivalents at beginning of year |
380,868 |
385,504 |
|
Cash and cash equivalents, including cash held for sale at end of year |
$ 415,861 |
$ 380,868 |
|
Years Ended December 31, |
|||
2023 |
2022 |
||
Cash and cash equivalents |
$ 398,561 |
$ 380,868 |
|
Cash and cash equivalents held for sale |
17,300 |
— |
|
Cash and cash equivalents, including cash held for sale |
$ 415,861 |
$ 380,868 |
DOVER CORPORATION |
|||||||||||
QUARTERLY ADJUSTED SEGMENT EBITDA (NON-GAAP) |
|||||||||||
(unaudited)(in thousands) |
|||||||||||
Non-GAAP Reconciliations |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
ADJUSTED SEGMENT EBITDA |
|||||||||||
Engineered Products: |
|||||||||||
Segment earnings |
$ 84,275 |
$ 73,076 |
$ 101,610 |
$ 118,464 |
$ 377,425 |
$ 71,130 |
$ 81,671 |
$ 90,145 |
$ 103,573 |
$ 346,519 |
|
Other depreciation and amortization 1 |
7,070 |
7,300 |
7,306 |
6,397 |
28,073 |
7,274 |
6,799 |
6,819 |
6,853 |
27,745 |
|
Adjusted segment EBITDA 2 |
91,345 |
80,376 |
108,916 |
124,861 |
405,498 |
78,404 |
88,470 |
96,964 |
110,426 |
374,264 |
|
Adjusted segment EBITDA margin 2 |
18.4 % |
17.0 % |
21.6 % |
23.6 % |
20.2 % |
16.1 % |
17.2 % |
18.8 % |
21.0 % |
18.3 % |
|
Clean Energy & Fueling: |
|||||||||||
Segment earnings |
$ 73,605 |
$ 83,616 |
$ 92,483 |
$ 78,900 |
$ 328,604 |
$ 72,962 |
$ 99,034 |
$ 90,208 |
$ 90,789 |
$ 352,993 |
|
Other depreciation and amortization 1 |
7,046 |
7,541 |
7,686 |
7,844 |
30,117 |
8,466 |
6,533 |
6,893 |
6,923 |
28,815 |
|
Adjusted segment EBITDA 2 |
80,651 |
91,157 |
100,169 |
86,744 |
358,721 |
81,428 |
105,567 |
97,101 |
97,712 |
381,808 |
|
Adjusted segment EBITDA margin 2 |
18.7 % |
20.7 % |
21.5 % |
19.3 % |
20.1 % |
17.8 % |
21.4 % |
20.9 % |
21.1 % |
20.3 % |
|
Imaging & Identification: |
|||||||||||
Segment earnings |
$ 68,315 |
$ 61,336 |
$ 70,316 |
$ 72,545 |
$ 272,512 |
$ 58,598 |
$ 61,392 |
$ 74,477 |
$ 73,617 |
$ 268,084 |
|
Other depreciation and amortization 1 |
3,394 |
3,745 |
3,972 |
4,182 |
15,293 |
3,497 |
3,496 |
3,372 |
3,820 |
14,185 |
|
Adjusted segment EBITDA 2 |
71,709 |
65,081 |
74,288 |
76,727 |
287,805 |
62,095 |
64,888 |
77,849 |
77,437 |
282,269 |
|
Adjusted segment EBITDA margin 2 |
25.3 % |
23.9 % |
26.9 % |
26.9 % |
25.8 % |
22.8 % |
23.5 % |
27.6 % |
26.4 % |
25.1 % |
|
Pumps & Process Solutions: |
|||||||||||
Segment earnings |
$ 115,244 |
$ 129,337 |
$ 117,907 |
$ 121,917 |
$ 484,405 |
$ 146,617 |
$ 138,048 |
$ 128,573 |
$ 119,780 |
$ 533,018 |
|
Other depreciation and amortization 1 |
10,939 |
11,609 |
12,052 |
11,744 |
46,344 |
9,922 |
9,787 |
10,137 |
10,993 |
40,839 |
|
Adjusted segment EBITDA 2 |
126,183 |
140,946 |
129,959 |
133,661 |
530,749 |
156,539 |
147,835 |
138,710 |
130,773 |
573,857 |
|
Adjusted segment EBITDA margin 2 |
30.5 % |
30.3 % |
30.1 % |
30.0 % |
30.2 % |
36.0 % |
33.5 % |
32.0 % |
31.3 % |
33.2 % |
|
Climate & Sustainability Technologies: |
|||||||||||
Segment earnings |
$ 73,778 |
$ 76,074 |
$ 84,060 |
$ 71,468 |
$ 305,380 |
$ 53,609 |
$ 64,181 |
$ 75,190 |
$ 61,504 |
$ 254,484 |
|
Other depreciation and amortization 1 |
6,624 |
6,895 |
6,954 |
7,084 |
27,557 |
6,495 |
6,443 |
6,736 |
6,530 |
26,204 |
|
Adjusted segment EBITDA 2 |
80,402 |
82,969 |
91,014 |
78,552 |
332,937 |
60,104 |
70,624 |
81,926 |
68,034 |
280,688 |
|
Adjusted segment EBITDA margin 2 |
17.7 % |
18.5 % |
19.1 % |
19.7 % |
18.7 % |
15.1 % |
16.3 % |
17.7 % |
15.4 % |
16.2 % |
|
Total Segments: |
|||||||||||
Total segment earnings 2, 3 |
$ 415,217 |
$ 423,439 |
$ 466,376 |
$ 463,294 |
$ 1,768,326 |
$ 402,916 |
$ 444,326 |
$ 458,593 |
$ 449,263 |
$ 1,755,098 |
|
Other depreciation and amortization 1 |
35,073 |
37,090 |
37,970 |
37,251 |
147,384 |
35,654 |
33,058 |
33,957 |
35,119 |
137,788 |
|
Total Adjusted segment EBITDA 2 |
450,290 |
460,529 |
504,346 |
500,545 |
1,915,710 |
438,570 |
477,384 |
492,550 |
484,382 |
1,892,886 |
|
Total Adjusted segment EBITDA margin 2 |
21.7 % |
21.9 % |
23.4 % |
23.8 % |
22.7 % |
21.4 % |
22.1 % |
22.8 % |
22.6 % |
22.2 % |
|
1 Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs. |
|||||||||||
2 Refer to Non-GAAP Disclosures section for definition. |
|||||||||||
3 Refer to Quarterly Segment Information section for reconciliation of total segment earnings to net earnings. |
DOVER CORPORATION |
|||||||||||
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP) |
|||||||||||
(unaudited)(in thousands, except per share data*) |
|||||||||||
Non-GAAP Reconciliations |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
Adjusted net earnings: |
|||||||||||
Net earnings |
$ 228,574 |
$ 242,239 |
$ 289,753 |
$ 296,262 |
$ 1,056,828 |
$ 226,153 |
$ 289,618 |
$ 286,026 |
$ 263,579 |
$ 1,065,376 |
|
Purchase accounting expenses, pre-tax 1 |
42,679 |
40,200 |
40,320 |
41,744 |
164,943 |
53,286 |
47,019 |
40,526 |
40,272 |
181,103 |
|
Purchase accounting expenses, tax impact 2 |
(9,599) |
(9,012) |
(8,966) |
(9,143) |
(36,720) |
(12,538) |
(11,013) |
(9,494) |
(8,689) |
(41,734) |
|
Restructuring and other costs, pre-tax 3 |
14,053 |
18,143 |
12,327 |
19,150 |
63,673 |
10,552 |
7,944 |
8,613 |
11,881 |
38,990 |
|
Restructuring and other costs, tax impact 2 |
(2,990) |
(3,665) |
(2,556) |
(3,970) |
(13,181) |
(2,191) |
(1,803) |
(1,921) |
(2,311) |
(8,226) |
|
Disposition costs, pre-tax 4 |
— |
— |
— |
1,302 |
1,302 |
194 |
— |
— |
— |
194 |
|
Disposition costs, tax impact 2 |
— |
— |
— |
(270) |
(270) |
(27) |
— |
— |
— |
(27) |
|
Tax Cuts and Jobs Act 5 |
— |
— |
— |
— |
— |
— |
(22,579) |
— |
— |
(22,579) |
|
Adjusted net earnings |
$ 272,717 |
$ 287,905 |
$ 330,878 |
$ 345,075 |
$ 1,236,575 |
$ 275,429 |
$ 309,186 |
$ 323,750 |
$ 304,732 |
$ 1,213,097 |
|
Adjusted diluted net earnings per share: |
|||||||||||
Diluted net earnings per share |
$ 1.63 |
$ 1.72 |
$ 2.06 |
$ 2.11 |
$ 7.52 |
$ 1.56 |
$ 2.00 |
$ 2.00 |
$ 1.87 |
$ 7.42 |
|
Purchase accounting expenses, pre-tax 1 |
0.30 |
0.29 |
0.29 |
0.30 |
1.18 |
0.37 |
0.33 |
0.28 |
0.29 |
1.27 |
|
Purchase accounting expenses, tax impact 2 |
(0.07) |
(0.06) |
(0.06) |
(0.07) |
(0.26) |
(0.09) |
(0.08) |
(0.07) |
(0.06) |
(0.30) |
|
Restructuring and other costs, pre-tax 3 |
0.10 |
0.13 |
0.09 |
0.14 |
0.46 |
0.07 |
0.05 |
0.06 |
0.08 |
0.26 |
|
Restructuring and other costs, tax impact 2 |
(0.02) |
(0.03) |
(0.02) |
(0.03) |
(0.10) |
(0.02) |
(0.01) |
(0.01) |
(0.02) |
(0.06) |
|
Disposition costs, pre-tax 4 |
— |
— |
— |
0.01 |
0.01 |
— |
— |
— |
— |
— |
|
Disposition costs, tax impact 2 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
|
Tax Cuts and Jobs Act 5 |
— |
— |
— |
— |
— |
— |
(0.16) |
— |
— |
(0.16) |
|
Adjusted diluted net earnings per share |
$ 1.94 |
$ 2.05 |
$ 2.35 |
$ 2.45 |
$ 8.80 |
$ 1.90 |
$ 2.14 |
$ 2.26 |
$ 2.16 |
$ 8.45 |
|
1 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. Q1, Q2, and FY 2022 include $12,487, $7,158, and $19,869 of amortization of inventory step-up, respectively, primarily related to the Q4 2021 acquisitions within our Clean Energy & Fueling segment. |
|||||||||||
2 Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period. |
|||||||||||
3 Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges. Q3 and FY 2023 include $3,302 of non-cash asset impairment charges for our Climate & Sustainability Technologies segment. Q1 and FY 2022 include $5,457 of non-cash foreign currency translation losses reclassified to earnings included within restructuring and other costs and $2,117 related to write-off of assets due to an exit from certain Latin America countries for our Climate & Sustainability Technologies segment. |
|||||||||||
4 Q4 and FY 2023 disposition costs relate to the sale of De-Sta-Co which is expected to close in Q1 2024. Q1 and FY 2022 represents working capital adjustments related to the disposition of Unified Brands and the Race Winning Brands equity method investment in Q4 2021. |
|||||||||||
5 Q2 and FY 2022 represent a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act. |
|||||||||||
* Per share data and totals may be impacted by rounding. |
DOVER CORPORATION |
|||||||||||
QUARTERLY NET EARNINGS TO ADJUSTED SEGMENT EBITDA RECONCILIATION (NON-GAAP) |
|||||||||||
(unaudited)(in thousands) |
|||||||||||
Non-GAAP Reconciliations |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
Net earnings |
$ 228,574 |
$ 242,239 |
$ 289,753 |
$ 296,262 |
$ 1,056,828 |
$ 226,153 |
$ 289,618 |
$ 286,026 |
$ 263,579 |
$ 1,065,376 |
|
Provision for income taxes 1 |
57,716 |
57,784 |
64,709 |
32,969 |
213,178 |
49,550 |
45,738 |
67,007 |
59,834 |
222,129 |
|
Earnings before provision for income taxes |
286,290 |
300,023 |
354,462 |
329,231 |
1,270,006 |
275,703 |
335,356 |
353,033 |
323,413 |
1,287,505 |
|
Interest income |
(2,091) |
(2,653) |
(3,808) |
(4,944) |
(13,496) |
(775) |
(949) |
(1,244) |
(1,462) |
(4,430) |
|
Interest expense |
34,214 |
33,804 |
32,389 |
30,898 |
131,305 |
26,552 |
26,989 |
29,789 |
33,126 |
116,456 |
|
Corporate expense / other 2 |
40,072 |
33,922 |
30,686 |
45,913 |
150,593 |
37,404 |
27,967 |
27,876 |
42,033 |
135,280 |
|
Disposition costs 3 |
— |
— |
— |
1,302 |
1,302 |
194 |
— |
— |
— |
194 |
|
Restructuring and other costs 4 |
14,053 |
18,143 |
12,327 |
19,150 |
63,673 |
10,552 |
7,944 |
8,613 |
11,881 |
38,990 |
|
Purchase accounting expenses 5 |
42,679 |
40,200 |
40,320 |
41,744 |
164,943 |
53,286 |
47,019 |
40,526 |
40,272 |
181,103 |
|
Total segment earnings 6 |
415,217 |
423,439 |
466,376 |
463,294 |
1,768,326 |
402,916 |
444,326 |
458,593 |
449,263 |
1,755,098 |
|
Add: Other depreciation and amortization 7 |
35,073 |
37,090 |
37,970 |
37,251 |
147,384 |
35,654 |
33,058 |
33,957 |
35,119 |
137,788 |
|
Total adjusted segment EBITDA 6 |
$ 450,290 |
$ 460,529 |
$ 504,346 |
$ 500,545 |
$ 1,915,710 |
$ 438,570 |
$ 477,384 |
$ 492,550 |
$ 484,382 |
$ 1,892,886 |
|
1 Q4 and FY 2023 include the net income tax benefit of internal reorganizations executed in 2023. Q2 and FY 2022 include a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act. |
|||||||||||
2 Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services and digital overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters. |
|||||||||||
3 Q4 and FY 2023 disposition costs relate to the sale of De-Sta-Co which is expected to close in Q1 2024. Q1 and FY 2022 represents working capital adjustments related to the disposition of Unified Brands and the Race Winning Brands equity method investment in Q4 2021. |
|||||||||||
4 Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges. |
|||||||||||
5 Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. |
|||||||||||
6 Refer to Non-GAAP Disclosures section for definition. |
|||||||||||
7 Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs. |
DOVER CORPORATION |
|||||||||
REVENUE GROWTH FACTORS AND ADJUSTED EPS GUIDANCE RECONCILIATIONS (NON-GAAP) |
|||||||||
(unaudited)(in thousands, except per share data*) |
|||||||||
Non-GAAP Reconciliations |
|||||||||
Revenue Growth Factors |
|||||||||
2023 |
|||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Q4 YTD |
|||||
Organic |
|||||||||
Engineered Products |
3.4 % |
(7.7) % |
(3.0) % |
— % |
(1.9) % |
||||
Clean Energy & Fueling |
(2.6) % |
(9.3) % |
(0.2) % |
(3.5) % |
(4.0) % |
||||
Imaging & Identification |
8.2 % |
0.3 % |
(3.6) % |
(3.5) % |
0.2 % |
||||
Pumps & Process Solutions |
(7.1) % |
0.9 % |
(7.3) % |
0.5 % |
(3.3) % |
||||
Climate & Sustainability Technologies |
16.2 % |
4.0 % |
1.8 % |
(10.9) % |
2.4 % |
||||
Total Organic |
2.9 % |
(3.0) % |
(2.4) % |
(3.4) % |
(1.5) % |
||||
Acquisitions |
0.9 % |
0.9 % |
1.0 % |
0.9 % |
0.9 % |
||||
Currency translation |
(2.5) % |
(0.6) % |
1.2 % |
0.9 % |
(0.2) % |
||||
Total* |
1.3 % |
(2.7) % |
(0.2) % |
(1.6) % |
(0.8) % |
||||
* Totals may be impacted by rounding. |
|||||||||
2023 |
|||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Q4 YTD |
|||||
Organic |
|||||||||
United States |
2.6 % |
(8.6) % |
(7.3) % |
1.7 % |
(3.0) % |
||||
Other Americas |
16.8 % |
13.9 % |
13.1 % |
(22.5) % |
3.4 % |
||||
Europe |
(0.3) % |
(0.9) % |
(5.2) % |
(16.1) % |
(5.7) % |
||||
Asia |
(3.9) % |
1.9 % |
(3.4) % |
4.9 % |
(0.2) % |
||||
Other |
20.8 % |
33.0 % |
72.8 % |
26.8 % |
38.5 % |
||||
Total Organic |
2.9 % |
(3.0) % |
(2.4) % |
(3.4) % |
(1.5) % |
||||
Acquisitions |
0.9 % |
0.9 % |
1.0 % |
0.9 % |
0.9 % |
||||
Currency translation |
(2.5) % |
(0.6) % |
1.2 % |
0.9 % |
(0.2) % |
||||
Total* |
1.3 % |
(2.7) % |
(0.2) % |
(1.6) % |
(0.8) % |
||||
* Totals may be impacted by rounding. |
Adjusted EPS Guidance Reconciliation |
|||
2023 Actual |
2024 Guidance |
||
Adjusted net earnings per share*: |
|||
Net earnings (GAAP) |
$ 7.52 |
$7.90 - $8.10 |
|
Purchase accounting expenses, net |
0.92 |
0.98 |
|
Restructuring and other costs, net |
0.36 |
0.07 |
|
Adjusted net earnings per share (Non-GAAP) |
$ 8.80 |
$8.95 - $9.15 |
|
* Per share data and totals may be impacted by rounding. |
DOVER CORPORATION |
|||||||||||
PERFORMANCE MEASURES |
|||||||||||
(unaudited)(in thousands) |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
BOOKINGS |
|||||||||||
Engineered Products |
$ 536,472 |
$ 489,131 |
$ 576,641 |
$ 494,528 |
$ 2,096,772 |
$ 541,035 |
$ 452,668 |
$ 512,374 |
$ 498,249 |
$ 2,004,326 |
|
Clean Energy & Fueling |
454,526 |
440,137 |
449,663 |
401,195 |
1,745,521 |
501,491 |
487,861 |
432,259 |
399,414 |
1,821,025 |
|
Imaging & Identification |
290,712 |
262,092 |
271,113 |
297,312 |
1,121,229 |
307,104 |
292,136 |
281,789 |
273,170 |
1,154,199 |
|
Pumps & Process Solutions |
464,297 |
394,317 |
363,111 |
455,390 |
1,677,115 |
459,790 |
471,693 |
415,253 |
362,468 |
1,709,204 |
|
Climate & Sustainability Technologies1 |
371,643 |
310,911 |
340,474 |
325,625 |
1,348,653 |
430,465 |
458,181 |
404,150 |
377,120 |
1,669,916 |
|
Intersegment eliminations |
(1,530) |
(1,918) |
(849) |
(2,125) |
(6,422) |
(2,295) |
(1,207) |
(423) |
(1,391) |
(5,316) |
|
Total consolidated bookings |
$ 2,116,120 |
$ 1,894,670 |
$ 2,000,153 |
$ 1,971,925 |
$ 7,982,868 |
$ 2,237,590 |
$ 2,161,332 |
$ 2,045,402 |
$ 1,909,030 |
$ 8,353,354 |
|
1 For comparability, prior periods were revised to exclude non-binding orders and previously disclosed de-bookings. Refer to Performance Measures Definitions section. |
2023 |
|||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Q4 YTD |
|||||
BOOKINGS GROWTH FACTORS |
|||||||||
Organic |
|||||||||
Engineered Products |
0.9 % |
8.4 % |
11.6 % |
(1.6) % |
4.7 % |
||||
Clean Energy & Fueling |
(6.1) % |
(8.4) % |
3.5 % |
(0.1) % |
(3.1) % |
||||
Imaging & Identification |
(1.8) % |
(8.5) % |
(5.4) % |
7.7 % |
(2.1) % |
||||
Pumps & Process Solutions |
(1.2) % |
(19.4) % |
(15.6) % |
22.6 % |
(4.7) % |
||||
Climate & Sustainability Technologies1 |
(11.6) % |
(31.5) % |
(16.8) % |
(14.8) % |
(19.1) % |
||||
Total Organic |
(3.9) % |
(12.2) % |
(3.5) % |
2.0 % |
(4.6) % |
||||
Acquisitions |
1.0 % |
0.7 % |
0.3 % |
0.4 % |
0.6 % |
||||
Currency translation |
(2.5) % |
(0.8) % |
1.0 % |
0.9 % |
(0.4) % |
||||
Total* |
(5.4) % |
(12.3) % |
(2.2) % |
3.3 % |
(4.4) % |
||||
* Totals may be impacted by rounding. |
|||||||||
1 For comparability, prior periods were revised to exclude non-binding orders and previously disclosed de-bookings. Refer to Performance Measures Definitions section. |
ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2023
(unaudited)(amounts in thousands except share data and where otherwise indicated)
During the fourth quarter of 2023, the Company completed the acquisition of FW Murphy Production Controls, LLC, within the Pumps & Process Solutions segment for $526.5 million, subject to customary post-closing adjustments.
For the full year 2023, the Company acquired two businesses in separate transactions for total consideration of $535.3 million, net of cash acquired and including contingent consideration. The businesses were acquired to complement and expand upon existing operations within the Pumps & Process Solutions and Climate & Sustainability Technologies segments. The purchase price allocations for these acquisitions are preliminary and subject to change during the measurement period.
On October 11, 2023 the Company entered into a definitive agreement to sell De-Sta-Co, an operating company within the Engineered Products segment, for approximately $680.0 million enterprise value, subject to customary post-closing adjustments. De-Sta-Co's assets and liabilities are classified as held for sale in the condensed consolidated balance sheets as of December 31, 2023. The transaction is expected to close in Q1 2024, subject to customary closing conditions, including receipt of regulatory approvals.
During the fourth quarter and year ended December 31, 2023, restructuring and other costs (benefits) included restructuring charges of $16.6 million and $50.4 million, respectively, and other costs of $2.5 million and $13.2 million, respectively. The restructuring expenses incurred during the year ended December 31, 2023 were primarily related to headcount reductions and exit costs in the Clean Energy & Fueling, Engineered Products and Pumps & Process Solutions segments. These restructuring programs were initiated in 2022 and 2023 and were undertaken in light of current market conditions. Other costs (benefits) were primarily due to an asset impairment in our Climate & Sustainability Technologies segment and product line rationalization and footprint reduction in our Clean Energy & Fueling segment.
($ in millions) |
2023 |
2022 |
|||||
Q4 |
FY |
Q4 |
FY |
||||
Engineered Products |
$ 3.5 |
$ 9.8 |
$ 0.5 |
$ 6.5 |
|||
Clean Energy & Fueling |
5.6 |
24.7 |
4.8 |
9.6 |
|||
Imaging & Identification |
4.8 |
7.1 |
2.9 |
6.4 |
|||
Pumps & Process Solutions |
1.5 |
7.9 |
2.0 |
4.7 |
|||
Climate & Sustainability Technologies |
2.1 |
9.3 |
0.9 |
9.3 |
|||
Corporate |
1.6 |
4.9 |
0.8 |
2.6 |
|||
Total* |
$ 19.2 |
$ 63.7 |
$ 11.9 |
$ 39.0 |
|||
* Totals may be impacted by rounding. |
The effective tax rate was 10.0% and 18.5% for the fourth quarters of 2023 and 2022, respectively. On a full year basis, the effective tax rate for 2023 and 2022 was 16.8% and 17.3%, respectively. The 2023 tax rate was primarily driven by the release of a net valuation allowance against non-U.S. tax loss carryforwards mainly related to an internal reorganization, partially offset by an accrual of withholding taxes on current and future repatriation of certain foreign earnings. The 2022 tax rate was primarily driven by favorable audit resolutions, including a reduction to income taxes previously recorded related to the Tax Cut and Jobs Act.
ADDITIONAL INFORMATION (CONTINUED)
FOURTH QUARTER AND FULL YEAR 2023
(unaudited)(amounts in thousands except share data and where otherwise indicated)
The following table provides a reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:
Net Debt to Net Capitalization Ratio (Non-GAAP) |
December 31, 2023 |
December 31, 2022 |
||
Commercial paper |
$ 467,600 |
$ 734,936 |
||
Other |
682 |
836 |
||
Short-term borrowings |
$ 468,282 |
$ 735,772 |
||
Long-term debt |
2,991,759 |
2,942,513 |
||
Total debt |
3,460,041 |
3,678,285 |
||
Less: Cash and cash equivalents, including cash held for sale |
(415,861) |
(380,868) |
||
Net debt |
3,044,180 |
3,297,417 |
||
Add: Stockholders' equity |
5,106,605 |
4,286,366 |
||
Net capitalization |
$ 8,150,785 |
$ 7,583,783 |
||
Net debt to net capitalization |
37.3 % |
43.5 % |
Quarterly Cash Flow |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
Net Cash Flows Provided By (Used In): |
|||||||||||
Operating activities |
$ 241,284 |
$ 195,254 |
$ 383,457 |
$ 516,350 |
$ 1,336,345 |
$ 23,683 |
$ 178,773 |
$ 264,625 |
$ 338,643 |
$ 805,724 |
|
Investing activities |
(43,556) |
(42,454) |
(50,243) |
(590,377) |
(726,630) |
(46,963) |
(68,890) |
(286,208) |
(138,863) |
(540,924) |
|
Financing activities |
(306,565) |
(137,924) |
(312,716) |
189,149 |
(568,056) |
(75,204) |
120,469 |
(178,844) |
(126,686) |
(260,265) |
Quarterly Free Cash Flow (Non-GAAP) |
|||||||||||
2023 |
2022 |
||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
FY 2023 |
Q1 |
Q2 |
Q3 |
Q4 |
FY 2022 |
||
Cash flow from operating activities |
$ 241,284 |
$ 195,254 |
$ 383,457 |
$ 516,350 |
$ 1,336,345 |
$ 23,683 |
$ 178,773 |
$ 264,625 |
$ 338,643 |
$ 805,724 |
|
Less: Capital expenditures |
(48,375) |
(40,079) |
(43,128) |
(61,010) |
(192,592) |
(50,381) |
(50,196) |
(65,462) |
(54,923) |
(220,962) |
|
Free cash flow |
$ 192,909 |
$ 155,175 |
$ 340,329 |
$ 455,340 |
$ 1,143,753 |
$ (26,698) |
$ 128,577 |
$ 199,163 |
$ 283,720 |
$ 584,762 |
|
Cash flow from operating |
11.6 % |
9.3 % |
17.8 % |
24.5 % |
15.8 % |
1.2 % |
8.3 % |
12.3 % |
15.8 % |
9.5 % |
|
Cash flow from operating |
88.5 % |
67.8 % |
115.9 % |
149.6 % |
108.1 % |
8.6 % |
57.8 % |
81.7 % |
111.1 % |
66.4 % |
|
Free cash flow as a |
9.3 % |
7.4 % |
15.8 % |
21.6 % |
13.6 % |
(1.3) % |
6.0 % |
9.2 % |
13.3 % |
6.9 % |
|
Free cash flow as a |
70.7 % |
53.9 % |
102.9 % |
132.0 % |
92.5 % |
(9.7) % |
41.6 % |
61.5 % |
93.1 % |
48.2 % |
|
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 net earnings, adjusted diluted net earnings per share, total segment earnings, total segment earnings margin, adjusted segment EBITDA, adjusted segment EBITDA margin, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of adjusted net earnings, net debt, net capitalization, net debt to net capitalization ratio, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted net earnings per 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 net earnings represents net earnings adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, disposition costs and gain/loss on dispositions. Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. We exclude after-tax purchase accounting expenses because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. While we have a history of acquisition activity, our acquisitions do not happen in a predictive cycle. Exclusion of purchase accounting expenses facilitates more consistent comparisons of operating results over time. We believe it is important to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or management believes they are not indicative of the Company's ongoing operating costs or gains in a given period.
Adjusted diluted net earnings per share or adjusted earnings per share represent diluted EPS adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, disposition costs and gain/loss on dispositions.
Total segment earnings is defined as the sum of earnings before purchase accounting expenses, restructuring and other costs/benefits, disposition costs, gain/loss on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes for all segments. Total segment earnings margin is defined as total segment earnings divided by revenue.
Adjusted segment EBITDA is defined as segment earnings plus other depreciation and amortization expense, which relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs/benefits. Adjusted segment EBITDA margin is defined as adjusted segment EBITDA divided by revenue.
Management believes the non-GAAP measures above are useful to investors to better understand the Company's ongoing profitability as they will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.
Net debt represents total debt minus cash and cash equivalents, including cash held for sale. Net capitalization represents net debt plus stockholders' equity. Net debt to net capitalization ratio is net debt divided by net capitalization. Net debt to net capitalization is helpful in evaluating our capital structure and the amount of leverage we employ.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of adjusted net earnings equals free cash flow divided by adjusted net earnings. Management believes that free cash flow and free cash flow ratios are important measures of liquidity because they provide 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 and dispositions, provides a useful comparison of our revenue and trends between periods. We do not provide a reconciliation of forward-looking organic revenue to the most directly comparable GAAP financial measure pursuant to the exception provided in Item 10(e)(1)(i)(B) of Regulation S-K because we are not able to provide a meaningful or accurate compilation of reconciling items. This is due to the inherent difficulty in accurately forecasting the timing and amounts of the items that would be excluded from the most directly comparable GAAP financial measure or are out of our control. For the same reasons, we are unable to address the probable significance of unavailable information which may be material.
Bookings represent total orders received from customers in the current reporting period and now exclude de-bookings. This metric is an important measure of performance and an indicator of order trends.
Organic bookings represent bookings excluding the impact of foreign currency exchange rates and the impact of acquisitions and dispositions. This metric is an important measure of performance and an indicator of order trends.
We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.
Investor Contact: |
Media Contact: |
Jack Dickens |
Adrian Sakowicz |
Senior Director - Investor Relations |
Vice President - Communications |
(630) 743-2566 |
(630) 743-5039 |
SOURCE Dover
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