Dover Reports Second Quarter 2020 Results; Re-Initiates Full Year Guidance

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Jul 22, 2020, 06:30 ET

DOWNERS GROVE, Ill., July 22, 2020 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the second quarter ended June 30, 2020.

	Three Months Ended June 30,						Six Months Ended June 30,
($ in millions, except per share data)	2020		2019		% Change		2020		2019		% Change
U.S. GAAP
Revenue	$	1,499	$	1,811	(17)	%	$	3,155	$	3,535	(11)	%
Net earnings¹	125		198		(37)	%	301		304		(1)	%
Diluted EPS	0.86		1.35		(36)	%	2.07		2.07		—	%

Non-GAAP
Organic revenue change					(16)	%					(10)	%
Adjusted net earnings ²	164		229		(28)	%	368		412		(11)	%
Adjusted diluted EPS	1.13		1.56		(28)	%	2.53		2.80		(10)	%

¹ Q2 2020 and 2019 net earnings include rightsizing and other costs of $13.4 million and $5.1 million, respectively. Q2 2020 also includes a $0.6 million expense related to the sale of AMS Chino. Q2 year-to-date 2020 and 2019 net earnings include rightsizing and other costs of $19.6 million and $8.2 million, respectively. Q2 year-to-date 2020 also includes a $4.4 million non-cash gain on the sale of AMS Chino, and year-to-date 2019 includes a $46.9 million non-cash loss on assets held for sale related to Finder.

² Q2 2020 and 2019 adjusted net earnings exclude after tax acquisition-related amortization costs of $25.7 million and $26.2 million, respectively, and rightsizing and other costs of $13.4 million and $5.1 million, respectively. Q2 2020 also excludes a $0.6 million expense related to the sale of AMS Chino. Q2 year-to-date 2020 and 2019 adjusted net earnings exclude acquisition-related amortization costs of $51.3 million and $52.9 million, respectively, and rightsizing and other costs of $19.6 million and $8.2 million, respectively. Q2 year-to-date 2020 also excludes a $4.4 million non-cash gain on the sale of AMS Chino, and year-to-date 2019 excludes a $46.9 million non-cash loss on assets held for sale related to Finder.

For the quarter ended June 30, 2020, Dover generated revenue of $1.5 billion, a decline of 17% (-16% organic) compared to the second quarter of the prior year. GAAP net earnings of $125 million decreased 37%, and GAAP diluted EPS of $0.86 was down 36%. On an adjusted basis, net earnings of $164 million declined 28%, and adjusted diluted EPS of $1.13 was down 28% versus the comparable quarter of the prior year.

For the six months ended June 30, 2020, Dover generated revenue of $3.2 billion, a decline of 11% (-10% organic) compared to the first six months of the prior year. GAAP net earnings of $301 million decreased 1%, and GAAP diluted EPS of $2.07 was flat year-over-year. On an adjusted basis, net earnings of $368 million declined 11%, and adjusted diluted EPS of $2.53 was down 10% versus the comparable quarter of the prior year.

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, "We are proud of our work and results in the second quarter. Economic uncertainty and operational disruption caused by the COVID-19 pandemic slowed activity across many markets and made the operating environment undeniably challenging. Our businesses have navigated the quarter well, as we focused on what was and remains within our control: diligently managing our costs and cash flow, providing a safe working environment for our associates and supporting our customers with the critical products they needed to keep their essential operations running.

"As we expected, activity declined across a majority of the markets we serve, albeit the impact varied widely across our diverse portfolio with many businesses proving their profitability and cash flow resilience in challenging conditions. Demand conditions in textile printing, foodservice, below-ground fueling, food retail and automotive aftermarket were particularly challenged, partially offset by relative resilience in biopharma, aerospace & defense, heat exchangers and marking & coding. We remain positioned well for the second half with a higher backlog compared to this time last year, driven by our longer cycle businesses and sequential intra-quarter improvement in many shorter cycle businesses.

"Global lockdowns, travel restrictions, proactive production curtailments and reduced volumes created a challenging operating environment in the second quarter, but our cost controls and continued execution of our multi-year productivity program resulted in a satisfactory decremental margin performance, positioning us well to reach or exceed our annual conversion margin target.

"Looking forward, the demand outlook for the remainder of the year remains uncertain, with activity across most markets improving but not back to business-as-usual. As a result of our improved demand visibility into the third quarter, and our solid margin performance year-to-date, we are making the decision to reinstate our annual guidance, though with a wider range than usual for the mid-year reflecting the fluidity of market conditions. We retain additional flexibility to adjust our cost base if macroeconomic conditions in the second half of the year necessitate a response."

FULL YEAR 2020 GUIDANCE REINSTATED:

In 2020, Dover expects to generate GAAP EPS in the range of $4.16 to $4.41 ($5.00 to $5.25 on an adjusted basis). A full reconciliation between forecasted GAAP and forecasted adjusted EPS is included as an exhibit herein.

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its second quarter and year-to-date 2020 results as well as updated 2020 guidance at 9:00 A.M. Eastern Time (8:00 A.M. Central Time) on Wednesday, July 22, 2020. 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 second quarter 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 approximately $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions 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 over 23,000 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, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, 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, 2019, 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 - SECOND QUARTER 2020 DOVER CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)(in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenue	$	1,499,175	$	1,810,706	$	3,155,114	$	3,535,463
Cost of goods and services	947,577		1,138,113		1,991,273		2,239,328
Gross profit	551,598		672,593		1,163,841		1,296,135
Selling, general, and administrative expenses	366,740		396,634		753,681		805,100
Loss on assets held for sale	—		—		—		46,946
Operating earnings	184,858		275,959		410,160		444,089
Interest expense	28,711		31,754		55,979		63,562
Interest income	(728)		(945)		(1,911)		(1,835)
Loss (gain) on sale of a business	781		—		(5,770)		—
Other income, net	(735)		(4,589)		(8,467)		(5,695)
Earnings before provision for income taxes	156,829		249,739		370,329		388,057
Provision for income taxes	32,063		51,654		69,284		84,267
Net earnings	$	124,766	$	198,085	$	301,045	$	303,790

Net earnings per share:
Basic	$	0.87	$	1.36	$	2.09	$	2.09
Diluted	$	0.86	$	1.35	$	2.07	$	2.07
Weighted average shares outstanding:
Basic	143,955		145,366		144,107		145,227
Diluted	144,995		147,179		145,359		147,041

Dividends paid per common share	$	0.49	$	0.48	$	0.98	$	0.96

* Per share data may be impacted by rounding.

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

	2020						2019
	Q1		Q2		Q2 YTD		Q1		Q2		Q2 YTD		Q3		Q4		FY 2019
REVENUE
Engineered Products	$	408,160	$	342,380	$	750,540	$	418,851	$	429,928	$	848,779	$	426,689	$	422,089	$	1,697,557
Fueling Solutions	359,982		326,495		686,477		373,050		390,586		763,636		411,769		444,772		1,620,177
Imaging & Identification	256,765		227,977		484,742		268,354		266,588		534,942		275,109		274,420		1,084,471
Pumps & Process Solutions	319,536		309,095		628,631		330,219		338,924		669,143		341,337		328,048		1,338,528
Refrigeration & Food Equipment	311,913		293,527		605,440		334,643		385,474		720,117		370,335		306,165		1,396,617
Intra-segment eliminations	(417)		(299)		(716)		(360)		(794)		(1,154)		106		95		(953)
Total consolidated revenue	$	1,655,939	$1,499,175		$3,155,114		$	1,724,757	$	1,810,706	$	3,535,463	$	1,825,345	$	1,775,589	$	7,136,397

NET EARNINGS
Segment Earnings:
Engineered Products	$	69,094	$	47,702	$	116,796	$	67,119	$	77,129	$	144,248	$	74,367	$	73,233	$	291,848
Fueling Solutions	53,498		47,214		100,712		37,230		52,637		89,867		68,069		73,937		231,873
Imaging & Identification	51,482		38,046		89,528		55,955		54,641		110,596		61,655		57,233		229,484
Pumps & Process Solutions ¹	66,079		67,702		133,781		14,991		76,278		91,269		77,433		71,379		240,081
Refrigeration & Food Equipment ²	23,529		11,459		34,988		24,807		44,375		69,182		35,211		14,439		118,832
Total segment earnings (EBIT)	263,682		212,123		475,805		200,102		305,060		505,162		316,735		290,221		1,112,118
Corporate expense / other ³	24,097		27,311		51,408		30,866		24,512		55,378		28,658		63,781		147,817
Interest expense	27,268		28,711		55,979		31,808		31,754		63,562		31,410		30,846		125,818
Interest income	(1,183)		(728)		(1,911)		(890)		(945)		(1,835)		(1,263)		(1,428)		(4,526)
Earnings before provision for income taxes	213,500		156,829		370,329		138,318		249,739		388,057		257,930		197,022		843,009
Provision for income taxes	37,221		32,063		69,284		32,613		51,654		84,267		51,924		28,900		165,091
Net earnings	$	176,279	$	124,766	$	301,045	$	105,705	$	198,085	$	303,790	$	206,006	$	168,122	$	677,918

SEGMENT MARGIN
Engineered Products	16.9 %		13.9 %		15.6 %		16.0 %		17.9 %		17.0 %		17.4 %		17.4 %		17.2 %
Fueling Solutions	14.9 %		14.5 %		14.7 %		10.0 %		13.5 %		11.8 %		16.5 %		16.6 %		14.3 %
Imaging & Identification	20.1 %		16.7 %		18.5 %		20.9 %		20.5 %		20.7 %		22.4 %		20.9 %		21.2 %
Pumps & Process Solutions ¹	20.7 %		21.9 %		21.3 %		4.5 %		22.5 %		13.6 %		22.7 %		21.8 %		17.9 %
Refrigeration & Food Equipment ²	7.5 %		3.9 %		5.8 %		7.4 %		11.5 %		9.6 %		9.5 %		4.7 %		8.5 %
Total segment operating margin	15.9 %		14.1 %		15.1 %		11.6 %		16.8 %		14.3 %		17.4 %		16.3 %		15.6 %

DEPRECIATION AND AMORTIZATION EXPENSE
Engineered Products	$	10,122	$	9,722	$	19,844	$	10,359	$	10,452	$	20,811	$	10,095	$	10,126	$	41,032
Fueling Solutions	18,339		17,968		36,307		17,879		18,945		36,824		18,744		19,477		75,045
Imaging & Identification	8,769		9,224		17,993		7,435		7,413		14,848		7,360		8,322		30,530
Pumps & Process Solutions	18,336		17,572		35,908		17,548		16,201		33,749		16,018		17,817		67,584
Refrigeration & Food Equipment	11,548		11,421		22,969		13,011		12,777		25,788		13,047		12,525		51,360
Corporate	1,638		1,696		3,334		1,506		1,981		3,487		1,523		1,726		6,736
Total depreciation and amortization expense	$	68,752	$	67,603	$	136,355	$	67,738	$	67,769	$	135,507	$	66,787	$	69,993	$	272,287

¹ Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder Pompe S.r.l.
² Q1, Q2, and Q2 YTD includes a $6,551 gain, a $781 expense and a $5,770 net gain on the sale of the Chino, California branch of The AMS Group ("AMS Chino"), respectively. Q2 and Q2 YTD also include a $3,640 write-off of assets.
³ Q4 and FY 2019 include a $23,543 loss on early extinguishment of debt.

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

Earnings Per Share
	2020						2019
	Q1		Q2		Q2 YTD		Q1		Q2		Q2 YTD		Q3		Q4		FY 2019
Net earnings per share:
Basic	$	1.22	$	0.87	$	2.09	$	0.73	$	1.36	$	2.09	$	1.42	$	1.16	$	4.67
Diluted	$	1.21	$	0.86	$	2.07	$	0.72	$	1.35	$	2.07	$	1.40	$	1.15	$	4.61

Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings	$	176,279	$	124,766	$	301,045	$	105,705	$	198,085	$	303,790	$	206,006	$	168,122	$	677,918

Weighted average shares outstanding:
Basic	144,259		143,955		144,107		145,087		145,366		145,227		145,372		144,966		145,198
Diluted	145,782		144,995		145,359		146,911		147,179		147,041		147,051		146,790		146,992

* Per share data may be impacted by rounding.

DOVER CORPORATION QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP) (unaudited)(in thousands, except per share data*)

Non-GAAP Reconciliations
	2020						2019
	Q1		Q2		Q2 YTD		Q1		Q2		Q2 YTD		Q3		Q4		FY 2019
Adjusted net earnings:
Net earnings	$	176,279	$	124,766	$	301,045	$	105,705	$	198,085	$	303,790	$	206,006	$	168,122	$	677,918
Acquisition-related amortization, pre- tax ¹	34,062		34,101		68,163		35,635		34,997		70,632		34,244		33,460		138,336
Acquisition-related amortization, tax impact ²	(8,411)		(8,451)		(16,862)		(8,964)		(8,777)		(17,741)		(8,624)		(8,403)		(34,768)
Rightsizing and other costs, pre-tax ³	7,859		16,840		24,699		3,963		6,457		10,420		3,807		17,926		32,153
Rightsizing and other costs, tax impact ²	(1,605)		(3,452)		(5,057)		(861)		(1,377)		(2,238)		(806)		(3,745)		(6,789)
Loss on extinguishment of debt, pre- tax ⁴	—		—		—		—		—		—		—		23,543		23,543
Loss on extinguishment of debt, tax impact ²	—		—		—		—		—		—		—		(5,163)		(5,163)
Loss on assets held for sale ⁵	—		—		—		46,946		—		46,946		—		—		46,946
(Gain) loss on disposition, pre-tax ⁶	(6,551)		781		(5,770)		—		—		—		—		—		—
(Gain) loss on disposition, tax-impact ²	1,592		(190)		1,402		—		—		—		—		—		—
Adjusted net earnings	$	203,225	$	164,395	$	367,620	$	182,424	$	229,385	$	411,809	$	234,627	$	225,740	$	872,176

Adjusted diluted net earnings per share:
Diluted net earnings per share	$	1.21	$	0.86	$	2.07	$	0.72	$	1.35	$	2.07	$	1.40	$	1.15	$	4.61
Acquisition-related amortization, pre- tax ¹	0.23		0.24		0.47		0.24		0.24		0.48		0.23		0.23		0.94
Acquisition-related amortization, tax impact ²	(0.06)		(0.06)		(0.12)		(0.06)		(0.06)		(0.12)		(0.06)		(0.06)		(0.24)
Rightsizing and other costs, pre-tax ³	0.05		0.12		0.17		0.03		0.04		0.07		0.03		0.12		0.22
Rightsizing and other costs, tax impact ²	(0.01)		(0.02)		(0.03)		(0.01)		(0.01)		(0.02)		(0.01)		(0.03)		(0.06)
Loss on extinguishment of debt, pre- tax ⁴	—		—		—		—		—		—		—		0.16		0.16
Loss on extinguishment of debt, tax impact ²	—		—		—		—		—		—		—		(0.04)		(0.04)
Loss on assets held for sale ⁵	—		—		—		0.32		—		0.32		—		—		0.32
(Gain) loss on disposition, pre-tax ⁶	(0.04)		—		(0.04)		—		—		—		—		—		—
(Gain) loss on disposition, tax-impact ²	0.01		—		0.01		—		—		—		—		—		—
Adjusted diluted net earnings per share	$	1.39	$	1.13	$	2.53	$	1.24	$	1.56	$	2.80	$	1.60	$	1.54	$	5.93

¹ Includes amortization on acquisition-related intangible assets and inventory step-up.
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 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges.
⁴ Represents a loss on early extinguishment of €300,000 2.125% notes due 2020 and $450,000 4.30% notes due 2021.
⁵ Represents a loss on assets held for sale of Finder Pompe S.r.l. ("Finder"). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
⁶ Represents a (gain) loss on the disposition of AMS Chino within the Refrigeration & Food Equipment segment.

* Per share data and totals may be impacted by rounding.

DOVER CORPORATION QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP) (unaudited)(in thousands)

Non-GAAP Reconciliations
	2020									2019
	Q1			Q2			Q2 YTD			Q1			Q2			Q2 YTD			Q3			Q4			FY 2019
ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA
Engineered Products:
Segment earnings (EBIT)	$	69,094		$	47,702		$	116,796		$	67,119		$	77,129		$	144,248		$	74,367		$	73,233		$	291,848
Rightsizing and other costs	361			4,169			4,530			80			1,125			1,205			590			1,355			3,150
Adjusted EBIT - Segment	69,455			51,871			121,326			67,199			78,254			145,453			74,957			74,588			294,998
Adjusted EBIT %	17.0		%	15.2		%	16.2		%	16.0		%	18.2		%	17.1		%	17.6		%	17.7		%	17.4		%
Adjusted D&A ²	10,122			9,722			19,844			10,359			9,855			20,214			10,095			10,126			40,435
Adjusted EBITDA - segment	$	79,577		$	61,593		$	141,170		$	77,558		$	88,109		$	165,667		$	85,052		$	84,714		$	335,433
Adjusted EBITDA %	19.5		%	18.0		%	18.8		%	18.5		%	20.5		%	19.5		%	19.9		%	20.1		%	19.8		%
Fueling Solutions:
Segment earnings (EBIT)	$	53,498		$	47,214		$	100,712		$	37,230		$	52,637		$	89,867		$	68,069		$	73,937		$	231,873
Rightsizing and other costs	1,493			868			2,361			752			1,768			2,520			811			1,554			4,885
Adjusted EBIT - Segment	54,991			48,082			103,073			37,982			54,405			92,387			68,880			75,491			236,758
Adjusted EBIT %	15.3		%	14.7		%	15.0		%	10.2		%	13.9		%	12.1		%	16.7		%	17.0		%	14.6		%
Adjusted D&A ²	18,339			17,783			36,122			17,879			18,945			36,824			18,744			19,477			75,045
Adjusted EBITDA - segment	$	73,330		$	65,865		$	139,195		$	55,861		$	73,350		$	129,211		$	87,624		$	94,968		$	311,803
Adjusted EBITDA %	20.4		%	20.2		%	20.3		%	15.0		%	18.8		%	16.9		%	21.3		%	21.4		%	19.2		%
Imaging & Identification:
Segment earnings (EBIT)	$	51,482		$	38,046		$	89,528		$	55,955		$	54,641		$	110,596		$	61,655		$	57,233		$	229,484
Rightsizing and other costs	264			(527)			(263)			389			1,268			1,657			301			4,392			6,350
Adjusted EBIT - Segment	51,746			37,519			89,265			56,344			55,909			112,253			61,956			61,625			235,834
Adjusted EBIT %	20.2		%	16.5		%	18.4		%	21.0		%	21.0		%	21.0		%	22.5		%	22.5		%	21.7		%
Adjusted D&A ²	8,769			9,224			17,993			7,336			7,317			14,653			7,286			7,892			29,831
Adjusted EBITDA - segment	$	60,515		$	46,743		$	107,258		$	63,680		$	63,226		$	126,906		$	69,242		$	69,517		$	265,665
Adjusted EBITDA %	23.6		%	20.5		%	22.1		%	23.7		%	23.7		%	23.7		%	25.2		%	25.3		%	24.5		%
Pumps & Process Solutions:
Segment earnings (EBIT)	$	66,079		$	67,702		$	133,781		$	14,991		$	76,278		$	91,269		$	77,433		$	71,379		$	240,081
Rightsizing and other costs	3,846			4,691			8,537			414			903			1,317			943			3,868			6,128
Loss on assets held for sale ¹	—			—			—			46,946			—			46,946			—			—			46,946
Adjusted EBIT - Segment	69,925			72,393			142,318			62,351			77,181			139,532			78,376			75,247			293,155
Adjusted EBIT %	21.9		%	23.4		%	22.6		%	18.9		%	22.8		%	20.9		%	23.0		%	22.9		%	21.9		%
Adjusted D&A ²	16,230			16,816			33,046			17,548			16,199			33,747			16,018			17,004			66,769
Adjusted EBITDA - segment	$	86,155		$	89,209		$	175,364		$	79,899		$	93,380		$	173,279		$	94,394		$	92,251		$	359,924
Adjusted EBITDA %	27.0		%	28.9		%	27.9		%	24.2		%	27.6		%	25.9		%	27.7		%	28.1		%	26.9		%
Refrigeration & Food Equipment:
Segment earnings (EBIT)	$	23,529		$	11,459		$	34,988		$	24,807		$	44,375		$	69,182		$	35,211		$	14,439		$	118,832
Rightsizing and other costs	704			6,016			6,720			2,293			666			2,959			840			2,243			6,042
(Gain) loss on disposition ³	(6,551)			781			(5,770)			—			—			—			—			—			—
Adjusted EBIT - Segment	17,682			18,256			35,938			27,100			45,041			72,141			36,051			16,682			124,874
Adjusted EBIT %	5.7		%	6.2		%	5.9		%	8.1		%	11.7		%	10.0		%	9.7		%	5.4		%	8.9		%
Adjusted D&A ²	11,548			11,421			22,969			13,011			12,777			25,788			13,047			12,525			51,360
Adjusted EBITDA - segment	$	29,230		$	29,677		$	58,907		$	40,111		$	57,818		$	97,929		$	49,098		$	29,207		$	176,234
Adjusted EBITDA %	9.4		%	10.1		%	9.7		%	12.0		%	15.0		%	13.6		%	13.3		%	9.5		%	12.6		%
Total Segments:
Segment earnings (EBIT) ⁴	$	263,682		$	212,123		$	475,805		$	200,102		$	305,060		$	505,162		$	316,735		$	290,221		$	1,112,118
Rightsizing and other costs	6,668			15,217			21,885			3,928			5,730			9,658			3,485			13,412			26,555
Loss on assets held for sale ¹	—			—			—			46,946			—			46,946			—			—			46,946
(Gain) loss on disposition ³	(6,551)			781			(5,770)			—			—			—			—			—			—
Adjusted EBIT - Segment ⁵	263,799			228,121			491,920			250,976			310,790			561,766			320,220			303,633			1,185,619
Adjusted EBIT % ⁴	15.9		%	15.2		%	15.6		%	14.5		%	17.2		%	15.9		%	17.5		%	17.1		%	16.6		%
Adjusted D&A ²	65,008			64,966			129,974			66,133			65,093			131,226			65,190			67,024			263,440
Adjusted EBITDA - segment ⁵	$	328,807		$	293,087		$	621,894		$	317,109		$	375,883		$	692,992		$	385,410		$	370,657		$	1,449,059
Adjusted EBITDA % ⁵	19.9		%	19.5		%	19.7		%	18.4		%	20.7		%	19.6		%	21.1		%	20.9		%	20.3		%
¹ Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder.
² Adjusted D&A is depreciation and amortization expense, excluding depreciation and amortization included within rightsizing and other costs.
³ Q1, Q2, and Q2 YTD includes a $6,551 gain, a $781 expense and a $5,770 net gain on the sale of a business for AMS Chino, respectively.
⁴ Refer to Quarterly Segment Information section for reconciliation of total segment earnings (EBIT) to net earnings.
⁵ Refer to Non-GAAP Disclosures section for definition.

DOVER CORPORATION REVENUE GROWTH FACTORS (NON-GAAP) (unaudited)(in thousands, except per share data*)

Non-GAAP Reconciliations

Revenue Growth Factors

	2020
	Q2		Q2 YTD
Organic
Engineered Products	(20.1)	%	(11.1)	%
Fueling Solutions	(14.8)	%	(8.9)	%
Imaging & Identification	(14.0)	%	(9.2)	%
Pumps & Process Solutions	(8.8)	%	(5.0)	%
Refrigeration & Food Equipment	(20.2)	%	(12.8)	%
Total Organic	(16.0)	%	(9.5)	%
Acquisitions	0.7	%	0.8	%
Dispositions	(0.7)	%	(0.7)	%
Currency translation	(1.2)	%	(1.4)	%
Total*	(17.2)	%	(10.8)	%

* Totals may be impacted by rounding.

	2020
	Q2
Organic
United States	(10.3)	%
Other Americas	(33.5)	%
Europe	(19.5)	%
Asia	(14.3)	%
Other	(33.1)	%
Total Organic	(16.0)	%
Acquisitions	0.7	%
Dispositions	(0.7)	%
Currency translation	(1.2)	%
Total*	(17.2)	%

* Totals may be impacted by rounding.

Adjusted EPS Guidance Reconciliation
	Range
2020 Guidance for Earnings per Share (GAAP)	$	4.16		$	4.41
Acquisition-related amortization, net			0.71
Rightsizing and other costs, net			0.16
Gain on disposition, net			(0.03)
2020 Guidance for Adjusted Earnings per Share (Non-GAAP)	$	5.00		$	5.25

DOVER CORPORATION QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP) (unaudited)(in thousands)

Quarterly Cash Flow
	2020									2019
	Q1			Q2			Q2 YTD			Q1			Q2			Q2 YTD			Q3			Q4			FY 2019
Net Cash Flows Provided By (Used In):
Operating activities	$	75,863		$	271,809		$	347,672		$	24,524		$	208,709		$	233,233		$	350,865		$	361,208		$	945,306
Investing activities	(230,511)			(67,763)			(298,274)			(217,690)			(69,755)			(287,445)			(48,612)			(48,198)			(384,255)
Financing activities	280,954			(67,458)			213,496			36,067			(60,596)			(24,529)			(277,901)			(255,612)			(558,042)

Quarterly Free Cash Flow (Non-GAAP)
	2020									2019
	Q1			Q2			Q2 YTD			Q1			Q2			Q2 YTD			Q3			Q4			FY 2019
Cash flow from operating activities	$	75,863		$	271,809		$	347,672		$	24,524		$	208,709		$	233,233		$	350,865		$	361,208		$	945,306
Less: Capital expenditures	(40,172)			(38,999)			(79,171)			(37,122)			(53,970)			(91,092)			(46,184)			(49,528)			(186,804)
Free cash flow	$	35,691		$	232,810		$	268,501		$	(12,598)		$	154,739		$	142,141		$	304,681		$	311,680		$	758,502

Free cash flow as a percentage of revenue	2.2		%	15.5		%	8.5		%	(0.7)		%	8.5		%	4.0		%	16.7		%	17.6		%	10.6		%

Free cash flow as a percentage of net earnings	20.2		%	186.6		%	89.2		%	(11.9)		%	78.1		%	46.8		%	147.9		%	185.4		%	111.9		%

DOVER CORPORATION PERFORMANCE MEASURES (unaudited)(in thousands)

	2020						2019
	Q1		Q2		Q2 YTD		Q1		Q2		Q2 YTD		Q3		Q4		FY 2019
BOOKINGS

Engineered Products	$	414,972	$	278,373	$	693,345	$	427,697	$	397,420	$	825,117	$	426,059	$	457,145	$	1,708,321
Fueling Solutions	373,070		311,498		684,568		343,083		394,256		737,339		450,727		425,698		1,613,764
Imaging & Identification	272,604		221,315		493,919		267,762		264,175		531,937		284,527		276,451		1,092,915
Pumps & Process Solutions	369,403		275,872		645,275		369,801		375,905		745,706		329,642		318,482		1,393,830
Refrigeration & Food Equipment	355,157		326,400		681,557		376,998		384,365		761,363		323,422		361,970		1,446,755
Intra-segment eliminations	(375)		(460)		(835)		(725)		(490)		(1,215)		(528)		872		(871)
Total consolidated bookings	$	1,784,831	$	1,412,998	$	3,197,829	$	1,784,616	$	1,815,631	$	3,600,247	$	1,813,849	$	1,840,618	$	7,254,714

BACKLOG

Engineered Products	$	453,867	$	378,874			$	451,335	$	418,154			$	416,025	$	452,142
Fueling Solutions	211,518		199,305				185,847		186,202				223,081		205,842
Imaging & Identification	170,119		168,904				118,177		116,810				121,877		125,775
Pumps & Process Solutions	397,969		379,090				353,066		378,427				361,478		353,073
Refrigeration & Food Equipment	356,133		390,368				311,632		310,454				262,870		320,577
Intra-segment eliminations	(159)		(367)				(403)		(141)				(252)		(249)
Total consolidated backlog	$	1,589,447	$	1,516,174			$	1,419,654	$	1,409,906			$	1,385,079	$	1,457,160

Bookings Growth Factors

	2020
	Q2		Q2 YTD
Organic
Engineered Products	(29.8)	%	(15.6)	%
Fueling Solutions	(18.2)	%	(5.3)	%
Imaging & Identification	(16.5)	%	(8.0)	%
Pumps & Process Solutions	(25.7)	%	(11.9)	%
Refrigeration & Food Equipment	(11.6)	%	(7.9)	%
Total Organic	(20.6)	%	(10.0)	%
Acquisitions	0.7	%	0.9	%
Dispositions	(0.6)	%	(0.7)	%
Currency translation	(1.7)	%	(1.4)	%
Total*	(22.2)	%	(11.2)	%
* Totals may be impacted by rounding.

Non-GAAP Measures Definitions

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 (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of net earnings, 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 acquisition-related amortization, rightsizing and other costs, loss on extinguishment of debt, loss on assets held for sale, and a gain/loss on disposition. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. 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 represents adjusted net earnings divided by average diluted shares.

Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.

Adjusted EBIT by Segment is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain/loss on disposition. Adjusted EBIT Margin by Segment is defined as adjusted EBIT by segment divided by segment revenue.

Adjusted EBITDA by Segment is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs. Adjusted EBITDA Margin by Segment is defined as adjusted EBITDA by segment divided by segment revenue.

Management believes these measures are useful to investors to better understand the Company's ongoing profitability as it 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.

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 net earnings equals free cash flow divided by net earnings. Management believes that free cash flow and free cash flow ratios are important measures 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 and dispositions, provides a useful comparison of our revenue and bookings performance and trends between periods.

Performance Measures Definitions

Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.

Organic bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisition and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.

Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet have satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.

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:
Andrey Galiuk		Adrian Sakowicz
Vice President - Corporate Development		Vice President - Communications
and Investor Relations		(630) 743-5039
(630) 743-5131		[email protected]
[email protected]