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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 22, 2001
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-4018 53-0257888
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
280 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 922-1640
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Item 5. Other Events.
Dover Corporation issued its Fourth Quarter Earnings Release on January
22, 2001. See Exhibit 99.1 attached.
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Item 7. Financial Statements and Exhibits
(c) Exhibits.
The following Exhibits are furnished as part of Item 5 of the Report:
99.1 Dover Corporation Fourth Quarter Earnings Release of January 22, 2001.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DOVER CORPORATION
(Registrant)
Date: January 22, 2001 By: /s/George F. Meserole
-----------------------
George F. Meserole
Vice President, Controller
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 Dover Corporation Fourth Quarter Earnings Press Release
dated January 21, 2001.
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[DOVER CORPORATION LOGO]
CONTACT: READ IT ON THE WEB
David S. Smith http://www.dovercorporation.com
Vice President Finance, Dover
(212) 922-1640 JANUARY 22, 2001
DOVER REPORTS FOURTH QUARTER AND RECORD FULL YEAR RESULTS
New York, New York (January 22, 2001)...Dover Corporation (NYSE - DOV) earned
$.66 per diluted share in the fourth quarter ended December 31, 2000. This was
an increase of 10% from the $.60 per diluted share earned in the comparable
quarter last year (excluding a $.02 non-recurring charge to earnings in last
years fourth quarter for business divestitures). Sales in the fourth quarter
were $1.38 billion, up 11% from $1.25 billion last year, and operating income
for the quarter was $229.5 million, down 3% from $236.4 million last year. Net
income from continuing operations for the fourth quarter was $136.0 million, up
9% from $125.3 million last year (excluding the non-recurring item).
Dover earned $2.57 per diluted share for the full year from continuing
operations, excluding non-recurring items. This was an increase of 35% from the
$1.90 per diluted share earned in the prior year, excluding non-recurring items.
Full year sales increased by $954 million to $5.40 billion, an increase of 21%,
and operating profit increased $217.3 million or 28% to $984.6 million. Net
income from continuing operations for the full year was $526.6 million, up
$125.5 million or 29% from the prior year, excluding non-recurring items. The
non-recurring item for the full year of 1999 was the $.02 per diluted share
charge noted above. In 2000, there was a $.01 non-recurring charge in the first
quarter for a divestiture, and in the third quarter Dover reported a
non-recurring gain equal to $.04 per diluted share on the sale of an equity
investment. Net income per diluted share in 2000, including all non-recurring
items totaled $2.61.
Three of the four segments showed modest earnings growth in the fourth quarter.
Dover Technologies income increased 2% from the fourth quarter last year. Dover
Industries and Dover Diversified earnings were also up, by 1% and 2%,
respectively, while Dover Resources experienced a 20% earnings decline. For the
full year, all four segments had higher sales and earnings, led by Technologies
with an earnings increase of 73% on a 44% sales increase. The other three
subsidiaries -- Industries, Diversified and Resources -- had a combined earnings
increase of 11% on a sales increase of 10%.
The fourth quarter tax rate was 20.7%, down 13.1 points from the nine month rate
of 33.8%, as companies acquired in the last year began reporting tax credits in
December and existing companies' tax planning began producing greater results.
In addition, in the fourth quarter Dover recorded a foreign tax benefit from
restructuring a foreign operation equal to $.05 per diluted share. The full year
tax rate on a comparable basis to last year was 32.5%, down 1.6 points from last
years tax rate of 34.1%. Dover expects the full year 2001 tax rate to be
approximately the same as the 32.5% tax rate for 2000.
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Dover completed one stand-alone and four add-on acquisitions during the quarter
at a combined investment of $173.3 million, bringing the total for the year to
23 acquisitions (a record) for a total investment of $506.3 million. The profit
impact of these acquisitions in 2000 was small due to acquisition write-offs,
and imputed financing costs. Acquisitions completed in the last twelve months
added $84 million in sales and $13 million in operating profit in the fourth
quarter.
SEGMENT RESULTS
DOVER TECHNOLOGIES full year sales increased 44% to $2,100 million, and earnings
increased 73% to $392.0 million. This record breaking performance was a function
of extremely strong market conditions, particularly when compared to the prior
year when demand increased dramatically only in the second half, and leadership
positions in niche markets at all companies. In the fourth quarter, sales were
up 25% to $541.3 million from the prior year and earnings were up 2% to $80.8
million. However, the improved sequential performance trend that began in the
third quarter of 1999 reversed, and sales, earnings and margins all declined
from the third quarter of 2000.
In Technologies' Circuit Board Assembly and Test (CBAT) business, the signs of
possible market weakness reported at the end of the third quarter matured into a
much clearer unfavorable trend as the fourth quarter progressed. Bookings, at
$266 million, were down 9% from the same period last year, and were down 21%
from the third quarter. This is largely due to the fact that major Electronic
Manufacturing Services customers are reducing orders for new equipment as they
absorb the large capacity expansions of the past 18 months by rearranging
equipment sets to optimize capacity from units they already own. Some large
OEM's will be adding additional capacity to the market in the form of used
equipment. For these reasons, sales in the quarter, while up 16% from the same
period last year to $333 million, were down 9% from the third quarter. The
book-to-bill ratio was .80. CBAT earnings declined 16% to $48.9 million from the
same period last year, and declined 39% from the third quarter. The
disproportionate decline in income was due to the higher cost base built up
during the rapid increase in demand that CBAT had experienced since the middle
of 1999. While CBAT still expects its market to improve as 2001 progresses,
current indications are that the market will not improve in the first quarter.
If bookings remain at the levels experienced in the fourth quarter, CBAT
earnings will further decline. Appropriate right-sizing cost reductions are
underway.
Technologies' Specialty Electronic Components (SEC) sales increased 72% from the
same period last year to $159.5 million and earnings more than doubled to $32.8
million. Sales and earnings were up 8% and 11% respectively, over this years
third quarter. Bookings in the fourth quarter of $130.5 million, net of $30
million in cancellations, were up 33% over last year. The cancellations were of
orders booked mid-year during a period of serious component shortages in the
market, which apparently caused some over-ordering and resultantly higher
customer inventories than currently required. The book-to-bill ratio was .82
(1.00 without cancellations). For the year, earnings of $104.0 million were up
121% on sales of $531.1 million, an increase of 62%. Entering 2001 with a strong
backlog and participating in a broad range of telcom/datacom/networking markets
with high value, higher technology content products, the SEC companies believe
sales and earnings should remain flat with or moderately ahead of fourth quarter
levels.
In the fourth quarter, Dover Technologies acquired OK International, which is a
leading supplier of a wide variety of hand tools and consumable products focused
primarily on the circuit board manufacturers "workbench". This newest CBAT
business has had an excellent performance so
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far under Dover ownership, and should be less dependent on capital spending in
the CBAT market.
DOVER INDUSTRIES full year sales increased 9% to $1,246 million and segment
income increased 11% to $199.7 million. In the fourth quarter, sales increased
2% to $306.2 million from the same period last year and earnings increased 1% to
$49.0 million. Segment bookings were down 11% to $285.5 million and the
book-to-bill ratio was .93. Acquisitions made in the past year contributed about
5% of Industries' sales and earnings in the quarter. Earnings in the fourth
quarter were flat compared to the third quarter, on slightly lower sales.
As has been true all year, Industries' quarterly comparisons continued to be
adversely impacted by Heil Trailer, where market conditions, particularly for
its dry bulk trailers, have been weak all year (though stable at lower levels
since mid-year). Margins at Heil Trailer, now back in double digits, have
improved steadily since the bookings trough in April and the company is well
positioned for sharp earnings recovery if the market improves, or should
continue to perform well if it remains weak.
Heil Environmental, which has been the comparative improvement leader all year,
finished with a slightly higher earnings quarter on slightly lower sales.
Rotary Lift and Chief, the automotive services businesses, together continued
their string of year over year improvements, which have been driven by new
products and marketing programs as well as productivity investments and cost
control.
The food services businesses, Groen and Randell, have been facing increasingly
difficult market conditions, yet also continued their full year of favorable
comparisons to the prior period with double digit earnings growth.
Tipper Tie/Technopack's focus on internal improvements has not yet resulted in a
return to the record performance levels of 1998-1999. Returns on sales and
investment, while enviable, remain below historical levels.
DOVER DIVERSIFIED'S full year 2000 sales increased 10% from the prior year to
$1,175.5 million, and segment income also increased 10% to $167.9 million. In
the fourth quarter, sales declined 1% to $308.8 million and segment income
increased 2% to $50.9 million compared to the same period in the prior year.
Segment bookings in the quarter were down 6% to $277.6 million and the
book-to-bill ratio was .90. Sales in the quarter were up 8% from the third
quarter, and segment income was up 29%.
Acquisitions completed in the last twelve months again had a favorable impact on
the quarterly comparisons, though not as large as in prior quarters this year,
as Crenlo was acquired in October of 1999. In its first year as a Dover company,
Crenlo's sales are up 17%, boosted both by its operator cab and electronic
enclosures businesses. SWF, the packaging equipment company, acquired Salwasser
in June 2000, and with the integration of this business progressing well ahead
of original plan, enjoyed noticeably favorable comparisons to the prior year.
Performance Motorsports, the high performance piston manufacturer, which had
some benefit in prior quarters' sales and earnings comparisons this year from
its June 1999 acquisition of J.E. Piston, has continued to show very strong
double-digit growth even without the benefit of the acquisition in the
comparisons.
Hill Phoenix has negatively impacted Diversified's sales and earnings
comparisons all year, but less so in the fourth quarter as the market appears to
be firming, with backlog up 13% from last
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year. Operational improvements made in the down-turn are taking hold, and the
benefit of the recently acquired walk-in cooler company National Cooler, which
adds breadth to the product offerings, is coming on line.
Belvac, the can forming machinery company, had contributed substantially to
Diversified's comparisons in prior quarters this year. Although this company is
still performing very well, with margins above Diversified's average, the
dramatic turnaround in performance executed by management took hold in last
year's fourth quarter----meaning that the boost that Belvac has given to the
quarterly comparisons is probably over.
DOVER RESOURCES full year sales increased 14% to $887.0 million and segment
earnings increased 11% to $119.0 million. In the fourth quarter however,
earnings declined 20% to $24.5 million, on a sales increase of 11% to $225.1
million. Sales and earnings were both lower than the third quarter. Segment
bookings in the quarter were up 13% to $226.5 million and the book-to-bill ratio
was 1.01. Acquisitions completed in the last year added approximately $16
million to sales in the quarter, with almost no impact on segment earnings after
acquisition write-offs.
The weak fourth quarter results overall hid very strong performances at
Petroleum Equipment Group, OPW Fluid Transfer Group and at Tulsa Winch. Unless
its markets deteriorate materially, Resources' weak fourth quarter performance
should not be repeated in 2001.
The Petroleum Equipment Group, Quartzdyne and C. Lee Cook were all favorably
impacted by a strong "upstream" oil and gas sector and combined for a full year
earnings increase of about $20 million, though with a somewhat
disproportionately smaller contribution in the fourth quarter.
OPW Fluid Transfer Groups' operational turnaround from 1999 has continued to
more than offset a soft market. Tulsa Winch's "industry roll-up" acquisition
strategy and internal growth contributed another very strong quarter of sales
and earnings growth.
More than offsetting these positives in the quarter were the compounding of weak
markets for the Wilden and Blackmer pump companies, particularly in Europe, and
by charges for restructuring and legal matters. Automotive market conditions
have hurt De-Sta-Co Manufacturing and De-Sta-Co Industries. Ronningen-Petter's
Groupe Aoustin acquisition, while still clearly a good strategic move, is behind
schedule on integration.
DOVER CORPORATION also reports its pretax earnings on an EBITACQ basis (Earnings
Before Interest, Taxes, and non-cash charges arising from purchase accounting
for acquisitions). Fourth quarter EBITACQ of $226 million was 2% higher than
prior year. Acquisitions accounted for 6 percentage points.
During the fourth quarter, Dover replaced and increased an expiring bank credit
facility with a $750 million, 364-day Revolving Credit with a syndicate of 15
banks. This is used primarily as liquidity back-up for the company's commercial
paper program. With this facility, the $1 billion public debt shelf registration
announced last quarter, and the strong credit ratings re-affirmed by both of the
major credit rating agencies, Dover has ready access to the capital markets when
needed to support its growth strategies, and for refinancing short-term debt.
Commenting on the results and the current outlook Mr. Thomas L. Reece, Chairman
and CEO said, "While Dover's earnings growth in 2000 was outstanding, we left
the year experiencing a rapid softening in the CBAT market, after a year and a
half of extremely strong demand. We expect this market to recover as 2001
progresses, but not in the first quarter. As a result Dover's first quarter
results this year could easily be 20% below the first quarter of 2000. We expect
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very strong earnings growth for the year at Resources and, to a lesser degree,
improved results at Industries and Diversified as well. At this point we would
expect the earnings comparisons to improve dramatically as the year progresses,
but the timing of the recovery in the CBAT markets will determine whether Dover
can maintain the record earnings level of 2000 in 2001".
Additional information on Dover and its operating companies can be found on the
Company's Website. (http://www.dovercorporation.com). The Dover website will
host a Webcast of the fourth quarter conference call at 8:15 AM Eastern time on
Tuesday, January 23. The conference call will also be made available for replay
on the website.
"Dover Corporation makes information available to the public, orally and in
writing, which may use words like 'expects' and 'believes', which are
'forward-looking' statements' under the Private Securities Litigation Reform Act
of 1995. These 'forward-looking' statements are subject to a number of risks and
uncertainties, which could cause actual results to differ materially from
historical results or those anticipated. People receiving such information are
advised to evaluate this information in light of the various risk factors
identified in the Company's most recent Annual Report on Form 10-K, see page 2 -
Special Notes Regarding Forward Looking Statements".
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DOVER CORPORATION CONSOLIDATED
MARKET SEGMENT RESULTS
(UNAUDITED)
Fourth quarter ended December 31,
-----------------------------------------
Percent
SALES 2000 1999 Change
----- --------------- -------------- -------
Dover Technologies $ 541,298,000 $ 434,464,000 25%
Dover Industries 306,241,000 300,147,000 2%
Dover Diversified 308,797,000 311,949,000 -1%
Dover Resources 225,069,000 203,007,000 11%
--------------- --------------
Total (after intramarket eliminations) $ 1,379,688,000 $1,248,284,000 11%
=============== ==============
EARNINGS
Dover Technologies $ 80,783,000 $ 78,901,000 2%
Dover Industries 49,014,000 48,420,000 1%
Dover Diversified 50,869,000 49,970,000 2%
Dover Resources 24,488,000 30,786,000 -20%
--------------- --------------
Subtotal (after intramarket eliminations) 205,154,000 208,077,000
Loss on disposition 1) ($1,846,000) (7,000,000)
Corporate expense (6,825,000) (8,769,000) -22%
Net interest expense (26,547,000) (12,972,000) 105%
--------------- --------------
Earnings before taxes on income 169,936,000 179,336,000 -5%
Taxes on income 35,243,000 58,347,000 -40%
--------------- --------------
Net earnings $ 134,693,000 $ 120,989,000 11%
=============== ==============
Net earnings per common share:
Basic $ 0.67 $ 0.60 12%
=============== ==============
Diluted $ 0.66 $ 0.58 14%
=============== ==============
1) 2000 includes a $1.8 million pre-tax loss on the disposition of a business.
1999 includes a pre-tax charge of $7.0 million related to the sale of a
business.
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DOVER CORPORATION CONSOLIDATED
MARKET SEGMENT RESULTS
(UNAUDITED)
Twelve months ended December 31,
SALES 2000 1999
----- --------------- ---------------
Dover Technologies $ 2,100,004,000 $ 1,457,792,000 44%
Dover Industries 1,245,608,000 1,144,599,000 9%
Dover Diversified 1,175,519,000 1,071,574,000 10%
Dover Resources 887,042,000 777,691,000 14%
--------------- ---------------
Total (after intramarket eliminations) $ 5,400,717,000 $ 4,446,420,000 21%
=============== ===============
EARNINGS
Dover Technologies $ 391,960,000 $ 226,761,000 73%
Dover Industries 199,693,000 179,554,000 11%
Dover Diversified 167,861,000 152,139,000 10%
Dover Resources 119,026,000 107,264,000 11%
--------------- ---------------
Subtotal (after intramarket eliminations) 878,540,000 665,718,000
Gain (loss) on disposition
and sale of equity investments 1) 10,495,000 10,256,000
Corporate expense (27,279,000) (25,790,000) 6%
Net interest expense (89,441,000) (35,180,000) 154%
--------------- ---------------
Earnings before taxes on income 772,315,000 615,004,000 26%
Taxes on Income 239,108,000 209,950,000 14%
--------------- ---------------
Net earnings - Continuing Operations 533,207,000 405,054,000 32%
Gain / (loss) on sale of discontinued operations 2) (13,595,000) 523,938,000
--------------- ---------------
Net earnings $ 519,612,000 $ 928,992,000 -44%
=============== ===============
Net earnings per common share:
Basic - Continuing $ 2.63 $ 1.94 36%
Gain (loss) on sale (0.07) 2.50
--------------- ---------------
Net earnings $ 2.56 $ 4.44
=============== ===============
Diluted - Continuing $ 2.61 $ 1.92 36%
Gain (loss) on sale (0.07) 2.49
--------------- ---------------
Net earnings $ 2.54 $ 4.41
=============== ===============
Average number of shares outstanding - Basic 202,971,000 209,063,000
Average number of shares outstanding - Diluted 204,677,000 210,679,000
1) 2000 includes a pre-tax gain on sale of marketable securities of $13.7
million and a pre-tax loss on the disposition of a business of $3.2
million. 1999 includes a pre-tax disposition gain on the sale of businesses
of $10.3 million
2) On January 5, 1999, Dover completed the sale of its elevator business to
Thyssen Industrie AG for $1.16 billion resulting in a net gain of $523.9
million in 1999. The loss of $13.6 million in 2000 reflects subsequent
adjustments to both the purchase price and expenses related to the
disposition.
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DOVER CORPORATION
OPERATIONAL PROFITS (1)
(in millions)
2000 - FOURTH QUARTER 2000 1999
------------------------ -------------------------- ------------------------
SALES EARNINGS % SALES EARNINGS % SALES EARNINGS %
----- -------- -- ----- -------- -- ----- -------- --
Circuit board assembly / test $ 333 $ 50 15 $ 1,369 $ 265 19 $ 934 $ 154 16
Electronic components 159 33 21 531 104 20 328 48 15
Marking 49 12 24 200 60 30 196 59 30
------------------------ -------------------------- ------------------------
DOVER TECHNOLOGIES 541 95 18 2,100 429 20 1,458 261 18
DOVER INDUSTRIES 306 54 18 1,246 224 18 1,145 203 18
DOVER DIVERSIFIED 309 56 18 1,176 194 17 1,072 177 17
DOVER RESOURCES 225 33 15 887 149 17 778 128 16
------------------------ -------------------------- ------------------------
OPERATIONAL PROFITS (AFTER ELIM.) (1) $1,380 238 17 $ 5,401 996 18 $4,446 769 17
======================== ========================== ========================
CORPORATES AND OTHER (12) (49) (44)
------- ------- -------
EBITACQ (2) 226 947 725
GAIN (LOSS) ON DISPOSITIONS &
SALE OF EQUITY SECURITIES (2) 10 10
INTEREST (27) (89) (35)
ACQUISITION WRITE-OFFS (27) (96) (85)
------- ------- -------
DOVER PRE-TAX INCOME $ 170 $ 772 $ 615
======= ======= =======
(1) Differs from segment operating profits in that all non-cash write-offs
relating to acquisitions are excluded, along with the expenses of each
segment's corporate group.
(2) Earnings before taxes, interest, acquisition write-offs and non-recurring
gains.
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DOVER CORPORATION
ACQUISITIONS - FOURTH QUARTER 2000
DATE TYPE ACQUIRED COMPANIES LOCATION (NEAR) SEGMENT - OPERATING CO.
--------------------------------------------------------------------------------------------------------------------------------
1-OCT STOCK VITECH GALEEN, NETHERLANDS DTI EVERETT CHARLES
Manufactures printed circuit board test
fixtures and provider of test services for
PC boards.
23-OCT STOCK RG INDUSTRIES LTD. EDMONTON, ALBERTA CANADA DRI PETROLEUM EQUIPMENT GROUP
Manufactures sucker rod guides and urethane-
coated couplings.
7-NOV STOCK OK INTERNATIONAL INC. MENLO PARK, CA DTI
Manufactures professional tools and equipment
used in electronics, telecommunications and
general manufacturing industries.
30-NOV ASSET CINOX CINCINNATI, OHIO DTI QUADRANT
Manufactures precision quartz crystals.
5-DEC STOCK KALYN/SIEBERT, INCORPORATED GATESVILLE, TEXAS DII HEIL TRAILER
Manufactures heavy-duty customized truck
trailers for commercial and U.S. government/
military customers.
