1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For three months ended March 31, 2001 Commission File No. 1-4018
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 53-0257888
(State of Incorporation) (I.R.S. Employer 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
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
The number of shares outstanding of the Registrant's common stock as of the
close of the period covered by this report was 203,263,348.
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Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
UNAUDITED
2001 2000
----------- -----------
Net sales $ 1,247,564 $ 1,251,283
Cost of sales 823,764 794,144
----------- -----------
Gross profit 423,800 457,139
Selling & administrative expenses 292,912 264,079
----------- -----------
Operating profit 130,888 193,060
----------- -----------
Other deductions (income):
Interest expense 26,410 17,765
Interest income (7,133) (2,336)
Foreign exchange (404) 814
Loss (gain) on dispositions -- 1,400
All other, net (2,349) (3,576)
----------- -----------
Total 16,524 14,067
----------- -----------
Earnings before taxes on income 114,364 178,993
Federal & other taxes on income 35,278 61,674
----------- -----------
Net earnings $ 79,086 $ 117,319
=========== ===========
Weighted average number of common shares
outstanding during the period:
- Basic 203,222 202,797
=========== ===========
- Diluted 204,468 204,440
=========== ===========
Net earnings per common share:
- Basic $ 0.39 $ 0.58
=========== ===========
- Diluted $ 0.39 $ 0.57
=========== ===========
See Notes to Consolidated Financial Statements.
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DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
UNAUDITED
2001 2000
-------- --------
Net earnings $ 79,086 $117,319
-------- --------
Other comprehensive earnings, net of tax:
Foreign currency translation adjustments
Unrealized gains (losses) on securities (tax -$1,237 in 2001 (35,774) 1,901
(2,297) --
and $0 in 2000) -------- --------
Other comprehensive earnings (38,071) 1,901
-------- --------
Comprehensive earnings $ 41,015 $119,220
======== ========
DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
UNAUDITED
2001 2000
---------- ----------
Retained earnings at January 1 $3,252,319 $2,830,175
Net earnings 79,086 117,319
---------- ----------
3,331,405 2,947,494
Deduct:
Common stock cash dividends
$ 0.125 per share ($0.115 in 2000) 25,413 23,339
---------- ----------
Retained earnings at end of period $3,305,992 $2,924,155
========== ==========
See Notes to Consolidated Financial Statements.
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DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(000 OMITTED)
UNAUDITED
March 31, 2001 December 31, 2000
-------------- -----------------
Assets:
-------
Current assets:
Cash & cash equivalents $ 169,768 $ 181,399
Marketable securities 1,812 5,341
Receivables, net of allowance for doubtful accounts 864,052 903,177
Inventories 794,056 783,200
Prepaid expenses 109,988 101,732
----------- -----------
Total current assets 1,939,676 1,974,849
----------- -----------
Property, plant & equipment (at cost) 1,744,693 1,683,491
Accumulated depreciation (957,235) (927,943)
----------- -----------
Net property, plant & equipment 787,458 755,548
----------- -----------
Goodwill, net of amortization 1,915,823 1,896,715
Other intangible assets, net of amortization 182,322 181,924
Deferred charges & other assets 93,849 83,080
----------- -----------
$ 4,919,128 $ 4,892,116
=========== ===========
Liabilities:
------------
Current liabilities:
Notes payable $ 502,477 $ 839,880
Current maturities of long-term debt 2,471 2,657
Accounts payable 252,100 277,910
Accrued compensation & employee benefits 143,550 178,280
Accrued insurance 49,974 45,855
Other accrued expenses 220,082 209,247
Income taxes 72,973 50,811
----------- -----------
Total current liabilities 1,243,627 1,604,640
----------- -----------
Long-term debt 1,033,292 631,846
Deferred taxes 64,336 67,381
Other deferrals (principally compensation) 120,023 146,674
Stockholders' equity:
---------------------
Preferred stock -- --
Common stock 237,106 236,944
Additional paid-in surplus 52,130 48,552
Cumulative translation adjustments (148,485) (112,711)
Unrealized holding gains (losses) 835 3,132
----------- -----------
Accumulated other comprehensive earnings (147,650) (109,579)
----------- -----------
Retained earnings 3,305,992 3,252,319
----------- -----------
Subtotal 3,447,578 3,428,236
Less: treasury stock 989,728 986,661
----------- -----------
2,457,850 2,441,575
----------- -----------
$ 4,919,128 $ 4,892,116
=========== ===========
See Notes to Consolidated Financial Statements
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DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
UNAUDITED
2001 2000
--------- ---------
Cash flows from operating activities:
Net earnings $ 79,086 $ 117,319
--------- ---------
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation 35,768 31,963
Amortization of goodwill 13,371 11,490
Amortization - other 4,051 4,558
Net increase (decrease) in deferred taxes (3,901) 5,997
Net increase (decrease) in LIFO reserves (191) 661
Increase (decrease) in deferred compensation (26,736) 1,821
Loss on sale of business -- 1,400
Other, net 3,008 (3,939)
Changes in assets & liabilities (excluding acquisitions):
Decrease (increase) in accounts receivable 33,463 (78,959)
Decrease (increase) in inventories, excluding LIFO reserve (10,035) (52,020)
Decrease (increase) in prepaid expenses (9,785) (8,780)
Increase (decrease) in accounts payable (23,619) 6,209
Increase (decrease) in accrued expenses (14,204) (36,464)
Increase (decrease) in federal & other taxes on income 15,826 14,891
--------- ---------
Total adjustments 17,016 (101,172)
--------- ---------
Net cash from operating activities of continuing operations 96,102 16,147
--------- ---------
Cash flows from (used in) investing activities:
Additions to property, plant & equipment (62,518) (35,231)
Acquisitions, net of cash & cash equivalents (82,361) (154,080)
Proceeds from sale of business -- 14,923
--------- ---------
Net cash from (used in) investing activities of continuing operations (144,879) (174,388)
--------- ---------
Cash flows from (used in) financing activities:
Increase (decrease) in notes payable (337,410) 456,975
Increase (decrease) in long-term debt 400,769 12,728
Purchase of treasury stock (3,067) (3,307)
Proceeds from exercise of stock options 2,266 5,449
Cash dividends to stockholders (25,412) (23,339)
--------- ---------
Net cash from (used in) financing activities of continuing operations 37,146 448,506
--------- ---------
--------- ---------
Discontinued operations - tax payments -- (307,428)
--------- ---------
Net increase (decrease) in cash & cash equivalents (11,631) (17,163)
Cash & cash equivalents at beginning of period 181,399 138,038
--------- ---------
Cash & cash equivalents at end of period $ 169,768 $ 120,875
========= =========
See Notes to Consolidated Financial Statements.
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DOVER CORPORATION CONSOLIDATED
MARKET SEGMENT RESULTS
(unaudited)
First quarter ended March 31,
Percent
SALES 2001 2000 Change
----- --------------- --------------- ------
Dover Technologies $ 434,430,000 $ 466,366,000 -7%
Dover Industries 299,707,000 299,041,000
Dover Diversified 276,132,000 269,538,000 2%
Dover Resources 238,724,000 218,156,000 9%
--------------- ---------------
Total (after intramarket eliminations) $ 1,247,564,000 $ 1,251,283,000
=============== ===============
EARNINGS
Dover Technologies $ 48,226,000 $ 84,795,000 -43%
Dover Industries 37,994,000 50,415,000 -25%
Dover Diversified 20,518,000 33,465,000 -39%
Dover Resources 31,718,000 33,541,000 -5%
--------------- ---------------
Subtotal (after intramarket eliminations) 138,456,000 202,216,000 -32%
Loss on disposition -- (1,400,000)
Corporate expense (4,558,000) (6,241,000) -27%
Net interest expense (19,534,000) (15,582,000) 25%
--------------- ---------------
Earnings before taxes on income 114,364,000 178,993,000 -36%
Taxes on income 35,278,000 61,674,000 -43%
--------------- ---------------
Net earnings $ 79,086,000 $ 117,319,000 -33%
=============== ===============
Net earnings per diluted common share: $ 0.39 $ 0.57 -32%
=============== ===============
Average number of diluted shares outstanding 204,468,000 204,440,000
Impact of acquisition write-offs on diluted EPS:
Diluted EPS $ 0.39 $ 0.57 -32%
Goodwill write-offs (net of tax) 0.05 0.05
--------------- ---------------
EPS before goodwill 0.44 0.62 -29%
Other acquistion write-offs (net of tax) 0.04 0.04
--------------- ---------------
EPS before all acquisition write-offs $ 0.48 $ 0.66 -27%
=============== ===============
DOVER CORPORATION AND SUBSIDIARIES
MARKET SEGMENT IDENTIFIABLE ASSETS
(000 OMITTED)
UNAUDITED
March 31, December 31,
2001 2000
----------------------------------
Dover Technologies $1,485,377 $1,537,268
Dover Industries 1,107,634 1,088,540
Dover Diversified 1,196,084 1,211,151
Dover Resources 951,770 928,841
Corporate 178,263 126,316
----------------------------------
Consolidated Total $4,919,128 $4,892,116
==================================
See Notes to Consolidated Financial Statements.
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DOVER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE A - Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and therefore do
not include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and changes in financial position in
conformity with generally accepted accounting principles. In the opinion of the
Company, all adjustments, consisting only of normal recurring items necessary
for a fair presentation of the operating results have been made. The results of
operations of any interim period are subject to year-end audit and adjustments,
and are not necessarily indicative of the results of operations for the fiscal
year.
NOTE B - Inventory
Inventories, by components, are summarized as follows :
(000 omitted)
----------------------------
UNAUDITED
March 31, December 31,
2001 2000
---------- -------------
Raw materials $315,298 $311,211
Work in progress 220,543 217,678
Finished goods 293,891 290,178
-------- --------
Total 829,732 819,067
Less LIFO reserve 35,676 35,867
-------- --------
Net amount per balance sheet $794,056 $783,200
======== ========
NOTE C - Accumulated other Comprehensive Earnings
Accumulated other comprehensive earnings, by components
are summarized as follows:
UNAUDITED (000 omitted)
---------------------------------------------------------------
Accumulated
Other Unrealized
Comprehensive Cumulative Holding
Earnings Translation Gains
(losses) Adjustments (losses)
-------------- ----------------- -----------------
Beginning balance $(109,579) $(112,711) $ 3,132
Current-period change (38,071) (35,774) (2,297)
--------- --------- -------
Ending balance $(147,650) $(148,485) $ 835
========= ========= =======
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NOTE D - Additional Information
For a more adequate understanding of the Company's financial position,
operating results, business properties and other matters, reference is made to
the Company's Annual Report on Form 10-K which was filed with the Securities and
Exchange Commission on March 13, 2001.
Net earnings as reported was used in computing both basic EPS and
diluted EPS without further adjustment. The Company does not have a complex
capital structure. Accordingly, the entire difference between basic weighted
average shares and diluted weighted average shares results from non-vested
restricted stock and assumed stock option exercises. The diluted EPS computation
was made using the treasury stock method.
In accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities", marketable
securities are classified as available-for-sale and are recorded at current
market value. Net unrealized gains and losses on marketable securities available
for sale are credited or charged to Other Comprehensive Earnings.
At March 31, 2001 the fair value, cost basis and gross unrealized gains
on available-for-sales securities are approximately $1.9 million, $0.6 million
and $1.3 million, respectively.
In June 2000, the FASB issued statement of Financial Accounting
Standards No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities -- an Amendments of FASB Statement No. 133", effective for
all fiscal quarters of all fiscal years beginning after June 15, 2000. The
Company has adopted the statement and does not expect it to have an impact on
the consolidated results of operations or financial position and related
disclosure requirements.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(1) MATERIAL CHANGES IN CONSOLIDATED FINANCIAL CONDITION:
The Company's liquidity decreased during the first three months of 2001
as compared to the position at December 31, 2000. The amounts invested in
acquisitions ($83 million) is the principal reason for the decrease in
liquidity.
Working capital increased from $370.2 million at the end of last year to
$696.0 million at March 31, 2001. Capital expenditures were $62.5 million for
the three months compared to $35.2 million last year. The working capital
increase and capital expenditures were funded by internal cash flow.
At March 31, 2001, net debt (defined as long-term debt plus current
maturities on long-term debt plus notes payable less cash and equivalents and
marketable securities) of $1,366.7 million represented 35.7% of total capital.
This compares with 34.5% at December 31, 2000. The Company continues to be rated
A-1 by Standard & Poors and P-1 by Moody's. The Company believes its significant
free cash flow will enable it to fund internal growth and, together with modest
debt utilization, fund its acquisition program. The Company also believes it
will continue to maintain a solid credit profile. The Company filed a shelf
registration for the possible issuance of up to $1 billion in senior debt
securities on October 5th, 2000. The Company believes this will provide
flexibility to issue public debt rapidly depending on market conditions or
financing needs. On February 12, 2001 the Company completed its underwritten
offering of $400.0 million, 6.50% notes due February 15, 2011. The proceeds were
used to reduce short-term debt.
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The Company completed five add-on acquisitions during the quarter at a combined
cost of $83 million.
ACQUISITIONS - FIRST QUARTER 2001
DATE TYPE ACQUIRED COMPANIES LOCATION (Near) SEGMENT - Operating Co.
- --------------------------------------------------------------------------------------------------------------------------
DE-STA-CO
01-JAN ASSET CPI PRODUCTS PLYMOUTH, MI DRI INDUSTRIES
Manufactures a broad array of end-of-arm, transfer press, and assembly tooling products.
HEIL
04-JAN STOCK BAYNE MACHINE WORKS, INC. GREENVILLE, SC DII ENVIRONMENTAL
Manufactures hydraulic lift systems utilized in the waste industry.
31-JAN STOCK ADHOC LOGICIEL HAUTMONT, FRANCE DTI IMAJE
Develops software systems for traceability, identification and product flow management.
28-FEB STOCK SCHREIBER ENGINEERING CERRITOS, CA DII DOVATECH
Manufactures small and medium-sized chillers.
31-MAR STOCK COMCO CINCINNATI, OH DDI MARK ANDY
Manufactures narrow and mid-web flexographic printing presses.
The profit impact in 2001, of these acquisitions, will be small due
to acquisition write-offs, and imputed financing costs. Acquisitions completed
in the last twelve months (April 1, 2000 - March 31, 2001) added $68.8 million
in sales and $8.9 million in operational profit in the first quarter.
(2) MATERIAL CHANGES IN RESULTS OF OPERATIONS:
The Company earned $.39 per diluted share in the first quarter ended
March 31, 2001. This was a decrease of 32% from the $.57 per diluted share
earned in the comparable quarter last year. Sales in the first quarter were
$1.25 billion, equal to last year, and segment earnings for the quarter were
$138.5 million, down 32% from $202.2 million last year. Net income from
continuing operations for the first quarter was $79.1 million, down 33% from
$117.3 million last year.
All four segments showed earnings declines compared to the same
period last year. Dover Technologies' income decreased 43%, on a 7% sales
decline. Dover Industries and Dover Diversified's earnings declined by 25% and
39% respectively, on essentially flat sales, and Dover Resources' earnings
declined 5% on a 9% sales increase.
The margin decline at many operating companies reflects the lower
levels of demand in their served markets, and expenses incurred to reduce costs
in response to this environment. These factors will also impact the second
quarter.
The Company also reports its pretax earnings on an EBITACQ basis
(Earnings before Interest, Taxes, and non-cash charges arising from purchase
accounting for Acquisitions). First quarter EBITACQ of $160 million was 27%
lower than the prior year's first quarter.
The first quarter tax rate was 30.8%, down 1.7 points from a
comparable full year 2000 rate of 32.5%, the Company does not reduce research
and development spending when earnings decline, keeping related tax credits
high, and export tax credits lag sales declines slightly. As a result, the tax
rate declines when earnings are lower. Interest expense was lower than the
fourth quarter due to lower interest rates and the favorable impact on interest
income from a tax refund recognized in the first quarter.
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DOVER TECHNOLOGIES:
First quarter sales decreased 7% to $434.4 million, and earnings
decreased 43% to $48.2 million compared to the same period last year, due to the
broad-based contraction in the electronics industry. Technologies'
disproportionate decline in earnings was due to the higher level of fixed costs
added to respond as this market grew rapidly from second half of 1999 through
most of 2000, and difficulty in adjusting variable costs in the rapidly
declining market since late in 2000. Technologies continues to incur high levels
of expenses for new product and market development. Acquisitions completed in
the last year added approximately $31 million to sales in the quarter, with no
material impact on segment earnings after acquisition write-offs.
In Technologies' Circuit Board Assembly and Test (CBAT) business,
first quarter sales decreased 27% to $228.4 million, and earnings decreased 75%
to $15.6 million. Bookings, at $187.6 million, were down 47% from the same
period last year. The book-to-bill ratio was .82. All CBAT companies owned for a
full year had lower results and demand for new CBAT machines is low in all
customer segments. Recently acquired OK International consumables and workbench
handtools for circuit board manufacturers are less impacted by the capital goods
cycle in this industry. Long-term growth attributes of the CBAT business remain
strong, and therefore new product and market development activities are being
emphasized. However, because of these expenses and lower backlog, second quarter
sales and earnings will be lower than the first quarter.
Technologies' Specialty Electronic Components (SEC) sales increased
57% from the same period last year to $162.4 million and earnings increased 85%
to $32.6 million. Bookings in the first quarter of $91.5 million were down 42%
from last year. The book-to-bill ratio was .56. The SEC companies entered the
year with high backlogs, which allowed sales and earnings to remain at roughly
the same level as last year's fourth quarter. However, the first quarter's low
bookings, exacerbated by $40 million of order cancellations, means that sales
and earnings will decline in the second quarter. SEC sales are concentrated in
higher value applications. These are found disproportionately in the
datacom/telecom/networking markets which have been particularly hard hit, a
factor somewhat mitigated by the SEC's focus on 'high-end' components that tend
to be included in its customers' new product introductions.
DOVER INDUSTRIES:
First quarter sales were flat at $299.7 million and segment income
decreased 25% to $38.0 million compared to the same period last year. Sales and
earnings were both lower than the fourth quarter of 2000. Segment bookings were
up 9% to $319.7 million and the book-to-bill ratio was 1.07. Acquisitions
completed in the last year added approximately $15 million to sales in the
quarter, with almost no impact on segment earnings after acquisition write-offs.
Most of Industries' companies had lower earnings. This was most
notable at Heil Environmental, where the earnings decline was caused by delayed
chassis deliveries to Heil and customer delayed deliveries on major contracts.
Though backlogs in this business have improved recently, the impact of capital
constraints on the major waste haulage customers' spending makes a recovery to
last year's record results unlikely. Heil Trailer's earnings comparisons
continue to suffer despite continued cost reduction in a market for dry bulk
trailers that has declined for more than a year. Tipper Tie has been adversely
impacted by the effect of "Mad-Cow" and hoof-and-mouth disease scares on meat
consumption, particularly in Europe. The markets served by both the automotive
service companies (Rotary Lift and Chief) and the food service equipment
companies (Groen and Randell) have also been weak.
Somero, a 1999 acquisition and Industries' smallest company,
experienced a dramatic earnings improvement from a very depressed prior year,
the result of both market conditions and management's new marketing strategies
for used equipment. Both PDQ and Texas Hydraulics had modest earnings
improvements on higher sales as a result of product and market initiatives to
combat difficult markets.
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DOVER DIVERSIFIED:
First quarter sales increased 2% from the prior year to $276.1
million, and segment income decreased 39% to $20.5 million compared to the same
period last year. Sales and earnings were both lower than the fourth quarter of
2000. Segment bookings in the quarter were down 8% to $287.5 million and the
book-to-bill ratio was 1.04. Acquisitions completed in the last year added
approximately $8 million to sales in the quarter, with almost no impact on
segment earnings after acquisition write-offs.
The primary reason for the decline in earnings at Diversified was the
recognition in late March of $9.4 million of losses at Crenlo, primarily related
to write-off of overstated costs in inventory, exacerbated by a decline in the
market for its electronics enclosure products. A surprisingly weak market
negatively impacted earnings at Mark Andy, and despite a favorable outlook in
the repair and overhaul markets, A/C Compressors' sales and earnings were lower,
compared to a very strong first quarter last year. Tranter was hurt, to a lesser
degree, by weak demand and fierce competition in its radiator market.
Hill Phoenix's sales and earnings both showed double digit increases
from the prior year, and while the full year is still anticipated to show
favorable comparisons, much of this improvement is expected in the second half.
Sargent, Performance Motorsports, Waukesha, and SWF all had earnings
improvements in generally more favorable market environments, with SWF further
helped by the effective integration of its recent acquisitions.
DOVER RESOURCES:
First quarter sales increased 9% to $238.7 million and segment
earnings decreased 5% to $31.7 million compared to the same period last year.
Sales and earnings were both higher than the fourth quarter, with earnings up
30%. Segment bookings in the quarter were up 11% to $255.1 million and the
book-to-bill ratio was 1.07. Acquisitions completed in the last year added
approximately $15 million to sales in the quarter, with almost no impact on
segment earnings after acquisition write-offs.
Those Resources companies serving the energy production markets
(Petroleum Equipment Group, Quartzdyne, and C. Lee Cook), together increased
earnings by 40%, the result of a strong market and good operating leverage.
Tulsa Winch, the result of multiple acquisitions in the winch industry,
continued to perform extremely well. This was more than offset by very weak
transportation markets served by OPW Fluid Transfer Group and Blackmer, and the
impact of the automotive market slowdown on De-Sta-Co Manufacturing.
OUTLOOK:
The first quarter was disappointing after the strong growth experienced in 1999
and 2000, but our operating company presidents are taking the right actions to
manage their businesses in these challenging economic times, and are also making
appropriate investments to grow their market shares. We are confident that this
will have a positive impact on results when we get back into a growth mode.
Meanwhile results should improve quarter over quarter in the second half but
will not compare favorably with 2000 results.
Special Notes Regarding Forward Looking Statements
This Quarterly Report on Form 10-Q, the Annual Report on Form 10-K and the
documents that are incorporated by reference, particularly sections of any
report under the headings "Outlook" or "Management's Discussion and Analysis",
contain forward-looking statements within the meaning of the Securities Act of
1933, as amended, and the Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. Such statements relate to, among other
things, industries in which the Company operates, the U.S. and global economies,
earnings, cash flow and operating improvements and may be indicated by words or
phrases such as "anticipates", "supports", "plans", "projects", "expects",
"should", "hope", "forecast", "Dover believes", "management is of the opinion"
and similar words or phrases. Such statements may also be made by management
orally. Forward-looking statements are subject to inherent uncertainties and
risks, including among others: increasing price and product/service competition
by foreign and domestic competitors, including new entrants; technological
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developments and changes; the ability to continue to introduce competitive new
products and services on a timely, cost effective basis; the mix of
products/services; the achievement of lower costs and expenses; domestic and
foreign governmental and public policy changes including environmental
regulations; protection and validity of patent and other intellectual property
rights; the continued success of the Company's acquisition program; the cyclical
nature of the Company's business; and the outcome of pending and future
litigation and governmental proceedings. In addition, such statements could be
affected by general industry and market conditions and growth rates, and general
domestic and international economic conditions including interest rate and
currency exchange rate fluctuations. In light of these risks and uncertainties,
actual events and results may vary significantly from those included in or
contemplated or implied by such statements. Readers are cautioned not to place
undue reliance on such forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
The Company may, from time to time, post additional or supplemental financial
or other information on its internet website, http://www.dovercorporation.com.
Such information will supplement regular quarterly public filings and will be
found in the "What's New" section of the website's home page. It will be
accessible from the home page for approximately one month after release, after
which time it will be archived on the website for a period of time. The
Internet address in this release is for informational purposes only and is not
intended for use as a hyperlink.
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PART II OTHER INFORMATION
Item 5. Other Information
The Company included these tables in its first quarter press release. See also
2000 Annual Report pages 23 and 40.
DOVER CORPORATION
OPERATIONAL INCOME
(IN MILLIONS) (UNAUDITED)
2001 - Three Months 2000 - Three Months 2000 - Full Year
-------------------------- ------------------------- ------------------------
SALES INCOME % SALES INCOME % SALES INCOME %
----- ------ - ----- ------ - ----- ------ -
Circuit board assembly / test $ 228 $ 16 7 $ 315 $ 61 19 $1,369 $ 265 19
Electronic components 162 33 20 103 18 17 531 104 20
Marking 44 9 20 48 14 29 200 60 30
-------------------------- ------------------------- ------------------------
Dover Technologies 434 58 13 466 93 20 2,100 429 20
Dover Industries 300 45 15 299 56 19 1,246 224 18
Dover Diversified 276 25 9 270 41 15 1,176 194 17
Dover Resources 239 39 16 218 42 19 887 149 17
-------------------------- ------------------------- ------------------------
Operational subtotal (after elim.) $1,248 167 13 $1,251 232 19 $5,401 996 18
-------------------------- ------------------------- ------------------------
Corporates and other (7) (14) (49)
--- --- ---
EBITACQ 160 218 947
=== === ===
"Operational Income" - differs from segment operating profits because it
excludes all non-cash write-offs relating to acquisitions, the expenses of each
segment's corporate group, and foreign exchange gains or losses.
"EBITACQ" - earnings before taxes, interest, acquisition write-offs and
non-recurring gains.
Dover Corporation and Subsidiaries
Analysis of Cash Flow: Depreciation, Amortization & Acquisition write-offs,
with tax effects
(unaudited) (in millions)
2001 - Three Months 2000 - Three Months 2000 - Full Year
--------------------------------- ----------------------------- -----------------------------
Tax Deductible Tax Deductible Tax Deductible
-------------- -------------- --------------
Total Yes No Tax Total Yes No Tax Total Yes No Tax
EBIT $ 134 $ 42 $ 196 $ 68 $ 851 $ 267
Acquisition related:
Goodwill amortization 13 7 6 2 11 6 5 2 49 24 25 9
Other Amortization 4 5 15
Depreciation 4 4 18
Inventory write-offs 5 2 14
--------------------------------- ----------------------------- -----------------------------
Subtotal other write-offs 13 11 2 5 11 7 4 3 47 38 9 13
Total acquisition write-offs 26 18 8 7 22 13 9 5 96 62 34 22
--------------------------------- ----------------------------- -----------------------------
EBITACQ 160 $ 49 218 $ 73 947 $ 289
------ ------- -------
Other depreciation 32 28 118
Other amortization - - 3
------- ------ --------
EBITDAI 192 246 1,068
======= ====== ========
Inventory write-offs (5) (2) (14)
------- ------ --------
EBITDA $ 187 $ 244 $ 1,054
======= ====== ========
"EBIT" - represents earnings before interest and taxes.
"EBITACQ" - represents earnings before interest, taxes and acquisition
write-offs.
"EBITDAI" - represents earnings before interest, taxes, depreciation,
amortization and inventory write-offs.
"EBITDA" - represents earnings before interest, taxes, depreciation and
amortization.
EBIT, EBITACQ, EBITDAI and EBITDA - all exclude gains (losses) on sale of
businesses and equity investment.
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits for this quarter.
(b) The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated January 18, 2001, furnishing information
under Item 9, regarding a Regulation FD Disclosure.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated January 23, 2001, under Item 5.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated February 7, 2001, under Item 5.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated February 13, 2001, under Item 5.
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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 thereunto duly authorized.
DOVER CORPORATION
Date: April 17, 2000 /s/ David S. Smith
----------------------- -------------------------------------------------
David S, Smith, Chief Financial Officer,
Vice President, Finance
Date: April 17, 2000 /s/ George F. Meserole
----------------------- -------------------------------------------------
George F. Meserole, Chief Accounting Officer,
Vice President and Controller
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