UNITED STATES
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): July 21, 2022
_______________________________
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
(Registrant’s telephone number, including area code)
______________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On July 21, 2022, Dover Corporation ("Dover") issued the Press Release attached hereto as Exhibit 99.1 announcing its results of operations for the quarter ended June 30, 2022.
The information in this Current Report on Form 8-K, including Exhibit 99.1 and 99.2, is being furnished to the Securities and Exchange Commission (the “SEC”) and shall not be deemed to be incorporated by reference into any of Dover’s filings with the SEC under the Securities Act of 1933, as amended.
Item 7.01 Regulation FD Disclosure.
As previously announced, on July 21, 2022, Dover will hold an investor conference call and webcast at 8:00 a.m. Central time (9:00 a.m. Eastern time) to discuss its results of operations for the quarter ended June 30, 2022. A copy of the supplemental presentation materials that will be used during the conference call is furnished as Exhibit 99.2 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished as part of this report:
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | July 21, 2022 | DOVER CORPORATION | ||||||||||||
| (Registrant) | ||||||||||||||
| By: | /s/ Ivonne M. Cabrera | |||||||||||||
| Ivonne M. Cabrera | ||||||||||||||
| Senior Vice President, General Counsel & Secretary | ||||||||||||||
Exhibit 99.1
| Investor Contact: | Media Contact: | ||||
| Jack Dickens | Adrian Sakowicz | ||||
| Senior Director - Investor Relations | Vice President - Communications | ||||
| (630) 743-2566 | (630) 743-5039 | ||||
| jdickens@dovercorp.com | asakowicz@dovercorp.com | ||||
DOVER REPORTS SECOND QUARTER 2022 RESULTS
DOWNERS GROVE, Ill., July 21, 2022 — Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the second quarter ended June 30, 2022.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
| ($ in millions, except per share data) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||||||||||||||||||||||||
| U.S. GAAP | ||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 2,159 | $ | 2,032 | 6 | % | $ | 4,211 | $ | 3,900 | 8 | % | ||||||||||||||||||||||||||
Net earnings | 290 | 265 | 9 | % | 516 | 497 | 4 | % | ||||||||||||||||||||||||||||||
Diluted EPS | 2.00 | 1.82 | 10 | % | 3.56 | 3.43 | 4 | % | ||||||||||||||||||||||||||||||
| Non-GAAP | ||||||||||||||||||||||||||||||||||||||
| Organic revenue change | 7 | % | 8 | % | ||||||||||||||||||||||||||||||||||
Adjusted net earnings 1 | 309 | 299 | 3 | % | 585 | 562 | 4 | % | ||||||||||||||||||||||||||||||
| Adjusted diluted EPS | 2.14 | 2.06 | 4 | % | 4.03 | 3.87 | 4 | % | ||||||||||||||||||||||||||||||
1 Q2 2022 and 2021 adjusted net earnings exclude after tax purchase accounting expenses of $36.0 million and $26.6 million, respectively, and restructuring and other costs of $6.1 million and $8.2 million, respectively. Year-to-date and Q2 2022 also exclude a $22.6 million reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act. Year-to-date 2022 and 2021 adjusted net earnings exclude after tax purchase accounting expenses of $76.8 million and $53.4 million, respectively, and restructuring and other costs of $14.5 million and $11.3 million, respectively.
For the quarter ended June 30, 2022, Dover generated revenue of $2.2 billion, an increase of 6% (+7% organic) compared to the second quarter of the prior year. GAAP net earnings of $290 million increased 9%, and GAAP diluted EPS of $2.00 was up 10%. On an adjusted basis, net earnings of $309 million increased 3% and adjusted diluted EPS of $2.14 was up 4% versus the comparable quarter of the prior year.
For the six months ended June 30, 2022, Dover generated revenue of $4.2 billion, an increase of 8% (+8%% organic) compared to the comparable period of the prior year. GAAP net earnings of $516 million increased 4%, and GAAP diluted EPS of $3.56 was also up 4% year-over-year. On an adjusted basis, net earnings of $585 million increased 4%, and adjusted diluted EPS of $4.03 was also up 4% versus the comparable period 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, “Our team delivered a strong second quarter performance which led to record quarterly revenue and sequential and year-over-year earnings growth, despite a difficult operating environment and significant foreign currency headwinds. Our backlog remains at a historically high level, providing a good line of sight for operational execution while new order bookings normalize as our lead times improve.
“Input shortages and the COVID-19 lockdowns in China negatively impacted shipment volumes and fixed cost absorption across multiple businesses. Despite these headwinds, our operating margin improved sequentially in the quarter, driven by cost controls, overall strong volume and meaningfully improving price-cost dynamics, which we expect to drive profitability in the second half of the year.
“Our strong balance sheet supports our disciplined capital allocation initiatives. We are investing in capacity expansions and productivity improvements across many operating companies to capture secular revenue growth opportunities and continue driving efficiencies. The recently-announced Malema acquisition closed on July 1 and we continue our pursuit of attractive bolt-on acquisitions. We also repurchased $85 million of our common stock in the second quarter and will continue to proactively evaluate various capital deployment alternatives through the remainder of the year.
“Our strong backlog, constructive demand and execution playbook tailored to various operating scenarios position us well to deliver revenue and earnings growth amidst continuing economic uncertainty. We are maintaining our 2022 adjusted full-year guidance.”
FULL YEAR 2022 GUIDANCE:
In 2022, Dover expects to generate GAAP EPS in the range of $7.44 to $7.64 (adjusted EPS of $8.45 to $8.65), based on full year revenue growth of 8% to 10% (8% to 10% on an organic basis).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its second quarter and year-to-date 2022 results at 9:00 A.M. Eastern Time (8:00 A.M. Central Time) on Thursday, July 21, 2022. 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 $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, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, other general economic conditions and conditions in the particular markets in which we operate, the impact on global or a regional economy due to the outbreak or escalation of hostilities or war, 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, 2021, 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 2022
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Revenue | $ | 2,158,715 | $ | 2,031,676 | $ | 4,210,616 | $ | 3,899,577 | |||||||||||||||
| Cost of goods and services | 1,377,432 | 1,259,504 | 2,686,139 | 2,405,857 | |||||||||||||||||||
| Gross profit | 781,283 | 772,172 | 1,524,477 | 1,493,720 | |||||||||||||||||||
| Selling, general, and administrative expenses | 424,433 | 428,042 | 868,276 | 837,040 | |||||||||||||||||||
| Operating earnings | 356,850 | 344,130 | 656,201 | 656,680 | |||||||||||||||||||
| Interest expense | 26,989 | 26,661 | 53,541 | 53,484 | |||||||||||||||||||
| Interest income | (949) | (942) | (1,724) | (1,622) | |||||||||||||||||||
| Other income, net | (4,546) | (4,933) | (6,675) | (7,776) | |||||||||||||||||||
| Earnings before provision for income taxes | 335,356 | 323,344 | 611,059 | 612,594 | |||||||||||||||||||
| Provision for income taxes | 45,738 | 58,836 | 95,288 | 115,317 | |||||||||||||||||||
| Net earnings | $ | 289,618 | $ | 264,508 | $ | 515,771 | $ | 497,277 | |||||||||||||||
| Net earnings per share: | |||||||||||||||||||||||
| Basic | $ | 2.01 | $ | 1.84 | $ | 3.58 | $ | 3.46 | |||||||||||||||
| Diluted | $ | 2.00 | $ | 1.82 | $ | 3.56 | $ | 3.43 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 143,832 | 143,941 | 143,959 | 143,854 | |||||||||||||||||||
| Diluted | 144,669 | 145,118 | 144,998 | 145,040 | |||||||||||||||||||
| Dividends paid per common share | $ | 0.50 | $ | 0.495 | $ | 1.00 | $ | 0.99 | |||||||||||||||
| * Per share data may be impacted by rounding. | |||||||||||||||||||||||
IS - 1
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| REVENUE | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 487,647 | $ | 514,436 | $ | 1,002,083 | $ | 428,127 | $ | 442,091 | $ | 870,218 | $ | 447,798 | $ | 462,811 | $ | 1,780,827 | ||||||||||||||
| Clean Energy & Fueling | 458,395 | 494,075 | 952,470 | 389,678 | 437,042 | 826,720 | 410,561 | 410,872 | 1,648,153 | |||||||||||||||||||||||
| Imaging & Identification | 272,255 | 275,951 | 548,206 | 284,328 | 294,076 | 578,404 | 292,535 | 292,428 | 1,163,367 | |||||||||||||||||||||||
| Pumps & Process Solutions | 435,195 | 441,127 | 876,322 | 394,377 | 428,701 | 823,078 | 438,240 | 447,316 | 1,708,634 | |||||||||||||||||||||||
| Climate & Sustainability Technologies | 399,078 | 434,164 | 833,242 | 372,077 | 430,506 | 802,583 | 429,425 | 376,167 | 1,608,175 | |||||||||||||||||||||||
| Intersegment eliminations | (669) | (1,038) | (1,707) | (686) | (740) | (1,426) | (290) | (359) | (2,075) | |||||||||||||||||||||||
| Total consolidated revenue | $ | 2,051,901 | $ | 2,158,715 | $ | 4,210,616 | $ | 1,867,901 | $ | 2,031,676 | $ | 3,899,577 | $ | 2,018,269 | $ | 1,989,235 | $ | 7,907,081 | ||||||||||||||
| NET EARNINGS | ||||||||||||||||||||||||||||||||
| Segment Earnings: | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 71,130 | $ | 81,671 | $ | 152,801 | $ | 76,684 | $ | 71,255 | $ | 147,939 | $ | 67,376 | $ | 62,537 | $ | 277,852 | ||||||||||||||
Clean Energy & Fueling | 72,962 | 99,034 | 171,996 | 79,572 | 93,430 | 173,002 | 80,101 | 74,083 | 327,186 | |||||||||||||||||||||||
| Imaging & Identification | 58,598 | 61,392 | 119,990 | 63,618 | 66,565 | 130,183 | 70,635 | 66,114 | 266,932 | |||||||||||||||||||||||
| Pumps & Process Solutions | 146,617 | 138,048 | 284,665 | 128,895 | 146,759 | 275,654 | 150,275 | 149,664 | 575,593 | |||||||||||||||||||||||
Climate & Sustainability Technologies | 53,609 | 64,181 | 117,790 | 43,475 | 56,905 | 100,380 | 49,734 | 35,403 | 185,517 | |||||||||||||||||||||||
| Total segment earnings | 402,916 | 444,326 | 847,242 | 392,244 | 434,914 | 827,158 | 418,121 | 387,801 | 1,633,080 | |||||||||||||||||||||||
Purchase accounting expenses 1 | 53,286 | 47,019 | 100,305 | 35,516 | 35,162 | 70,678 | 35,587 | 35,715 | 141,980 | |||||||||||||||||||||||
Restructuring and other costs (benefits) 2 | 10,552 | 7,944 | 18,496 | 4,162 | 10,779 | 14,941 | (3,201) | 26,696 | 38,436 | |||||||||||||||||||||||
Loss (gain) on dispositions 3 | 194 | — | 194 | — | — | — | — | (206,338) | (206,338) | |||||||||||||||||||||||
Corporate expense / other 4 | 37,404 | 27,967 | 65,371 | 37,173 | 39,910 | 77,083 | 33,249 | 45,966 | 156,298 | |||||||||||||||||||||||
| Interest expense | 26,552 | 26,989 | 53,541 | 26,823 | 26,661 | 53,484 | 26,433 | 26,402 | 106,319 | |||||||||||||||||||||||
| Interest income | (775) | (949) | (1,724) | (680) | (942) | (1,622) | (1,466) | (1,353) | (4,441) | |||||||||||||||||||||||
| Earnings before provision for income taxes | 275,703 | 335,356 | 611,059 | 289,250 | 323,344 | 612,594 | 327,519 | 460,713 | 1,400,826 | |||||||||||||||||||||||
| Provision for income taxes | 49,550 | 45,738 | 95,288 | 56,481 | 58,836 | 115,317 | 63,763 | 97,928 | 277,008 | |||||||||||||||||||||||
| Net earnings | $ | 226,153 | $ | 289,618 | $ | 515,771 | $ | 232,769 | $ | 264,508 | $ | 497,277 | $ | 263,756 | $ | 362,785 | $ | 1,123,818 | ||||||||||||||
| SEGMENT EARNINGS MARGIN | ||||||||||||||||||||||||||||||||
| Engineered Products | 14.6% | 15.9% | 15.2% | 17.9% | 16.1% | 17.0% | 15.0% | 13.5% | 15.6% | |||||||||||||||||||||||
Clean Energy & Fueling | 15.9% | 20.0% | 18.1% | 20.4% | 21.4% | 20.9% | 19.5% | 18.0% | 19.9% | |||||||||||||||||||||||
| Imaging & Identification | 21.5% | 22.2% | 21.9% | 22.4% | 22.6% | 22.5% | 24.1% | 22.6% | 22.9% | |||||||||||||||||||||||
| Pumps & Process Solutions | 33.7% | 31.3% | 32.5% | 32.7% | 34.2% | 33.5% | 34.3% | 33.5% | 33.7% | |||||||||||||||||||||||
Climate & Sustainability Technologies | 13.4% | 14.8% | 14.1% | 11.7% | 13.2% | 12.5% | 11.6% | 9.4% | 11.5% | |||||||||||||||||||||||
| Total segment earnings margin | 19.6% | 20.6% | 20.1% | 21.0% | 21.4% | 21.2% | 20.7% | 19.5% | 20.7% | |||||||||||||||||||||||
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 (benefits) relate to actions taken for employee reductions, facility consolidations and site closures, product line exits, and other asset charges. | ||||||||||||||||||||||||||||||||
3 Loss (gain) on dispositions include working capital adjustments related to dispositions. | ||||||||||||||||||||||||||||||||
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 overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters. | ||||||||||||||||||||||||||||||||
IS - 2
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
| Earnings Per Share | ||||||||||||||||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| Net earnings per share: | ||||||||||||||||||||||||||||||||
| Basic | $ | 1.57 | $ | 2.01 | $ | 3.58 | $ | 1.62 | $ | 1.84 | $ | 3.46 | $ | 1.83 | $ | 2.52 | $ | 7.81 | ||||||||||||||
| Diluted | $ | 1.56 | $ | 2.00 | $ | 3.56 | $ | 1.61 | $ | 1.82 | $ | 3.43 | $ | 1.81 | $ | 2.49 | $ | 7.74 | ||||||||||||||
| Net earnings and weighted average shares used in calculated earnings per share amounts are as follows: | ||||||||||||||||||||||||||||||||
| Net earnings | $ | 226,153 | $ | 289,618 | $ | 515,771 | $ | 232,769 | $ | 264,508 | $ | 497,277 | $ | 263,756 | $ | 362,785 | $ | 1,123,818 | ||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||||||||||
| Basic | 144,087 | 143,832 | 143,959 | 143,765 | 143,941 | 143,854 | 143,976 | 144,005 | 143,923 | |||||||||||||||||||||||
| Diluted | 145,329 | 144,669 | 144,998 | 144,938 | 145,118 | 145,040 | 145,440 | 145,460 | 145,273 | |||||||||||||||||||||||
| * Per share data may be impacted by rounding. | ||||||||||||||||||||||||||||||||
IS - 3
DOVER CORPORATION
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| Adjusted net earnings: | ||||||||||||||||||||||||||||||||
| Net earnings | $ | 226,153 | $ | 289,618 | $ | 515,771 | $ | 232,769 | $ | 264,508 | $ | 497,277 | $ | 263,756 | $ | 362,785 | $ | 1,123,818 | ||||||||||||||
Purchase accounting expenses, pre-tax 1 | 53,286 | 47,019 | 100,305 | 35,516 | 35,162 | 70,678 | 35,587 | 35,715 | 141,980 | |||||||||||||||||||||||
Purchase accounting expenses, tax impact 2 | (12,538) | (11,013) | (23,551) | (8,720) | (8,571) | (17,291) | (8,700) | (8,763) | (34,754) | |||||||||||||||||||||||
Restructuring and other costs (benefits), pre-tax 3 | 10,552 | 7,944 | 18,496 | 4,162 | 10,779 | 14,941 | (3,201) | 26,696 | 38,436 | |||||||||||||||||||||||
Restructuring and other costs (benefits), tax impact 2 | (2,191) | (1,803) | (3,994) | (1,031) | (2,597) | (3,628) | 902 | (4,610) | (7,336) | |||||||||||||||||||||||
Loss (gain) on dispositions, pre-tax 4 | 194 | — | 194 | — | — | — | — | (206,338) | (206,338) | |||||||||||||||||||||||
Loss (gain) on dispositions, tax-impact 2 | (27) | — | (27) | — | — | — | — | 53,218 | 53,218 | |||||||||||||||||||||||
Tax Cuts and Jobs Act 5 | — | (22,579) | (22,579) | — | — | — | — | — | — | |||||||||||||||||||||||
Adjusted net earnings | $ | 275,429 | $ | 309,186 | $ | 584,615 | $ | 262,696 | $ | 299,281 | $ | 561,977 | $ | 288,344 | $ | 258,703 | $ | 1,109,024 | ||||||||||||||
| Adjusted diluted net earnings per share: | ||||||||||||||||||||||||||||||||
| Diluted net earnings per share | $ | 1.56 | $ | 2.00 | $ | 3.56 | $ | 1.61 | $ | 1.82 | $ | 3.43 | $ | 1.81 | $ | 2.49 | $ | 7.74 | ||||||||||||||
Purchase accounting expenses, pre-tax 1 | 0.37 | 0.33 | 0.69 | 0.25 | 0.24 | 0.49 | 0.24 | 0.25 | 0.98 | |||||||||||||||||||||||
Purchase accounting expenses, tax impact 2 | (0.09) | (0.08) | (0.16) | (0.06) | (0.06) | (0.12) | (0.06) | (0.06) | (0.24) | |||||||||||||||||||||||
Restructuring and other costs (benefits), pre-tax 3 | 0.07 | 0.05 | 0.13 | 0.03 | 0.07 | 0.10 | (0.02) | 0.18 | 0.26 | |||||||||||||||||||||||
Restructuring and other costs (benefits), tax impact 2 | (0.02) | (0.01) | (0.03) | (0.01) | (0.02) | (0.03) | 0.01 | (0.03) | (0.05) | |||||||||||||||||||||||
Loss (gain) on dispositions, pre-tax 4 | — | — | — | — | — | — | — | (1.42) | (1.42) | |||||||||||||||||||||||
Loss (gain) on dispositions, tax-impact 2 | — | — | — | — | — | — | — | 0.37 | 0.37 | |||||||||||||||||||||||
Tax Cuts and Jobs Act 5 | — | (0.16) | (0.16) | — | — | — | — | — | — | |||||||||||||||||||||||
Adjusted diluted net earnings per share | $ | 1.90 | $ | 2.14 | $ | 4.03 | $ | 1.81 | $ | 2.06 | $ | 3.87 | $ | 1.98 | $ | 1.78 | $ | 7.63 | ||||||||||||||
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 Q2 YTD 2022 include $12,487, $7,158, and $19,645 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 (benefits) relate to actions taken for employee reductions, facility consolidations and site closures, product line exits, and other asset charges. Q1 and Q2 YTD 2022 include $5,457 of non-cash foreign currency translation losses reclassified to earnings included within restructuring and other costs of $2,117 related to write-off of assets due to an exit from certain Latin America countries for our Climate & Sustainability Technologies segment. Q4 and FY 2021 for our Climate & Sustainability Technologies segment include a $12,073 other than temporary impairment charge related to an equity method investment and a $6,072 write-off of assets incurred in connection with an exit from certain Latin America countries. Q3 and FY 2021 include a $9,078 payment received for previously incurred restructuring costs related to a product line exit in our Engineered Products segment. | ||||||||||||||||||||||||||||||||
4 Q1 2022 represents working capital adjustments related to the disposition of UB and the RWB equity method investment in Q4 2021. Q4 and FY2021 represent a $181,615 gain on disposition of UB in our Climate & Sustainability Technologies segment and a $24,723 gain on disposition of our RWB equity method investment in our Engineered Products segment. | ||||||||||||||||||||||||||||||||
5 Q2 and Q2 YTD 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. | ||||||||||||||||||||||||||||||||
IS - 4
DOVER CORPORATION
QUARTERLY ADJUSTED SEGMENT EBITDA (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| ADJUSTED SEGMENT EBITDA | ||||||||||||||||||||||||||||||||
| Engineered Products: | ||||||||||||||||||||||||||||||||
| Segment earnings | $ | 71,130 | $ | 81,671 | $ | 152,801 | $ | 76,684 | $ | 71,255 | $ | 147,939 | $ | 67,376 | $ | 62,537 | $ | 277,852 | ||||||||||||||
Other depreciation and amortization 1 | 7,274 | 6,799 | 14,073 | 6,708 | 5,814 | 12,522 | 7,132 | 7,382 | 27,036 | |||||||||||||||||||||||
Adjusted segment EBITDA 2 | 78,404 | 88,470 | 166,874 | 83,392 | 77,069 | 160,461 | 74,508 | 69,919 | 304,888 | |||||||||||||||||||||||
Adjusted segment EBITDA margin 2 | 16.1 % | 17.2 % | 16.7 % | 19.5 % | 17.4 % | 18.4 % | 16.6 % | 15.1 % | 17.1 % | |||||||||||||||||||||||
| Clean Energy & Fueling: | ||||||||||||||||||||||||||||||||
Segment earnings 3 | $ | 72,962 | $ | 99,034 | $ | 171,996 | $ | 79,572 | $ | 93,430 | $ | 173,002 | $ | 80,101 | $ | 74,083 | $ | 327,186 | ||||||||||||||
Other depreciation and amortization 1 | 8,466 | 6,533 | 14,999 | 6,489 | 6,571 | 13,060 | 6,411 | 6,371 | 25,842 | |||||||||||||||||||||||
Adjusted segment EBITDA 2 | 81,428 | 105,567 | 186,995 | 86,061 | 100,001 | 186,062 | 86,512 | 80,454 | 353,028 | |||||||||||||||||||||||
Adjusted segment EBITDA margin 2 | 17.8 % | 21.4 % | 19.6 % | 22.1 % | 22.9 % | 22.5 % | 21.1 % | 19.6 % | 21.4 % | |||||||||||||||||||||||
| Imaging & Identification: | ||||||||||||||||||||||||||||||||
| Segment earnings | $ | 58,598 | $ | 61,392 | $ | 119,990 | $ | 63,618 | $ | 66,565 | $ | 130,183 | $ | 70,635 | $ | 66,114 | $ | 266,932 | ||||||||||||||
Other depreciation and amortization 1 | 3,497 | 3,496 | 6,993 | 3,274 | 3,544 | 6,818 | 3,896 | 3,475 | 14,189 | |||||||||||||||||||||||
Adjusted segment EBITDA 2 | 62,095 | 64,888 | 126,983 | 66,892 | 70,109 | 137,001 | 74,531 | 69,589 | 281,121 | |||||||||||||||||||||||
Adjusted segment EBITDA margin 2 | 22.8 % | 23.5 % | 23.2 % | 23.5 % | 23.8 % | 23.7 % | 25.5 % | 23.8 % | 24.2 % | |||||||||||||||||||||||
| Pumps & Process Solutions: | ||||||||||||||||||||||||||||||||
| Segment earnings | $ | 146,617 | $ | 138,048 | $ | 284,665 | $ | 128,895 | $ | 146,759 | $ | 275,654 | $ | 150,275 | $ | 149,664 | $ | 575,593 | ||||||||||||||
Other depreciation and amortization 1 | 9,922 | 9,787 | 19,709 | 9,670 | 9,638 | 19,308 | 9,832 | 10,132 | 39,272 | |||||||||||||||||||||||
Adjusted segment EBITDA 2 | 156,539 | 147,835 | 304,374 | 138,565 | 156,397 | 294,962 | 160,107 | 159,796 | 614,865 | |||||||||||||||||||||||
Adjusted segment EBITDA margin 2 | 36.0 % | 33.5 % | 34.7 % | 35.1 % | 36.5 % | 35.8 % | 36.5 % | 35.7 % | 36.0 % | |||||||||||||||||||||||
| Climate & Sustainability Technologies: | ||||||||||||||||||||||||||||||||
| Segment earnings | $ | 53,609 | $ | 64,181 | $ | 117,790 | $ | 43,475 | $ | 56,905 | $ | 100,380 | $ | 49,734 | $ | 35,403 | $ | 185,517 | ||||||||||||||
Other depreciation and amortization 1 | 6,495 | 6,443 | 12,938 | 6,349 | 6,682 | 13,031 | 7,019 | 6,937 | 26,987 | |||||||||||||||||||||||
Adjusted segment EBITDA 2 | 60,104 | 70,624 | 130,728 | 49,824 | 63,587 | 113,411 | 56,753 | 42,340 | 212,504 | |||||||||||||||||||||||
Adjusted segment EBITDA margin 2 | 15.1 % | 16.3 % | 15.7 % | 13.4 % | 14.8 % | 14.1 % | 13.2 % | 11.3 % | 13.2 % | |||||||||||||||||||||||
| Total Segments: | ||||||||||||||||||||||||||||||||
Segment earnings 2, 3, 4 | $ | 402,916 | $ | 444,326 | $ | 847,242 | $ | 392,244 | $ | 434,914 | $ | 827,158 | $ | 418,121 | $ | 387,801 | $ | 1,633,080 | ||||||||||||||
Other depreciation and amortization 1 | 35,654 | 33,058 | 68,712 | 32,490 | 32,249 | 64,739 | 34,290 | 34,297 | 133,326 | |||||||||||||||||||||||
Adjusted segment EBITDA 2 | 438,570 | 477,384 | 915,954 | 424,734 | 467,163 | 891,897 | 452,411 | 422,098 | 1,766,406 | |||||||||||||||||||||||
Adjusted segment EBITDA margin 2 | 21.4 % | 22.1 % | 21.8 % | 22.7 % | 23.0 % | 22.9 % | 22.4 % | 21.2 % | 22.3 % | |||||||||||||||||||||||
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 Q1, Q2, and Q2 YTD 2022 exclude $12,097, $6,898, and $18,995 of amortization of inventory step-up, respectively, related to the Q4 2021 acquisitions within our Clean Energy & Fueling segment. | ||||||||||||||||||||||||||||||||
4 Refer to Quarterly Segment Information section for reconciliation of total segment earnings to net earnings. | ||||||||||||||||||||||||||||||||
IS - 5
DOVER CORPORATION
QUARTERLY ADJUSTED SEGMENT EBITDA TO NET EARNINGS RECONCILIATION (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| Net earnings: | ||||||||||||||||||||||||||||||||
Adjusted segment EBITDA1: | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 78,404 | $ | 88,470 | $ | 166,874 | $ | 83,392 | $ | 77,069 | $ | 160,461 | $ | 74,508 | $ | 69,919 | $ | 304,888 | ||||||||||||||
| Clean Energy & Fueling | 81,428 | 105,567 | 186,995 | 86,061 | 100,001 | 186,062 | 86,512 | 80,454 | 353,028 | |||||||||||||||||||||||
| Imaging & Identification | 62,095 | 64,888 | 126,983 | 66,892 | 70,109 | 137,001 | 74,531 | 69,589 | 281,121 | |||||||||||||||||||||||
| Pumps & Process Solutions | 156,539 | 147,835 | 304,374 | 138,565 | 156,397 | 294,962 | 160,107 | 159,796 | 614,865 | |||||||||||||||||||||||
| Climate & Sustainability Technologies | 60,104 | 70,624 | 130,728 | 49,824 | 63,587 | 113,411 | 56,753 | 42,340 | 212,504 | |||||||||||||||||||||||
Total adjusted segment EBITDA 1 | 438,570 | 477,384 | 915,954 | 424,734 | 467,163 | 891,897 | 452,411 | 422,098 | 1,766,406 | |||||||||||||||||||||||
Less: Other depreciation and amortization 2 | 35,654 | 33,058 | 68,712 | 32,490 | 32,249 | 64,739 | 34,290 | 34,297 | 133,326 | |||||||||||||||||||||||
Total segment earnings 1 | 402,916 | 444,326 | 847,242 | 392,244 | 434,914 | 827,158 | 418,121 | 387,801 | 1,633,080 | |||||||||||||||||||||||
Purchase accounting expenses 3 | 53,286 | 47,019 | 100,305 | 35,516 | 35,162 | 70,678 | 35,587 | 35,715 | 141,980 | |||||||||||||||||||||||
Restructuring and other costs (benefits) 4 | 10,552 | 7,944 | 18,496 | 4,162 | 10,779 | 14,941 | (3,201) | 26,696 | 38,436 | |||||||||||||||||||||||
Loss (gain) on dispositions 5 | 194 | — | 194 | — | — | — | — | (206,338) | (206,338) | |||||||||||||||||||||||
Corporate expense / other 6 | 37,404 | 27,967 | 65,371 | 37,173 | 39,910 | 77,083 | 33,249 | 45,966 | 156,298 | |||||||||||||||||||||||
| Interest expense | 26,552 | 26,989 | 53,541 | 26,823 | 26,661 | 53,484 | 26,433 | 26,402 | 106,319 | |||||||||||||||||||||||
| Interest income | (775) | (949) | (1,724) | (680) | (942) | (1,622) | (1,466) | (1,353) | (4,441) | |||||||||||||||||||||||
| Earnings before provision for income taxes | 275,703 | 335,356 | 611,059 | 289,250 | 323,344 | 612,594 | 327,519 | 460,713 | 1,400,826 | |||||||||||||||||||||||
| Provision for income taxes | 49,550 | 45,738 | 95,288 | 56,481 | 58,836 | 115,317 | 63,763 | 97,928 | 277,008 | |||||||||||||||||||||||
| Net earnings | $ | 226,153 | $ | 289,618 | $ | 515,771 | $ | 232,769 | $ | 264,508 | $ | 497,277 | $ | 263,756 | $ | 362,785 | $ | 1,123,818 | ||||||||||||||
1 Refer to Non-GAAP Disclosures section for definition. | ||||||||||||||||||||||||||||||||
2 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. | ||||||||||||||||||||||||||||||||
3 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. | ||||||||||||||||||||||||||||||||
4 Restructuring and other costs (benefits) relate to actions taken for employee reductions, facility consolidations and site closures, product line exits, and other asset charges. | ||||||||||||||||||||||||||||||||
5 Loss (gain) on dispositions include working capital adjustments related to dispositions. | ||||||||||||||||||||||||||||||||
6 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 overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters. | ||||||||||||||||||||||||||||||||
IS - 6
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
| 2022 | |||||||||||
| Q2 | Q2 YTD | ||||||||||
| Organic | |||||||||||
| Engineered Products | 18.6 | % | 16.6 | % | |||||||
Clean Energy & Fueling | (1.1) | % | (0.5) | % | |||||||
| Imaging & Identification | (0.9) | % | (1.0) | % | |||||||
| Pumps & Process Solutions | 6.8 | % | 9.6 | % | |||||||
Climate & Sustainability Technologies | 11.4 | % | 14.2 | % | |||||||
| Total Organic | 7.5 | % | 8.4 | % | |||||||
| Acquisitions | 4.1 | % | 4.3 | % | |||||||
| Dispositions | (1.7) | % | (1.7) | % | |||||||
| Currency translation | (3.6) | % | (3.0) | % | |||||||
| Total* | 6.3 | % | 8.0 | % | |||||||
* Totals may be impacted by rounding.
| 2022 | |||||||||||
| Q2 | Q2 YTD | ||||||||||
| Organic | |||||||||||
| United States | 12.5 | % | 10.7 | % | |||||||
| Other Americas | (17.7) | % | (5.5) | % | |||||||
| Europe | 11.8 | % | 9.0 | % | |||||||
| Asia | 0.4 | % | 8.6 | % | |||||||
| Other | (14.4) | % | (2.4) | % | |||||||
| Total Organic | 7.5 | % | 8.4 | % | |||||||
| Acquisitions | 4.1 | % | 4.3 | % | |||||||
| Dispositions | (1.7) | % | (1.7) | % | |||||||
| Currency translation | (3.6) | % | (3.0) | % | |||||||
| Total* | 6.3 | % | 8.0 | % | |||||||
* Totals may be impacted by rounding.
| Adjusted EPS Guidance Reconciliation | |||||||||||
| Range | |||||||||||
| 2022 Guidance for Earnings per Share (GAAP) | $ | 7.44 | $ | 7.64 | |||||||
| Purchase accounting expenses, net | 1.01 | ||||||||||
| Restructuring and other costs, net | 0.16 | ||||||||||
| Tax Cuts and Jobs Act | (0.16) | ||||||||||
| 2022 Guidance for Adjusted Earnings per Share (Non-GAAP) | $ | 8.45 | $ | 8.65 | |||||||
* Per share data and totals may be impacted by rounding.
IS - 7
DOVER CORPORATION
QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)
(unaudited)(in thousands)
Quarterly Cash Flow
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| Net Cash Flows Provided By (Used In): | ||||||||||||||||||||||||||||||||
| Operating activities | $ | 23,683 | $ | 178,773 | $ | 202,456 | $ | 177,184 | $ | 260,073 | $ | 437,257 | $ | 351,329 | $ | 327,279 | $ | 1,115,865 | ||||||||||||||
| Investing activities | (46,963) | (68,890) | (115,853) | (29,572) | (121,631) | (151,203) | (135,439) | (706,111) | (992,753) | |||||||||||||||||||||||
| Financing activities | (75,204) | 120,469 | 45,265 | (124,239) | (75,949) | (200,188) | (74,610) | 24,918 | (249,880) | |||||||||||||||||||||||
Quarterly Free Cash Flow (Non-GAAP)
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| Cash flow from operating activities | $ | 23,683 | $ | 178,773 | $ | 202,456 | $ | 177,184 | $ | 260,073 | $ | 437,257 | $ | 351,329 | $ | 327,279 | $ | 1,115,865 | ||||||||||||||
| Less: Capital expenditures | (50,381) | (50,196) | (100,577) | (31,260) | (41,971) | (73,231) | (47,926) | (50,308) | (171,465) | |||||||||||||||||||||||
| Free cash flow | $ | (26,698) | $ | 128,577 | $ | 101,879 | $ | 145,924 | $ | 218,102 | $ | 364,026 | $ | 303,403 | $ | 276,971 | $ | 944,400 | ||||||||||||||
| Cash flow from operating activities as a percentage of revenue | 1.2 % | 8.3 % | 4.8 % | 9.5 % | 12.8 % | 11.2 % | 17.4 % | 16.5 % | 14.1 % | |||||||||||||||||||||||
| Cash flow from operating activities as a percentage of adjusted net earnings | 8.6 % | 57.8 % | 34.6 % | 67.4 % | 86.9 % | 77.8 % | 121.8 % | 126.5 % | 100.6 % | |||||||||||||||||||||||
| Free cash flow as a percentage of revenue | -1.3 % | 6.0 % | 2.4 % | 7.8 % | 10.7 % | 9.3 % | 15.0 % | 13.9 % | 11.9 % | |||||||||||||||||||||||
| Free cash flow as a percentage of adjusted net earnings | -9.7 % | 41.6 % | 17.4 % | 55.5 % | 72.9 % | 64.8 % | 105.2 % | 107.1 % | 85.2 % | |||||||||||||||||||||||
IS - 8
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2021 | ||||||||||||||||||||||||
| BOOKINGS | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 541,035 | $ | 452,668 | $ | 993,703 | $ | 528,310 | $ | 497,200 | $ | 1,025,510 | $ | 502,767 | $ | 585,452 | $ | 2,113,729 | ||||||||||||||
Clean Energy & Fueling | 501,491 | 487,861 | 989,352 | 422,668 | 453,146 | 875,814 | 467,821 | 398,844 | 1,742,479 | |||||||||||||||||||||||
| Imaging & Identification | 307,104 | 292,136 | 599,240 | 293,614 | 299,608 | 593,222 | 293,782 | 303,400 | 1,190,404 | |||||||||||||||||||||||
| Pumps & Process Solutions | 459,790 | 471,693 | 931,483 | 551,365 | 521,010 | 1,072,375 | 490,581 | 460,105 | 2,023,061 | |||||||||||||||||||||||
Climate & Sustainability Technologies | 444,852 | 403,574 | 848,426 | 537,326 | 606,545 | 1,143,871 | 540,280 | 632,849 | 2,317,000 | |||||||||||||||||||||||
| Intersegment eliminations | (2,295) | (1,207) | (3,502) | (863) | (498) | (1,361) | (407) | (290) | (2,058) | |||||||||||||||||||||||
| Total consolidated bookings | $ | 2,251,977 | $ | 2,106,725 | $ | 4,358,702 | $ | 2,332,420 | $ | 2,377,011 | $ | 4,709,431 | $ | 2,294,824 | $ | 2,380,360 | $ | 9,384,615 | ||||||||||||||
| BACKLOG | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 830,135 | $ | 759,589 | $ | 562,557 | $ | 613,517 | $ | 662,834 | $ | 785,085 | ||||||||||||||||||||
Clean Energy & Fueling | 426,342 | 411,350 | 238,822 | 256,497 | 312,176 | 383,572 | ||||||||||||||||||||||||||
| Imaging & Identification | 243,411 | 255,255 | 198,556 | 206,125 | 204,766 | 212,098 | ||||||||||||||||||||||||||
| Pumps & Process Solutions | 704,935 | 715,646 | 539,097 | 634,477 | 682,415 | 688,931 | ||||||||||||||||||||||||||
Climate & Sustainability Technologies | 1,218,155 | 1,186,180 | 677,309 | 854,188 | 964,233 | 1,174,479 | ||||||||||||||||||||||||||
| Intersegment eliminations | (1,756) | (1,839) | (544) | (262) | (252) | (225) | ||||||||||||||||||||||||||
| Total consolidated backlog | $ | 3,421,222 | $ | 3,326,181 | $ | 2,215,797 | $ | 2,564,542 | $ | 2,826,172 | $ | 3,243,940 | ||||||||||||||||||||
Bookings Growth Factors
| 2022 | |||||||||||
| Q2 | Q2 YTD | ||||||||||
| Organic | |||||||||||
| Engineered Products | (8.3) | % | (2.2) | % | |||||||
Clean Energy & Fueling | (4.6) | % | (3.7) | % | |||||||
| Imaging & Identification | 2.6 | % | 5.1 | % | |||||||
| Pumps & Process Solutions | (6.5) | % | (10.4) | % | |||||||
Climate & Sustainability Technologies | (24.1) | % | (17.2) | % | |||||||
| Total Organic | (9.9) | % | (7.1) | % | |||||||
| Acquisitions | 3.2 | % | 3.8 | % | |||||||
| Dispositions | (1.8) | % | (1.6) | % | |||||||
| Currency translation | (2.9) | % | (2.5) | % | |||||||
| Total* | (11.4) | % | (7.4) | % | |||||||
* Totals may be impacted by rounding.
IS - 9
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, 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, 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, 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 represents diluted EPS adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, and gain/loss on dispositions.
Total segment earnings is defined as the sum of earnings before purchase accounting expenses, restructuring and other costs/benefits, 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. 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.
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 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. We do not provide a reconciliation of forward-looking organic revenue to the most directly comparable GAAP financial measure 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.
IS - 10
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.
IS - 11
Earnings Conference Call Second Quarter 2022 July 21, 2022 – 8:00am CT Exhibit 99.2
2 Forward-Looking Statements and Non-GAAP Measures We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties and risks, including the impacts of coronavirus (COVID-19) on the global economy and on our customers, suppliers, employees, operations, business, liquidity and cash flow, supply chain constraints and labor shortages that could result in production stoppages, and inflation in material input costs and freight logistics. We caution everyone to be guided in their analysis of Dover Corporation by referring to the documents we file from time to time with the SEC, including our Annual Report on Form 10-K, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements. We would also direct your attention to our website, dovercorporation.com, where considerably more information can be found. In addition to financial measures based on U.S. GAAP, Dover provides supplemental non-GAAP financial information. Management uses non-GAAP measures in addition to GAAP measures to understand and compare operating results across periods, make resource allocation decisions, and for forecasting and other purposes. Management believes these non-GAAP measures reflect results in a manner that enables, in many instances, more meaningful analysis of trends and facilitates comparison of results across periods and to those of peer companies. These non-GAAP financial measures have no standardized meaning presented in U.S. GAAP and may not be comparable to other similarly titled measures used by other companies due to potential differences between the companies in calculations. The use of these non-GAAP measures has limitations and they should not be considered as substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP. Reconciliations and definitions are included either in this presentation or in Dover’s earnings release and investor supplement for the second quarter, which are available on Dover’s website. We do not provide a reconciliation of forward-looking organic revenue to the most directly comparable GAAP financial measure 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.
3 Free Cash Flow(1) Sequential improvement of 100 bps vs. Q1 ‘22 41.6% of adjusted net earnings(1) All-in and organic(1) revenue growth: 8% - 10% Adjusted diluted EPS(1): $8.45 - $8.65 Organic Revenue(1) Book-to-bill(2): 0.98 (>1 excluding $74M terminated contract(4))Organic growth in three of five segments Adj. Diluted EPS(1) Adjusted diluted EPS(1) includes $0.03(3) of discrete tax benefits +7% Y-o-Y Organic Bookings(2) -10% Y-o-Y Segment Earnings(1) % -80 bps Y-o-Y to 20.6% 6.0% of Revenue +4% Y-o-Y to $2.14 Backlog(2) +30% Y-o-Y to $3.3B FY ’22 GuidancePortfolio Activity and Capital Deployment Closed Malema Engineering Corp. acquisition on July 1 Repurchased $85M of stock in Q2 +3% vs. beginning of year backlog(2) (1) Non-GAAP measures (definitions and/or reconciliations in appendix) (2) See performance measures definitions in appendix (3) Comprised of $4M in discrete tax benefits in Q2 ’22 (down from $11M in Q2 ’21) (4) Relates to a reversal of a previously-booked order in beverage can-making slated for 2023 completion due to customer financing limitations Q2 2022 Performance Highlights
4 Summary Corporate Q2 Results Q2 2022 Highlights and Comments Revenue change (Y-o-Y) All-in Organic(1) 6% 7% Y-o-Y organic growth in three of five segments Q2 FX impact: -4%, higher than expected for Q2; acquisitions (net of divestitures) +2% Bookings change (Y-o-Y) All-in(2) Organic(2) -11% -10% Q2 book-to-bill(2): 0.98 (>1 excluding $74M order reversal in beverage can making) Backlog(2) +30% Y-o-Y; up across all five segments Segment Earnings(1) Margin % Y-o-Y bps Δ 20.6% -80 bps Up $9M Y-o-Y on higher volumes, partially offset by supply chain constraints and FX 100 bps sequential improvement Earnings Reported Adjusted(1) $290M $309M Reported Q2 Y-o-Y change: +9% Adjusted(1) Q2 Y-o-Y change: +3% Diluted EPS Reported Adjusted(1) $2.00 $2.14 Reported Q2 Y-o-Y change: +10% Adjusted(1) Q2 Y-o-Y change: +4% Free Cash Flow (% of)(1) Revenue Adj. Earnings 6% 42% Q2 FCF(1) down ~$90M Y-o-Y Guidance and other activities 2022 guidance: ‒ Revenue growth: 8% - 10% (All-in); 8% - 10% (Organic(1)) ‒ EPS: $7.44 - $7.64 (GAAP); $8.45 - $8.65 (Adjusted(1)) (1) Non-GAAP measures (definitions and/or reconciliations in appendix) (2) See performance measures definitions in appendix
5 Segment Revenue ($M) / Y-o-Y Organic Change %(1) Segment Earnings Margin % ∆ Y-o-Y bps / ∆ vs Q1’22 bps Performance Commentary DEP $514 +19% 15.9% -20 bps +130 bps Strength in waste handling, vehicle services, and industrial winches and automation. Aerospace & defense down on program timing and supply chain constraints Input shortages and higher logistics costs more than offset higher volumes. Price-cost turned positive in Q2 but still a headwind to margin DCEF $494 -1% 20.0% -140 bps +410 bps Strong shipments and order rates in NA below-ground fueling, vehicle wash, and fuel transport. Slower activity in NA above-ground equipment against difficult comp and supply chain-driven shipment delays. Demand strong in clean energy Margin decline on lower volumes and constrained inputs (including labor). Price-cost turned positive in Q2 but still a headwind to margins DII $276 -1% 22.2% -40 bps +70 bps Printer sales and services impacted by electronics shortages and COVID-19 China lockdowns. Stable performance in spares and consumables. Growth in software. Digital textile printing continues gradual recovery Margins impacted by lower volumes, input shortages, and production stoppages in Asia due to COVID-19 lockdowns DPPS $441 +7% 31.3% -290 bps -240 bps Strong volumes in non-COVID biopharma, industrial pumps, polymer processing, and precision components. Expected decline in COVID-related biopharma Margin decline on mix, cost inflation, and foreign currency translation DCST $434 +11% 14.8% +160 bps +140 bps Strong demand conditions and top line growth across all major business lines Margin improvement as strong volumes and mix drove fixed cost absorption, more than offsetting input shortages and higher input / logistics costs (1) Non-GAAP (definitions and/or reconciliations in appendix) Q2 Segment Results
6 Revenue & Bookings (1) Non-GAAP measure (definition and/or reconciliation in appendix) (2) Acquisitions: $84M, dispositions: $34M Q2 2022 % of Revenue 7% 21% 3% 58% 11%ASIA REST OF WORLD EUROPE OTHER AMER. US -14% 0% 12% -18% 12% Q2 ’22 Organic Rev Growth(1) (3) Acquisitions: $76M, dispositions: $43M (4) See performance measure definitions in appendix Q2 2022 Revenue Change in Organic Revenue(1): +$152M, or +7.5% Note: $ in millions. Numbers may not add due to rounding Q2 2022 Bookings(4) Change in Organic Bookings(4): -$235M, or -9.9% DEPQ2 2021 DCEF DII DPPS DCST FX ACQ./ DISP. (2) Q2 2022 ($M) -5 -74 2,1594982 29-3 492,032 Organic DEPQ2 2021 DCEF DII DPPS DCST FX ACQ./ DISP. (3) Q2 2022 ($M) -21 -68 2,107-146-41 -348 332,377 Organic
7 -80 bps SEGMENT EARNINGS ADJ. EBITDANON-ACQ. D&A (1) DEP DII DPPSDCEF DCST ADJ. EBITDA NON-ACQ. D&A (1) SEGMENT EARNINGS (1) Relates to PP&E and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs (2) Non-GAAP measures (definitions and/or reconciliations in appendix) (3) Includes $23M reduction to income taxes previously recorded related to the Tax Cuts & Jobs Act Q2 2022 Segment Earnings and Adjusted Net Earnings GAAP EARNINGS ADJ. EARNINGS CORPORATESEGMENT EARNINGS RESTRUCT. & OTHER PURCHASE ACC. EXP. ADJ. EARNINGS RESTRUCT. & OTHER INT./TAX EXPENSE PURCHASE ACC. EXP. ALL OTHER (3) GAAP EARNINGS Change in Adjusted Net Earnings(2) +$10M 265 8 27 299 9 12 -11 309 -36 -6 Q2 2021 Q2 2022 ($M) Note: $ in millions. Numbers may not add due to rounding 29023 23.0% 20.6% Change in Segment Earnings(2) +$9M Q2 2022 435 467 -511 444 ($M) -9 21.4% Q2 2021 -336 7 22.1% 47732 -40 bps14.7% 14.3%
8 12.3% (1) Includes stock-based compensation, tax payment related to the sale of Unified Brands, non-cash foreign currency translation losses reclassified to earnings, and changes in other current and non-current assets and liabilities (2) Non-GAAP measures (definitions and/or reconciliations in appendix) Note: Numbers may not add due to rounding $M YTD ‘22 YTD ‘21 ∆ Net earnings 516 497 +19 D&A 154 145 +9 Change in working capital (281) (188) -93 Change in other(1) (187) (17) -170 Cash flow from operations 202 437 -235 Capex (101) (73) -28 Free cash flow(2) 102 364 -262 FCF % of revenue(2) 2.4% 9.3% FCF % of adj. earnings(2) 17.4% 64.8% Year-to-Date Free Cash Flow Q2 FCF(2) was 6% of revenue (8% excluding ~$43M tax payment related to the sale of Unified Brands)
9 Segment Demand trends ’22 Organic Growth(2) Outlook Price – Cost Inputs availability Comments DEP DD Strong backlog and positive demand trends across all businesses Expect sequential margin improvement on improving price / materials spread and easing supply chain constraints DCEF LSD- MSD Positive outlook in below-ground retail fueling, vehicle wash, and industrial gases. Comps ease in above-ground retail fueling following sunset of EMV; Strong demand in clean energy Solid margin improvement expected in H2 on stronger volumes and pricing, improving input availability, productivity, and mix DII LSD Stable trends in marking & coding as China lockdowns ease. Signs of normalization in input sourcing. Demand improving in textiles, including for larger printers. Significant FX headwinds H2 margin improvement driven by improving volumes and cost containment DPPS MSD Strong outlook in non-COVID bio, industrial pumps, polymer processing, and precision components; near-term headwind from COVID-19 vaccine production capacity transitioning to other therapies Margin headwinds as negative mix more than offsets productivity and volumes DCST DD Strong backlogs and bookings. Positive top-line outlook across food retail, sustainable beverage packaging and heat exchangers for high efficiency heat pumps Improving price / material spread and normalizing supply chain headwinds in food retail (1) Multiple colored circles and arrows denote expected change in underlying conditions from Q3 ’22 to Q4 ‘22 (2) Non-GAAP measures (definitions and/or reconciliations in appendix). LSD = Low Single Digit; MSD = Mid Single Digit; HSD = High Single Digit; DD = Double Digit Revenue Profitability(1) Business Outlook for the Remainder of Year
10 7.0 7.1 6.7 7.9 4.2 7.3 7.3 6.9 9.4 4.4 2018 2019 2020 2021 YTD ’22 (1) See performance measures definitions in appendix (2) Calculated by applying the midpoint of 2022 full year 8-10% all-in revenue growth guide to the 2021 full year revenue Unprecedented Book-to-Bill(1) in ’21 Revenue Bookings Continued Backlog(1) Strength $B 12/17 DEP 06/2212/1912/18 12/20 DCEF 12/21 DII DPPS DCST 1.2 1.4 1.5 1.8 3.2 3.3 1.04 1.02 1.04 1.19 Book-to-Bill(1) % of Next-Twelve Months Revenue(1) 17% 19% 22% 22% 38%(2)1.04 $B Order rates and backlogs expected to normalize to levels commensurate with Dover’s GDP+ through-cycle growth objective as supply chains stabilize Elevated Backlog Provides Visibility and Confidence in Projected Growth; Expect Order Rates and Backlog to Normalize Through 2022 Order rates healthy and normalizing YTD bookings reduced by $74M order reversal in beverage can-making Note: Numbers may not add due to rounding
11 Margin Progression Trending Positive 19.2% H1 ’19 H2 ’19 17.9% H2 ’20H1 ’20 17.8% 19.7% H1 ’21 H2 ’21 21.2% 20.1% H1 ’22 H2 ’22 20.1% 2019 2020 2021 “Normal” seasonality; Strong conversion on volume growth and productivity initiatives Proven playbook to protect margin in challenging / lower volume environment Robust H1 conversion margin on strong volumes; H2 headwind on supply chain constraints and input shortages, negative price-cost Segment Earnings Margin(1) Δ H2 vs. H1 Comments +130 bps +190 bps -110 bps 2022 Steady improvement in margin performance on strong volumes, lower comps, improving supply chain, and predictably and noticeably improving price-cost spread H2 > H1Y-o-Y (1) Non-GAAP measures (definitions and/or reconciliations in appendix) FY Margin / Δ Y-o-Y 20.7% +190 bps 18.8% +20 bps 18.6% +170 bps
12 Appendix
13 Note: Numbers may not add due to rounding Organic Revenue and Bookings Bridges
14 Note: Numbers may not add due to rounding Q2 2021 to Q2 2022 Revenue and Bookings Bridges by Segment
15 Note: Numbers may not add due to rounding Reconciliation of Net Earnings to Segment Earnings and Adjusted Segment EBITDA (1) Other depreciation and amortization relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs.
16 Note: Numbers may not add due to rounding Reconciliation of Quarterly 2021 and 2020 Net Earnings to Segment Earnings and Calculation of Segment Earnings Margin ($ in millions) Q1 Q2 H1 Q3 Q4 H2 FY Revenue 1,868 2,032 3,900 2,018 1,989 4,008 7,907 Net earnings 233 265 497 264 363 627 1,124 Add back: Corporate expense 37 40 77 33 46 79 156 Interest expense, net 26 26 52 25 25 50 102 Income tax expense 56 59 115 64 98 162 277 Purchase accounting expenses 36 35 71 36 36 71 142 Restructuring and other cost (benefit) 4 11 15 (3) 27 23 38 Gain on dispositions - - - - (206) (206) (206) Segment earnings 392 435 827 418 388 806 1,633 Segment earnings margin 21.0% 21.4% 21.2% 20.7% 19.5% 20.1% 20.7% ($ in millions) Q1 Q2 H1 Q3 Q4 H2 FY Revenue 1,656 1,499 3,155 1,748 1,780 3,529 6,684 Net earnings 176 125 301 200 182 382 683 Add back: Corporate expense 23 26 49 35 36 71 119 Interest expense, net 26 28 54 27 28 54 108 Income tax expense 37 32 69 51 38 89 158 Purchase accounting expenses 34 34 68 35 35 70 139 Restructuring and other cost 8 17 25 6 21 27 51 (Gain) loss on dispositions (7) 1 (6) 1 - 1 (5) Segment earnings 298 262 560 354 340 694 1,254 Segment earnings margin 18.0% 17.5% 17.8% 20.3% 19.1% 19.7% 18.8% 2020 2021
17 Note: Numbers may not add due to rounding Reconciliation of Quarterly 2019 and Full Year 2018 Net Earnings to Segment Earnings and Calculation of Segment Earnings Margin ($ in millions) Q1 Q2 H1 Q3 Q4 H2 FY Revenue 1,725 1,811 3,535 1,825 1,776 3,601 7,136 Net earnings 106 198 304 206 168 374 678 Add back: Corporate expense 31 24 55 28 59 88 142 Interest expense, net 31 31 62 30 29 60 121 Income tax expense 33 52 84 52 29 81 165 Purchase accounting expenses 36 35 71 34 33 68 138 Restructuring and other cost 4 6 10 4 18 22 32 Loss on assets held for sale 47 - 47 - - - 47 Segment earnings 287 346 632 354 337 692 1,324 Segment earnings margin 16.6% 19.1% 17.9% 19.4% 19.0% 19.2% 18.6% 2019 ($ in millions) FY 2018 Revenue 6,992 Earnings from continuing operations 591 Add back: Corporate expense 115 Interest expense, net 122 Income tax expense 134 Purchase accounting expenses 146 Restructuring and other cost 73 Segment earnings 1,182 Segment earnings margin 16.9%
18 Note: Numbers may not add due to rounding Reconciliation of Net Earnings to Adjusted Net Earnings and Diluted EPS to Adjusted Diluted EPS
19 Note: Numbers may not add due to rounding Reconciliation of Free Cash Flow and EPS to Adjusted EPS
20 Note: Numbers may not add due to rounding Non-GAAP Definitions Definitions of Non-GAAP Measures: Adjusted Net Earnings: is defined as net earnings adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, and gain/loss on dispositions. Adjusted Net Earnings Margin: is defined as adjusted net earnings divided by revenue. Adjusted Diluted Net Earnings Per Share (or Adjusted Earnings Per Share): is defined as diluted EPS adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, and gain/loss on dispositions. Total Segment Earnings: is defined as sum of earnings before purchase accounting expenses, restructuring and other costs/benefits, gain/loss on dispositions, loss on assets held for sale, 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. Adjusted Segment EBITDA Margin: is defined as adjusted segment EBITDA divided by revenue. Free Cash Flow: is defined as 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. Organic Revenue Growth: is defined as revenue growth excluding the impact of foreign currency exchange rates and the impact of acquisitions and dispositions. The tables included in this presentation provide reconciliations of the non-GAAP measures used in this presentation to the most directly comparable U.S. GAAP measures. Further information regarding management’s use of these non-GAAP measures is included in Dover’s earnings release and investor supplement for the quarter.
21 Note: Numbers may not add due to rounding Performance Measure Definitions Definitions of Performance Measures: 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 acquisitions 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 been satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future. Book-to-Bill is a ratio of the amount of bookings received from customers during a period divided by the amount of revenue recorded during that same period. This metric is a useful indicator of demand. Backlog as a % of Next-Twelve Months Revenue is a ratio of backlog divided by the next-twelve months revenue. This metric is a useful indicator of demand. 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.
