Dover Reports Third Quarter 2022 Results

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Dover Reports Third Quarter 2022 Results

DOWNERS GROVE, Ill., Oct. 20, 2022 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2022.

Three Months Ended September 30,

Nine Months Ended September 30,

($ in millions, except per share data)

2022

2021

% Change

2022

2021

% Change

U.S. GAAP

Revenue

$       2,158

$       2,018

7 %

$       6,369

$       5,918

8 %

Net earnings 

286

264

8 %

802

761

5 %

Diluted EPS 

2.00

1.81

10 %

5.55

5.24

6 %













Non-GAAP

Organic revenue change




9 %




9 %

Adjusted net earnings 1

324

288

12 %

908

850

7 %

Adjusted diluted EPS

2.26

1.98

14 %

6.29

5.86

7 %

1 Q3 2022 and 2021 adjusted net earnings exclude after tax purchase accounting expenses of $31.0 million and $26.9 million, respectively, and restructuring and other costs (benefits) of
$6.7 million and $(2.3) million, respectively. Year-to-date 2022 and 2021 adjusted net earnings exclude after tax purchase accounting expenses of $107.8 million and $80.3 million,
respectively, and restructuring and other costs of $21.2 million and $9.0 million, respectively. Year-to-date 2022 also excludes a $22.6 million reduction to income taxes previously
recorded related to the Tax Cuts and Jobs Act.

For the quarter ended September 30, 2022, Dover generated revenue of $2.2 billion, an increase of 7% (+9% organic) compared to the third quarter of the prior year. GAAP net earnings of $286 million increased 8%, and GAAP diluted EPS of $2.00 was up 10%. On an adjusted basis, net earnings of $324 million increased 12% and adjusted diluted EPS of $2.26 was up 14% versus the comparable quarter of the prior year.

For the nine months ended September 30, 2022, Dover generated revenue of $6.4 billion, an increase of 8% (+9% organic) compared to the comparable period of the prior year. GAAP net earnings of $802 million increased 5%, and GAAP diluted EPS of $5.55 was up 6% year-over-year. On an adjusted basis, net earnings of $908 million increased 7%, and adjusted diluted EPS of $6.29 was also up 7% 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, "Dover delivered strong revenue growth and margin improvement in the third quarter driven by rigorous execution and improving price-cost dynamics that more than offset the significant impact of ongoing input shortages, inflationary cost pressure and foreign currency translation.

"Demand remains constructive across most of the portfolio and our order backlog remains at double its historical level relative to sales. The supply chain challenges that we have endured for the past 18 months continued to improve in the quarter which has allowed us to deplete our backlog at a faster rate and reduce our order conversion lead times closer to pre-pandemic levels. It is our expectation that this will continue for the balance of the year.

"Our full year outlook for cash generation remains robust, further strengthening our balance sheet position. Despite the macroeconomic uncertainty we are deploying capital to drive productivity and expand capacity in several businesses that are expected to deliver robust growth on secular tailwinds, and we are continuing to pursue attractive bolt-on acquisitions. During the quarter we also announced an accelerated share repurchase program to return excess capital to shareholders while preserving sufficient liquidity for value-creating investments.

"While current demand conditions are solid, our current management posture reflects growing caution in the macroeconomic outlook. As such, through the balance of the year we will be proactively reducing output in several businesses to draw down inventory balances and initiating cost containment measures where appropriate. Our business model is flexible, and we firmly believe that ongoing improvements in the supply chain will allow us to match production to meet demand within prevailing lead times in 2023.

"As we enter the final quarter of the year, I am confident in our team's ability to continue to outperform in a challenging operating environment. We remain committed to delivering results in line with our 2022 full-year guidance."

FULL YEAR 2022 GUIDANCE:

In 2022, Dover expects to generate GAAP EPS in the range of $7.40 to $7.50 (adjusted EPS of $8.40 to $8.50), based on full year revenue growth of 7% to 9% (8% to 10% on an organic basis).

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its third quarter and year-to-date 2022 results at 9:00 A.M. Eastern Time (8:00 A.M. Central Time) on Thursday, October 20, 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 third 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 over $8 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of over 25,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.

FORWARD-LOOKING STATEMENTS:

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, 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 - THIRD QUARTER 2022

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)(in thousands, except per share data*)





Three Months Ended
September 30,

Nine Months Ended
September 30,

2022

2021

2022

2021

Revenue

$      2,158,291

$      2,018,269

$      6,368,907

$      5,917,846

Cost of goods and services

1,385,541

1,263,690

4,071,680

3,669,547

Gross profit

772,750

754,579

2,297,227

2,248,299

Selling, general, and administrative expenses

402,339

412,553

1,270,615

1,249,593

Operating earnings

370,411

342,026

1,026,612

998,706

Interest expense

29,789

26,433

83,330

79,917

Interest income

(1,244)

(1,466)

(2,968)

(3,088)

Other income, net

(11,167)

(10,460)

(17,842)

(18,236)

Earnings before provision for income taxes

353,033

327,519

964,092

940,113

Provision for income taxes

67,007

63,763

162,295

179,080

Net earnings

$         286,026

$         263,756

$         801,797

$         761,033








Net earnings per share:






Basic

$               2.01

$              1.83

$               5.59

$               5.29

Diluted

$               2.00

$              1.81

$               5.55

$               5.24

Weighted average shares outstanding:






Basic

142,506

143,976

143,469

143,895

Diluted

143,257

145,440

144,413

145,220








Dividends paid per common share

$             0.505

$              0.50

$             1.505

$              1.49








* Per share data may be impacted by rounding.






 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)


2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

REVENUE










Engineered Products

$    487,647

$    514,436

$    516,501

$ 1,518,584

$   428,127

$   442,091

$   447,798

$ 1,318,016

$   462,811

$  1,780,827

Clean Energy & Fueling

458,395

494,075

464,022

1,416,492

389,678

437,042

410,561

1,237,281

410,872

1,648,153

Imaging & Identification

272,255

275,951

282,371

830,577

284,328

294,076

292,535

870,939

292,428

1,163,367

Pumps & Process Solutions

435,195

441,127

433,558

1,309,880

394,377

428,701

438,240

1,261,318

447,316

1,708,634

Climate & Sustainability
Technologies

399,078

434,164

462,671

1,295,913

372,077

430,506

429,425

1,232,008

376,167

1,608,175

Intersegment eliminations

(669)

(1,038)

(832)

(2,539)

(686)

(740)

(290)

(1,716)

(359)

(2,075)

Total consolidated revenue

$ 2,051,901

$ 2,158,715

$ 2,158,291

$ 6,368,907

$1,867,901

$  2,031,676

$  2,018,269

$ 5,917,846

$  1,989,235

$  7,907,081












NET EARNINGS










Segment Earnings:










Engineered Products

$      71,130

$      81,671

$      90,145

$    242,946

$     76,684

$     71,255

$     67,376

$    215,315

$     62,537

$     277,852

Clean Energy & Fueling

72,962

99,034

90,208

262,204

79,572

93,430

80,101

253,103

74,083

327,186

Imaging & Identification

58,598

61,392

74,477

194,467

63,618

66,565

70,635

200,818

66,114

266,932

Pumps & Process Solutions

146,617

138,048

128,573

413,238

128,895

146,759

150,275

425,929

149,664

575,593

Climate & Sustainability
Technologies

53,609

64,181

75,190

192,980

43,475

56,905

49,734

150,114

35,403

185,517

Total segment earnings

402,916

444,326

458,593

1,305,835

392,244

434,914

418,121

1,245,279

387,801

1,633,080

Purchase accounting expenses 1

53,286

47,019

40,526

140,831

35,516

35,162

35,587

106,265

35,715

141,980

Restructuring and other costs
(benefits) 2

10,552

7,944

8,613

27,109

4,162

10,779

(3,201)

11,740

26,696

38,436

Loss (gain) on dispositions 3

194

—

—

194

—

—

—

—

(206,338)

(206,338)

Corporate expense / other 4

37,404

27,967

27,876

93,247

37,173

39,910

33,249

110,332

45,966

156,298

Interest expense

26,552

26,989

29,789

83,330

26,823

26,661

26,433

79,917

26,402

106,319

Interest income

(775)

(949)

(1,244)

(2,968)

(680)

(942)

(1,466)

(3,088)

(1,353)

(4,441)

Earnings before provision for
income taxes

275,703

335,356

353,033

964,092

289,250

323,344

327,519

940,113

460,713

1,400,826

Provision for income taxes

49,550

45,738

67,007

162,295

56,481

58,836

63,763

179,080

97,928

277,008

Net earnings

$    226,153

$    289,618

$    286,026

$    801,797

$   232,769

$   264,508

$   263,756

$    761,033

$   362,785

$  1,123,818












SEGMENT EARNINGS MARGIN








Engineered Products

14.6 %

15.9 %

17.5 %

16.0 %

17.9 %

16.1 %

15.0 %

16.3 %

13.5 %

15.6 %

Clean Energy & Fueling

15.9 %

20.0 %

19.4 %

18.5 %

20.4 %

21.4 %

19.5 %

20.5 %

18.0 %

19.9 %

Imaging & Identification

21.5 %

22.2 %

26.4 %

23.4 %

22.4 %

22.6 %

24.1 %

23.1 %

22.6 %

22.9 %

Pumps & Process Solutions

33.7 %

31.3 %

29.7 %

31.5 %

32.7 %

34.2 %

34.3 %

33.8 %

33.5 %

33.7 %

Climate & Sustainability
Technologies

13.4 %

14.8 %

16.3 %

14.9 %

11.7 %

13.2 %

11.6 %

12.2 %

9.4 %

11.5 %

Total segment earnings margin

19.6 %

20.6 %

21.2 %

20.5 %

21.0 %

21.4 %

20.7 %

21.0 %

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 includes 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.

 

DOVER CORPORATION

QUARTERLY EARNINGS PER SHARE

(unaudited)(in thousands, except per share data*)


Earnings Per Share











2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

Net earnings per share:










Basic

$       1.57

$       2.01

$       2.01

$         5.59

$       1.62

$       1.84

$       1.83

$       5.29

$       2.52

$         7.81

Diluted

$       1.56

$       2.00

$       2.00

$         5.55

$       1.61

$       1.82

$       1.81

$       5.24

$       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

$ 286,026

$   801,797

$ 232,769

$ 264,508

$ 263,756

$ 761,033

$ 362,785

$  1,123,818












Weighted average shares outstanding:








Basic

144,087

143,832

142,506

143,469

143,765

143,941

143,976

143,895

144,005

143,923

Diluted

145,329

144,669

143,257

144,413

144,938

145,118

145,440

145,220

145,460

145,273












* Per share data may be impacted by rounding.

 

DOVER CORPORATION

QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)

(unaudited)(in thousands, except per share data*)

Non-GAAP Reconciliations

2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

Adjusted net earnings:










Net earnings

$  226,153

$  289,618

$  286,026

$ 801,797

$  232,769

$  264,508

$  263,756

$  761,033

$  362,785

$  1,123,818

Purchase accounting expenses, pre-tax 1

53,286

47,019

40,526

140,831

35,516

35,162

35,587

106,265

35,715

141,980

Purchase accounting expenses, tax
impact 2

(12,538)

(11,013)

(9,494)

(33,045)

(8,720)

(8,571)

(8,700)

(25,991)

(8,763)

(34,754)

Restructuring and other costs (benefits),
pre-tax 3

10,552

7,944

8,613

27,109

4,162

10,779

(3,201)

11,740

26,696

38,436

Restructuring and other costs (benefits),
tax impact 2

(2,191)

(1,803)

(1,921)

(5,915)

(1,031)

(2,597)

902

(2,726)

(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

$  323,750

$ 908,365

$  262,696

$  299,281

$  288,344

$  850,321

$   258,703

$  1,109,024












Adjusted diluted net earnings per share:








Diluted net earnings per share

$     1.56

$     2.00

$     2.00

$       5.55

$       1.61

$     1.82

$       1.81

$        5.24

$        2.49

$          7.74

Purchase accounting expenses, pre-tax 1

0.37

0.33

0.28

0.98

0.25

0.24

0.24

0.73

0.25

0.98

Purchase accounting expenses, tax
impact 2

(0.09)

(0.08)

(0.07)

(0.23)

(0.06)

(0.06)

(0.06)

(0.18)

(0.06)

(0.24)

Restructuring and other costs (benefits),
pre-tax 3

0.07

0.05

0.06

0.19

0.03

0.07

(0.02)

0.08

0.18

0.26

Restructuring and other costs (benefits),
tax impact 2

(0.02)

(0.01)

(0.01)

(0.04)

(0.01)

(0.02)

0.01

(0.02)

(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

$       2.26

$     6.29

$       1.81

$     2.06

$       1.98

$      5.86

$      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 Q3 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 Q3 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 Unified Brands ("UB") and the Race Winning Brands ("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 a
nd a $24,723 gain on disposition of our RWB equity method investment in our Engineered Products segment.

5 Q2 and Q3 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.

 

DOVER CORPORATION

QUARTERLY ADJUSTED SEGMENT EBITDA (NON-GAAP)

(unaudited)(in thousands)

Non-GAAP Reconciliations


2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

ADJUSTED SEGMENT EBITDA






















Engineered Products:












Segment earnings

$   71,130

$   81,671

$   90,145

$  242,946

$   76,684

$   71,255

$   67,376

$  215,315

$   62,537

$  277,852

Other depreciation and amortization 1

7,274

6,799

6,819

20,892

6,708

5,814

7,132

19,654

7,382

27,036

Adjusted segment EBITDA 2

78,404

88,470

96,964

263,838

83,392

77,069

74,508

234,969

69,919

304,888

Adjusted segment EBITDA margin 2

16.1 %

17.2 %

18.8 %

17.4 %

19.5 %

17.4 %

16.6 %

17.8 %

15.1 %

17.1 %












Clean Energy & Fueling:










Segment earnings 3

$   72,962

$   99,034

$   90,208

$  262,204

$   79,572

$   93,430

$   80,101

$  253,103

$   74,083

$  327,186

Other depreciation and amortization 1

8,466

6,533

6,893

21,892

6,489

6,571

6,411

19,471

6,371

25,842

Adjusted segment EBITDA 2

81,428

105,567

97,101

284,096

86,061

100,001

86,512

272,574

80,454

353,028

Adjusted segment EBITDA margin 2

17.8 %

21.4 %

20.9 %

20.1 %

22.1 %

22.9 %

21.1 %

22.0 %

19.6 %

21.4 %












Imaging & Identification:










Segment earnings

$   58,598

$   61,392

$   74,477

$  194,467

$   63,618

$   66,565

$   70,635

$  200,818

$   66,114

$  266,932

Other depreciation and amortization 1

3,497

3,496

3,372

10,365

3,274

3,544

3,896

10,714

3,475

14,189

Adjusted segment EBITDA 2

62,095

64,888

77,849

204,832

66,892

70,109

74,531

211,532

69,589

281,121

Adjusted segment EBITDA margin 2

22.8 %

23.5 %

27.6 %

24.7 %

23.5 %

23.8 %

25.5 %

24.3 %

23.8 %

24.2 %












Pumps & Process Solutions:










Segment earnings

$  146,617

$  138,048

$  128,573

$  413,238

$  128,895

$  146,759

$  150,275

$  425,929

$  149,664

$  575,593

Other depreciation and amortization 1

9,922

9,787

10,137

29,846

9,670

9,638

9,832

29,140

10,132

39,272

Adjusted segment EBITDA 2

156,539

147,835

138,710

443,084

138,565

156,397

160,107

455,069

159,796

614,865

Adjusted segment EBITDA margin 2

36.0 %

33.5 %

32.0 %

33.8 %

35.1 %

36.5 %

36.5 %

36.1 %

35.7 %

36.0 %












Climate & Sustainability Technologies:









Segment earnings

$   53,609

$   64,181

$   75,190

$  192,980

$   43,475

$   56,905

$   49,734

$  150,114

$   35,403

$  185,517

Other depreciation and amortization 1

6,495

6,443

6,736

19,674

6,349

6,682

7,019

20,050

6,937

26,987

Adjusted segment EBITDA 2

60,104

70,624

81,926

212,654

49,824

63,587

56,753

170,164

42,340

212,504

Adjusted segment EBITDA margin 2

15.1 %

16.3 %

17.7 %

16.4 %

13.4 %

14.8 %

13.2 %

13.8 %

11.3 %

13.2 %












Total Segments:










Segment earnings 2, 3, 4

$  402,916

$  444,326

$  458,593

$  1,305,835

$ 392,244

$  434,914

$  418,121

$  1,245,279

$  387,801

$  1,633,080

Other depreciation and amortization 1

35,654

33,058

33,957

102,669

32,490

32,249

34,290

99,029

34,297

133,326

Adjusted segment EBITDA 2

438,570

477,384

492,550

1,408,504

424,734

467,163

452,411

1,344,308

422,098

1,766,406

Adjusted segment EBITDA margin 2

21.4 %

22.1 %

22.8 %

22.1 %

22.7 %

23.0 %

22.4 %

22.7 %

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 (benefits).

2 Refer to Non-GAAP Disclosures section for definition.

3 Q1, Q2, and Q3 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.

 

DOVER CORPORATION

QUARTERLY ADJUSTED SEGMENT EBITDA TO NET EARNINGS RECONCILIATION (NON-GAAP)

(unaudited)(in thousands)

Non-GAAP Reconciliations


2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

Net earnings:










Adjusted segment EBITDA1:










Engineered Products

$   78,404

$   88,470

96,964

263,838

$  83,392

$   77,069

$   74,508

$ 234,969

$   69,919

$  304,888

Clean Energy & Fueling

81,428

105,567

97,101

284,096

86,061

100,001

86,512

272,574

80,454

353,028

Imaging & Identification

62,095

64,888

77,849

204,832

66,892

70,109

74,531

211,532

69,589

281,121

Pumps & Process Solutions

156,539

147,835

138,710

443,084

138,565

156,397

160,107

455,069

159,796

614,865

Climate & Sustainability
Technologies

60,104

70,624

81,926

212,654

49,824

63,587

56,753

170,164

42,340

212,504

Total adjusted segment EBITDA 1

438,570

477,384

492,550

1,408,504

424,734

467,163

452,411

1,344,308

422,098

1,766,406

Less: Other depreciation and
amortization 2

35,654

33,058

33,957

102,669

32,490

32,249

34,290

99,029

34,297

133,326

Total segment earnings 1

402,916

444,326

458,593

1,305,835

392,244

434,914

418,121

1,245,279

387,801

1,633,080

Purchase accounting expenses 3

53,286

47,019

40,526

140,831

35,516

35,162

35,587

106,265

35,715

141,980

Restructuring and other costs
(benefits) 4

10,552

7,944

8,613

27,109

4,162

10,779

(3,201)

11,740

26,696

38,436

Loss (gain) on dispositions 5

194

—

—

194

—

—

—

—

(206,338)

(206,338)

Corporate expense / other 6

37,404

27,967

27,876

93,247

37,173

39,910

33,249

110,332

45,966

156,298

Interest expense

26,552

26,989

29,789

83,330

26,823

26,661

26,433

79,917

26,402

106,319

Interest income

(775)

(949)

(1,244)

(2,968)

(680)

(942)

(1,466)

(3,088)

(1,353)

(4,441)

Earnings before provision for
income taxes

275,703

335,356

353,033

964,092

289,250

323,344

327,519

940,113

460,713

1,400,826

Provision for income taxes

49,550

45,738

67,007

162,295

56,481

58,836

63,763

179,080

97,928

277,008

Net earnings

$ 226,153

$ 289,618

$ 286,026

$ 801,797

$ 232,769

$ 264,508

$ 263,756

$ 761,033

$ 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 includes 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.

 

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


Q3

Q3 YTD

Organic



Engineered Products

17.6 %

16.9 %

Clean Energy & Fueling

(0.5) %

(0.5) %

Imaging & Identification

4.9 %

1.0 %

Pumps & Process Solutions

1.9 %

6.9 %

Climate & Sustainability Technologies

19.3 %

16.0 %

Total Organic

9.0 %

8.6 %

Acquisitions

4.4 %

4.3 %

Dispositions

(1.7) %

(1.7) %

Currency translation

(4.8) %

(3.6) %

Total*

6.9 %

7.6 %

 * Totals may be impacted by rounding.




2022


Q3

Q3 YTD

Organic



United States

11.2 %

10.9 %

Other Americas

(5.6) %

(5.5) %

Europe

8.7 %

8.9 %

Asia 

13.0 %

10.1 %

Other

(1.5) %

(2.4) %

Total Organic

9.0 %

8.6 %

Acquisitions

4.4 %

4.3 %

Dispositions

(1.7) %

(1.7) %

Currency translation

(4.8) %

(3.6) %

Total*

6.9 %

7.6 %

 * Totals may be impacted by rounding.








Adjusted EPS Guidance Reconciliation

Range

2022 Guidance for Earnings per Share (GAAP)

$          7.40

$          7.50

Purchase accounting expenses, net

0.99

Restructuring and other costs, net

0.17

Tax Cuts and Jobs Act

(0.16)

2022 Guidance for Adjusted Earnings per Share (Non-GAAP)

$          8.40

$          8.50

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


 

DOVER CORPORATION

QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)

(unaudited)(in thousands)

Quarterly Cash Flow


2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

Net Cash Flows Provided By (Used In):







Operating activities

$    23,683

$ 178,773

$ 264,625

$ 467,081

$ 177,184

$ 260,073

$ 351,329

$ 788,586

$ 327,279

$  1,115,865

Investing activities

(46,963)

(68,890)

(286,208)

(402,061)

(29,572)

(121,631)

(135,439)

(286,642)

(706,111)

(992,753)

Financing activities

(75,204)

120,469

(178,844)

(133,579)

(124,239)

(75,949)

(74,610)

(274,798)

24,918

(249,880)












Quarterly Free Cash Flow (Non-GAAP)


2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

Cash flow from operating
activities

$    23,683

$ 178,773

$ 264,625

$ 467,081

$ 177,184

$ 260,073

$ 351,329

$ 788,586

$ 327,279

$  1,115,865

Less: Capital expenditures

(50,381)

(50,196)

(65,462)

(166,039)

(31,260)

(41,971)

(47,926)

(121,157)

(50,308)

(171,465)

Free cash flow

$  (26,698)

$ 128,577

$ 199,163

$ 301,042

$ 145,924

$ 218,102

$ 303,403

$ 667,429

$ 276,971

$ 944,400












Cash flow from operating
activities as a percentage
of revenue

1.2 %

8.3 %

12.3 %

7.3 %

9.5 %

12.8 %

17.4 %

13.3 %

16.5 %

14.1 %












Cash flow from operating
activities as a percentage
of adjusted net earnings

8.6 %

57.8 %

81.7 %

51.4 %

67.4 %

86.9 %

121.8 %

92.7 %

126.5 %

100.6 %












Free cash flow as a
percentage of revenue

-1.3 %

6.0 %

9.2 %

4.7 %

7.8 %

10.7 %

15.0 %

11.3 %

13.9 %

11.9 %












Free cash flow as a
percentage of adjusted net
earnings

-9.7 %

41.6 %

61.5 %

33.1 %

55.5 %

72.9 %

105.2 %

78.5 %

107.1 %

85.2 %












 

DOVER CORPORATION

PERFORMANCE MEASURES

(unaudited)(in thousands)


2022

2021

Q1

Q2

Q3

Q3 YTD

Q1

Q2

Q3

Q3 YTD

Q4

FY 2021

BOOKINGS






















Engineered Products

$  541,035

$  452,668

$  512,374

$  1,506,077

$ 528,310

$  497,200

$  502,767

$  1,528,277

$  585,452

$  2,113,729

Clean Energy & Fueling

501,491

487,861

432,259

1,421,611

422,668

453,146

467,821

1,343,635

398,844

1,742,479

Imaging & Identification

307,104

292,136

281,789

881,029

293,614

299,608

293,782

887,004

303,400

1,190,404

Pumps & Process Solutions

459,790

471,693

415,253

1,346,736

551,365

521,010

490,581

1,562,956

460,105

2,023,061

Climate & Sustainability
Technologies

444,852

403,574

422,820

1,271,246

537,326

606,545

540,280

1,684,151

632,849

2,317,000

Intersegment eliminations

(2,295)

(1,207)

(423)

(3,925)

(863)

(498)

(407)

(1,768)

(290)

(2,058)

Total consolidated bookings

$  2,251,977

$  2,106,725

$  2,064,072

$  6,422,774

$  2,332,420

$  2,377,011

$  2,294,824

$  7,004,255

$  2,380,360

$  9,384,615












BACKLOG






















Engineered Products

$  830,135

$  759,589

$  742,766

$  562,557

$  613,517

$  662,834

$  785,085

Clean Energy & Fueling

426,342

411,350

368,050

238,822

256,497

312,176

383,572

Imaging & Identification

243,411

255,255

241,896

198,556

206,125

204,766

212,098

Pumps & Process Solutions

704,935

715,646

679,955

539,097

634,477

682,415

688,931

Climate & Sustainability Technologies

1,218,155

1,186,180

1,139,737

677,309

854,188

964,233

1,174,479

Intersegment
eliminations

(1,756)

(1,839)

(1,439)

(544)

(262)

(252)

(225)

Total consolidated
backlog

$  3,421,222

$  3,326,181

$  3,170,965

$  2,215,797

$  2,564,542

$  2,826,172

$  3,243,940












 

Bookings Growth Factors



2022


Q3

Q3 YTD

Organic



Engineered Products

0.8 %

(1.2) %

Clean Energy & Fueling

(17.6) %

(8.5) %

Imaging & Identification

3.7 %

4.7 %

Pumps & Process Solutions

(12.2) %

(10.9) %

Climate & Sustainability Technologies

(11.3) %

(15.3) %

Total Organic

(8.2) %

(7.5) %

Acquisitions

3.6 %

3.7 %

Dispositions

(1.7) %

(1.7) %

Currency translation

(3.8) %

(2.8) %

Total*

(10.1) %

(8.3) %

* Totals may be impacted by rounding.



 

Non-GAAP Measures Definitions

In an effort to provide investors with additional information regarding our results as determined by GAAP, management also discloses non-GAAP information that management believes provides useful information to investors. Adjusted net earnings, adjusted diluted net earnings per share, total segment earnings, total segment earnings margin, adjusted segment EBITDA, adjusted segment EBITDA margin, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of adjusted net earnings, 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/benefits. Adjusted segment EBITDA margin is defined as adjusted segment EBITDA divided by revenue.

Management believes the non-GAAP measures above are useful to investors to better understand the Company's ongoing profitability as they will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.

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 they provide management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.

Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue and 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.

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 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.

We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.

 

Investor Contact:

Media Contact:

Jack Dickens

Adrian Sakowicz

Senior Director - Investor Relations

Vice President - Communications

(630) 743-2566

(630) 743-5039

jdickens@dovercorp.com

asakowicz@dovercorp.com

 

 

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SOURCE Dover