09:10:11 EDT Thu 28 Mar 2024
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Dover Reports Fourth Quarter And Full Year 2014 Results And Updates 2015 Guidance

2015-01-27 07:00 ET - News Release

- Reports quarterly revenue of $2.0 billion, an increase of 11% over the prior year
- Achieves adjusted quarterly diluted earnings per share from continuing operations of $1.01, excluding discrete tax benefits; this result includes $0.17 in restructuring and other costs
- Plans to divest two businesses, which are now reported as discontinued operations
- Updates guidance for 2015 full year diluted earnings per share from continuing operations to be in the range of $4.70 to $4.95, a reduction to prior guidance reflecting the combined impact of global energy markets and discontinued operations, net of share repurchase activity

DOWNERS GROVE, Ill., Jan. 27, 2015 /PRNewswire/ -- Dover (NYSE: DOV) announced today that for the fourth quarter ended December 31, 2014, revenue was $2.0 billion, an increase of 11% over the prior year. The revenue increase was driven by organic growth of 6% and an increase of 7% from acquisitions, partially offset by a 2% impact from foreign exchange. Earnings from continuing operations were $171.8 million, essentially flat compared to $172.2 million for the prior year period. Diluted earnings per share ("EPS") for the fourth quarter ended December 31, 2014 was $1.03, compared to $1.00 EPS in the prior year period, representing an increase of 3%. EPS from continuing operations for the fourth quarter of 2014 included discrete tax benefits of $0.02, compared to $0.01 EPS in the prior year period. Excluding these items, adjusted EPS from continuing operations for the fourth quarter of 2014 was $1.01, an increase of 2% over an adjusted EPS of $0.99 in the prior year period.

Revenue for the year ended December 31, 2014 was $7.8 billion, an increase of 8% over the prior year, reflecting organic growth of 4% and a 4% increase from acquisitions. Foreign exchange had a negligible impact. Earnings from continuing operations for the year ended December 31, 2014 were $778.1 million, compared to $797.5 million in the prior year period, representing a decrease of 2%. EPS for the year ended December 31, 2014 was $4.61 EPS, essentially flat compared to $4.60 EPS in the prior year. EPS from continuing operations during this period includes discrete tax benefits of $0.07 EPS compared to $0.43 EPS in the prior year, as well as $0.02 of other one-time gains recognized in the prior year. Excluding these items, adjusted EPS from continuing operations for the year ended December 31, 2014 was $4.54, an increase of 10% over an adjusted EPS of $4.14 in the prior year.

Dover also announced today its intention to divest Sargent Aerospace ("Sargent"), a supplier of precision-engineered components and aftermarket services in the aerospace and defense industries, and part of Dover's Engineered Systems segment.   Both Sargent and Datamax O'Neil ("D-O") are reported as discontinued operations for the fourth quarter and full year 2014 results.  Dover expects to complete the sale of D-O in the first quarter, with the sale of Sargent expected to occur in the second quarter of 2015.

Commenting on the fourth quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "We finished the year with a very strong fourth quarter, achieving 11% revenue growth and earnings growth that exceeded expectations.  We saw robust topline growth at each segment led by Energy and Fluids at 20% and 10%, respectively, and achieved solid volume leverage.  In the quarter, we made the decision to divest Sargent and, as previously announced, Datamax O'Neil. While both are excellent companies with strong positions, they serve markets where others have greater scale.  We expect after-tax proceeds of the divestitures to be used for share repurchases and growth opportunities."

"As previously announced, we took decisive actions in the quarter to adjust our costs and streamline our businesses, which accounted for the majority of nonrecurring charges of $0.17.  Regarding our energy markets, there continues to be significant uncertainty driven by the rapid decline in oil prices.  Accordingly, we took additional cost reduction steps in our Energy businesses during the quarter and continue to review further actions, including additional restructuring costs in the first quarter of 2015."

"As a result, we are updating our 2015 guidance to reflect the anticipated combined impact of lower oil prices, discontinued operations, share repurchase activity and FX.  We now expect total revenue growth of 1% to -2%, principally reflecting our new Energy revenue estimate of -6% to -9%, a 15 point reduction from our prior forecast.  Within our total revenue forecast, organic growth is anticipated to be approximately 1% to -2%, completed acquisitions will provide approximately 2% growth and FX is expected to be a 2% headwind.  In total, we now expect full year adjusted EPS to be in the range of $4.70 to $4.95, a $0.35 reduction to our prior guidance."

Net earnings for the quarter ended December 31, 2014, were $169.3 million, or $1.02 EPS, which included a loss from discontinued operations of $2.5 million, or $0.02 EPS compared to net earnings of $194.0 million, or $1.13 EPS, for the same period of 2013, which included earnings from discontinued operations of $21.7 million, or $0.13 EPS.

Net earnings for the year ended December 31, 2014 were $775.2 million, or $4.59 EPS, compared to net earnings of $1.0 billion, or $5.78 EPS, for the same period of 2013. 2014 results reflected a loss from discontinued operations of $2.9 million, or $0.02 EPS, which included $27.1 million in spin-off costs. 2013 results reflected earnings from discontinued operations of $205.6 million or $1.18 EPS, which included spin-off costs of $30.1 million.

Dover will host a webcast of its fourth quarter 2014 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, January 27, 2015. The webcast can be accessed on the Dover website at www.dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's fourth quarter results and its operating segments can also be found on the Company's website.

About Dover:

Dover is a diversified global manufacturer with annual revenues of $8 billion. We deliver innovative equipment and components, specialty systems and support services through four major operating segments: Energy, Engineered Systems, Fluids, and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve.  Recognized for our entrepreneurial approach for nearly 60 years, our team of 27,000 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 www.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. Such statements relate to, among other things, operating and strategic plans, income, earnings, cash flows, changes in operations, industries in which Dover businesses operate, and operating improvements.  Forward-looking statements may be indicated by words or phrases such as "anticipates," "expects," "believes," "suggests," "will," "plans," "should," "would," "could," and "forecast", or the use of the future tense and similar words or phrases. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, oil and natural gas demand, production growth, and prices; changes in exploration and production spending by Dover's customers and changes in the level of oil and natural gas exploration and development; economic conditions generally and changes in economic conditions globally and in markets served by Dover businesses, including well activity, U.S. industrials activity and the status of economic recovery in Europe; the ability of Dover's businesses to expand into new geographic markets; Dover's ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures; Dover's ability to achieve expected savings from integration and other cost-control initiatives, such as lean and productivity programs; changes in customer demand or the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of Dover's businesses to develop and launch new products, timing of such launches and risks relating to market acceptance by customers; the relative mix of products and services which impacts margins and operating efficiencies; increased competition and pricing pressures; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes or developments, including environmental regulations, conflict minerals disclosure requirements, and tax policies; protection and validity of patent and other intellectual property rights; the impact of legal matters and legal compliance risks; the impact of interest rate and currency exchange rate fluctuations; conditions and events affecting domestic and global financial and capital markets; and a downgrade in Dover's credit ratings which, among other matters, could make obtaining financing more difficult and costly.  Dover refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as its reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause its actual results to differ materially from its current expectations and from the forward-looking statements contained herein. Dover undertakes no obligation to update any forward-looking statement, except as required by law.

 

INVESTOR SUPPLEMENT - FOURTH QUARTER AND FULL YEAR 2014


DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

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



Three Months Ended
December 31,


Years Ended December 31,


2014



2013



2014



2013


Revenue

$

1,977,947



$

1,785,922



$

7,752,728



$

7,155,096


Cost of goods and services

1,254,079



1,106,213



4,778,479



4,376,505


Gross profit

723,868



679,709



2,974,249



2,778,591


Selling and administrative expenses

460,377



412,487



1,758,765



1,616,921


Operating earnings

263,491



267,222



1,215,484



1,161,670


Interest expense, net

31,332



29,912



127,179



120,654


Other expense (income), net

1,172



(3,500)



(5,902)



(4,970)


Earnings before provision
for income taxes and
discontinued operations

230,987



240,810



1,094,207



1,045,986


Provision for income taxes

59,152



68,583



316,067



248,459


Earnings from continuing operations

171,835



172,227



778,140



797,527


(Loss) earnings from discontinued operations, net

(2,541)



21,736



(2,905)



205,602


Net earnings

$

169,294



$

193,963



$

775,235



$

1,003,129














Basic earnings per common share:












Earnings from continuing operations

$

1.04



$

1.01



$

4.67



$

4.66


(Loss) earnings from discontinued operations, net

(0.02)



0.13



(0.02)



1.20


Net earnings

1.03



1.14



4.65



5.86














Weighted average shares outstanding

164,589



170,027



166,692



171,271














Diluted earnings per common share:












Earnings from continuing operations

$

1.03



$

1.00



$

4.61



$

4.60


(Loss) earnings from discontinued operations, net

(0.02)



0.13



(0.02)



1.18


Net earnings

1.02



1.13



4.59



5.78














Weighted average shares outstanding

166,467



172,265



168,842



173,547














Dividends paid per common share

$

0.40



$

0.375



$

1.55



$

1.45














 

 


DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)



2014


2013


Q1

Q2

Q3

Q4

FY 2014


Q1

Q2

Q3

Q4

FY 2013

REVENUE






















Energy

$

478,773


$

481,016


$

507,334


$

550,116


$

2,017,239



$

462,679


$

465,906


$

467,688


$

457,580


$

1,853,853
























Engineered Systems






















Printing & Identification

231,679


252,354


257,282


247,569


988,884



205,828


213,573


220,538


237,936


877,875


Industrials

335,995


361,467


355,019


344,600


1,397,081



317,059


330,423


332,095


320,518


1,300,095



567,674


613,821


612,301


592,169


2,385,965



522,887


543,996


552,633


558,454


2,177,970
























Fluids

345,009


346,275


361,797


377,485


1,430,566



273,638


310,137


309,241


343,822


1,236,838
























Refrigeration & Food Equipment

411,493


522,357


528,807


458,532


1,921,189



422,468


517,574


521,322


426,476


1,887,840
























Intra-segment eliminations

(379)


(833)


(664)


(355)


(2,231)



(132)


(632)


(231)


(410)


(1,405)


Total consolidated revenue

$

1,802,570


$

1,962,636


$

2,009,575


$

1,977,947


$

7,752,728



$

1,681,540


$

1,836,981


$

1,850,653


$

1,785,922


$

7,155,096
























NET EARNINGS






















Segment Earnings:






















Energy

$

118,968


$

114,991


$

122,738


$

105,118


$

461,815



$

118,708


$

109,662


$

119,086


$

112,193


$

459,649


Engineered Systems

83,227


101,766


108,800


93,205


386,998



74,162


87,818


98,044


87,473


347,497


Fluids

57,942


63,112


67,559


63,026


251,639



47,601


58,768


63,056


55,098


224,523


Refrigeration & Food Equipment

44,862


84,926


78,012


30,934


238,734



52,110


82,177


86,446


46,574


267,307


Total Segments

304,999


364,795


377,109


292,283


1,339,186



292,581


338,425


366,632


301,338


1,298,976


Corporate expense / other

30,734


29,287


27,815


29,964


117,800



33,885


35,078


32,757


30,616


132,336


Net interest expense

32,655


31,961


31,231


31,332


127,179



30,282


30,230


30,230


29,912


120,654


Earnings from continuing operations before
provision for income taxes

241,610


303,547


318,063


230,987


1,094,207



228,414


273,117


303,645


240,810


1,045,986


Provision for income taxes

71,569


92,966


92,380


59,152


316,067



68,147


25,129


86,600


68,583


248,459


Earnings from continuing operations

170,041


210,581


225,683


171,835


778,140



160,267


247,988


217,045


172,227


797,527


(Loss) earnings from discontinued operations, net

(9,903)


3,378


6,161


(2,541)


(2,905)



49,736


82,061


52,069


21,736


205,602


Net earnings

$

160,138


$

213,959


$

231,844


$

169,294


$

775,235



$

210,003


$

330,049


$

269,114


$

193,963


$

1,003,129
























SEGMENT OPERATING MARGIN


















Energy

24.8

%

23.9

%

24.2

%

19.1

%

22.9

%


25.7

%

23.5

%

25.5

%

24.5

%

24.8

%

Engineered Systems

14.7

%

16.6

%

17.8

%

15.7

%

16.2

%


14.2

%

16.1

%

17.7

%

15.7

%

16.0

%

Fluids

16.8

%

18.2

%

18.7

%

16.7

%

17.6

%


17.4

%

18.9

%

20.4

%

16.0

%

18.2

%

Refrigeration & Food Equipment

10.9

%

16.3

%

14.8

%

6.7

%

12.4

%


12.3

%

15.9

%

16.6

%

10.9

%

14.2

%

Total Segment

16.9

%

18.6

%

18.8

%

14.8

%

17.3

%


17.4

%

18.4

%

19.8

%

16.9

%

18.2

%























DEPRECIATION AND AMORTIZATION EXPENSE


















Energy

$

25,575


$

25,807


$

27,145


$

33,429


$

111,956



$

24,448


$

24,714


$

24,707


$

25,206


$

99,075


Engineered Systems

15,850


15,982


15,334


14,780


61,946



14,309


14,774


14,950


15,025


59,058


Fluids

16,366


15,308


14,019


15,210


60,903



11,361


11,570


11,790


14,091


48,812


Refrigeration & Food Equipment

17,212


17,451


17,073


16,965


68,701



16,585


16,611


16,962


17,070


67,228


Corporate

870


1,000


910


902


3,682



859


1,028


1,030


943


3,860



$

75,873


$

75,548


$

74,481


$

81,286


$

307,188



$

67,562


$

68,697


$

69,439


$

72,335


$

278,033
























 

 

DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(continued)

(unaudited)(in thousands)



2014


2013


Q1

Q2

Q3

Q4

FY 2014


Q1

Q2

Q3

Q4

FY 2013

BOOKINGS






















Energy

$

478,469


$

477,162


$

526,134


$

534,646


$

2,016,411



$

515,388


$

416,892


$

481,021


$

440,261


$

1,853,562
























Engineered Systems






















Printing & Identification

250,434


245,445


249,299


248,082


993,260



205,386


221,458


219,316


233,308


879,468


Industrials

370,949


363,773


342,687


374,438


1,451,847



346,539


343,194


300,655


325,840


1,316,228


Eliminations

(18)


(16)


(11)


(11)


(56)



(81)


(129)


(5)


278


63



621,365


609,202


591,975


622,509


2,445,051



551,844


564,523


519,966


559,426


2,195,759
























Fluids

362,943


375,009


350,853


345,553


1,434,358



303,609


298,817


307,729


351,767


1,261,922
























Refrigeration & Food Equipment

493,731


542,810


459,099


367,567


1,863,207



482,792


515,270


433,426


450,850


1,882,338
























Intra-segment eliminations

(506)


(1,089)


(737)


(644)


(2,976)



(560)


(708)


(417)


735


(950)
























Total consolidated bookings

$

1,956,002


$

2,003,094


$

1,927,324


$

1,869,631


$

7,756,051



$

1,853,073


$

1,794,794


$

1,741,725


$

1,803,039


$

7,192,631
























BACKLOG






















Energy

$

210,846


$

206,415


$

232,739


$

233,347





$

274,733


$

218,764


$

233,820


$

206,790


























Engineered Systems






















Printing & Identification

131,298


128,912


115,352


110,359





91,020


98,624


99,615


95,597




Industrials

266,517


268,680


254,612


282,598





250,480


261,600


228,605


231,748





397,815


397,592


369,964


392,957





341,500


360,224


328,220


327,345


























Fluids

328,617


348,508


323,424


277,834





222,255


228,212


228,880


310,330


























Refrigeration & Food Equipment

431,298


450,065


376,141


282,507





417,246


412,366


324,042


347,004


























Intra-segment eliminations

(374)


(211)


(302)


(431)





(596)


(526)


(387)


(592)


























Total consolidated backlog

$

1,368,202


$

1,402,369


$

1,301,966


$

1,186,214





$

1,255,138


$

1,219,040


$

1,114,575


$

1,190,877




 

 

DOVER CORPORATION

QUARTERLY EARNINGS PER SHARE

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






2014


2013


Q1

Q2

Q3

Q4

FY 2014


Q1

Q2

Q3

Q4

FY 2013

Basic earnings (loss) per common share:


















Continuing operations

$

1.00


$

1.26


$

1.36


$

1.04


$

4.67



$

0.92


$

1.45


$

1.27


$

1.01


$

4.66


Discontinued operations

(0.06)


0.02


0.04


(0.02)


(0.02)



0.29


0.48


0.31


0.13


1.20


Net earnings

0.94


1.29


1.40


1.03


4.65



1.21


1.93


1.58


1.14


5.86
























Diluted earnings (loss) per common share:


















Continuing operations

$

0.99


$

1.25


$

1.34


$

1.03


$

4.61



$

0.91


$

1.43


$

1.26


$

1.00


$

4.60


Discontinued operations

(0.06)


0.02


0.04


(0.02)


(0.02)



0.28


0.47


0.30


0.13


1.18


Net earnings

0.93


1.27


1.38


1.02


4.59



1.20


1.91


1.56


1.13


5.78
























Adjusted diluted earnings per common share (calculated below):

Continuing operations

$

0.97


$

1.25


$

1.31


$

1.01


$

4.54



$

0.89


$

1.08


$

1.20


$

0.99


$

4.14
























Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:























Net earnings (loss):






















Continuing operations

$

170,041


$

210,581


$

225,683


$

171,835


$

778,140



$

160,267


$

247,988


$

217,045


$

172,227


$

797,527


Discontinued operations

(9,903)


3,378


6,161


(2,541)


(2,905)



49,736


82,061


52,069


21,736


205,602


Net earnings

160,138


213,959


231,844


169,294


775,235



210,003


330,049


269,114


193,963


1,003,129
























Average shares outstanding:


















Basic

169,750


166,474


166,021


164,589


166,692



173,448


171,111


170,544


170,027


171,271


Diluted

172,013


168,857


168,343


166,467


168,842



175,567


173,097


172,734


172,265


173,547


Note:






















Earnings from continuing operations are adjusted by discrete tax items and other one-time gains to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:


























2014


2013


Q1

Q2

Q3

Q4

FY 2014


Q1

Q2

Q3

Q4

FY 2013

Adjusted earnings from continuing operations:
















Earnings from continuing operations

$

170,041


$

210,581


$

225,683


$

171,835


$

778,140



$

160,267


$

247,988


$

217,045


$

172,227


$

797,527


Gains (losses) from discrete and other tax items

2,541


(635)


5,524


3,860


11,290



3,893


61,477


7,751


2,338


75,459


Other one-time gains, net of tax (1)









2,866



2,866


Adjusted earnings from continuing operations

$

167,500


$

211,216


$

220,159


$

167,975


$

766,850



$

156,374


$

186,511


$

206,428


$

169,889


$

719,202
























Adjusted diluted earnings per common share:


















Earnings from continuing operations

$

0.99


$

1.25


$

1.34


$

1.03


$

4.61



$

0.91


$

1.43


$

1.26


$

1.00


$

4.60


Gains from discrete and other tax items

0.01



0.03


0.02


0.07



0.02


0.36


0.04


0.01


0.43


Other one-time gains, net of tax (1)









0.02



0.02


Adjusted earnings from continuing operations

$

0.97


$

1.25


$

1.31


$

1.01


$

4.54



$

0.89


$

1.08


$

1.20


$

0.99


$

4.14
























(1) Reflects a one-time curtailment gain recognized in the third quarter of 2013 in connection with the freeze of the Company's defined benefit pension plans.























* Per share data may not add due to rounding.
















 

 


DOVER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(unaudited)(in thousands)



December 31, 2014


December 31, 2013

Assets:






Cash and cash equivalents

$

681,581



$

803,882


Receivables, net of allowances

1,186,746



1,076,641


Inventories, net

863,737



715,311


Deferred tax and other current assets

164,758



122,138


Property, plant and equipment, net

837,069



787,849


Goodwill

3,491,557



3,032,991


Intangible assets, net

1,369,520



1,258,911


Other assets

168,246



202,806


Assets of discontinued operations

327,171



2,854,652


Total assets

$

9,090,385



$

10,855,181








Liabilities and Stockholders' Equity:






Notes payable and current maturities of long-term debt

$

777,956



$

229,278


Payables and accrued expenses

1,261,398



1,112,863


Deferred taxes and other non-current liabilities

1,046,547



975,823


Long-term debt

2,253,041



2,599,201


Liabilities of discontinued operations

50,718



560,620


Stockholders' equity

3,700,725



5,377,396


Total liabilities and stockholders' equity

$

9,090,385



$

10,855,181


 

 


DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)(in thousands)



Years Ended December 31,


2014



2013


Operating activities:






Net earnings

$

775,235



$

1,003,129


Loss (earnings) from discontinued operations, net

2,905



(205,602)


Depreciation and amortization

307,188



278,033


Stock-based compensation

31,628



30,480


Contributions to employee benefit plans

(24,232)



(40,258)


Net change in assets and liabilities

(139,908)



(86,170)


Net cash provided by operating activities of continuing operations

952,816



979,612








Investing activities:






Additions to property, plant and equipment

(166,033)



(141,694)


Acquisitions (net of cash and cash equivalents acquired)

(802,254)



(322,838)


Proceeds from the sale of businesses

191,348



76,457


Other

(5,618)



26,398


Net cash used in investing activities of continuing operations

(782,557)



(361,677)








Financing activities:






Cash received from Knowles Corporation, net of cash distributed

359,955




Net increase in debt and notes payable

244,934



19,530


Dividends to stockholders

(258,487)



(247,820)


Purchase of common stock

(601,077)



(457,871)


Net proceeds from exercise of share-based awards

(814)



7,619


Net cash used in financing activities of continuing operations

(255,489)



(678,542)








Net cash provided by discontinued operations

3,355



65,764








Effect of exchange rate changes on cash

(40,426)



(1,351)








Net (decrease) increase in cash and cash equivalents

(122,301)



3,806


Cash and cash equivalents at beginning of period

803,882



800,076


Cash and cash equivalents at end of period

$

681,581



$

803,882


 

 

DOVER CORPORATION

ADDITIONAL QUARTERLY INFORMATION

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


FREE CASH FLOW



2014


2013


Q1

Q2

Q3

Q4

FY 2014


Q1

Q2

Q3

Q4

FY 2013

Cash flow from operating
activities

$

28,361


$

185,013


$

292,012


$

447,430


$

952,816



$

58,222


$

241,881


$

261,659


$

417,850


$

979,612


Less: Additions to property,
plant and equipment

(32,695)


(42,550)


(33,532)


(57,256)


(166,033)



(25,082)


(30,561)


(39,191)


(46,860)


(141,694)


Free cash flow

$

(4,334)


$

142,463


$

258,480


$

390,174


$

786,783



$

33,140


$

211,320


$

222,468


$

370,990


$

837,918
























Free cash flow as a
percentage of earnings from
continuing operations

(2.5)

%

67.7

%

114.5

%

227.1

%

101.1

%


20.7

%

85.2

%

102.5

%

215.4

%

105.1

%























Free cash flow as a
percentage of revenue

(0.2)

%

7.3

%

12.9

%

19.7

%

10.1

%


2.0

%

11.5

%

12.0

%

20.8

%

11.7

%

 

RESULTS OF SARGENT AEROSPACE AND DATAMAX O'NEIL

The following tables present the impact the operating results of Sargent Aerospace ("Sargent") and Datamax O'Neil ("D-O") had on the consolidated results of Dover Corporation. Sargent and D-O have been included in the consolidated financial statements as discontinued operations for all periods presented. See "Discontinued Operations" in this Investor Supplement for a discussion of the results and components of discontinued operations.


2014


2013


Q1

Q2

Q3

Q4

FY 2014


Q1

Q2

Q3

Q4

FY 2013

Revenue:






















Revenue including Sargent
and D-O

$

1,884,647


$

2,047,738


$

2,092,467


$

2,056,063


$

8,080,915



$

1,763,977


$

1,932,411


$

1,940,211


$

1,879,054


$

7,515,653


Revenue of Sargent and D-O

82,077


85,102


82,892


78,116


328,187



82,437


95,430


89,558


93,132


360,557


Continuing revenue as
reported

$

1,802,570


$

1,962,636


$

2,009,575


$

1,977,947


$

7,752,728



$

1,681,540


$

1,836,981


$

1,850,653


$

1,785,922


$

7,155,096
























Earnings:






















Earnings including Sargent
and D-O

$

176,324


$

217,443


$

232,825


$

177,837


$

804,429



$

167,213


$

258,058


$

226,235


$

182,566


$

834,072


Earnings attributable to
Sargent and D-O

6,283


6,862


7,142


6,002


26,289



6,946


10,070


9,190


10,339


36,545


Earnings from continuing
operations as reported

$

170,041


$

210,581


$

225,683


$

171,835


$

778,140



$

160,267


$

247,988


$

217,045


$

172,227


$

797,527
























Diluted earnings per common share:




















Earnings including Sargent
and D-O

$

1.02


$

1.29


$

1.38


$

1.07


$

4.76



$

0.95


$

1.49


$

1.31


$

1.06


$

4.81


Earnings attributable to
Sargent and D-O

0.04


0.04


0.04


0.04


0.16



0.04


0.06


0.05


0.06


0.21


Earnings from continuing
operations as reported

$

0.99


$

1.25


$

1.34


$

1.03


$

4.61



$

0.91


$

1.43


$

1.26


$

1.00


$

4.60
























* Per share data may not add due to rounding.

 

ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2014

Acquisitions

During the fourth quarter of 2014, the Company completed one acquisition within the Energy segment. For the full year 2014, Dover made a total of seven acquisitions for consideration totaling $802.3 million.

Discontinued Operations

The Company did not dispose of any businesses in the fourth quarter of 2014; however, in the fourth quarter, the Company announced its intent to divest Datamax O'Neil and Sargent Aerospace, two non-core businesses within the Engineered Systems segment. The results of operations and cash flows of these businesses have been reclassified to discontinued operations and the assets and liabilities of these businesses have been segregated within assets and liabilities of discontinued operations for all periods presented herein. For the fourth quarter of 2014, the Company recognized a loss from discontinued operations of $2.5 million, or $0.02 EPS, which includes $6.0 million of earnings, or $0.04 EPS, of the aforementioned businesses.

On a full-year basis, the Company generated a net loss of $2.9 million, or $0.02 EPS. Included in this amount is a $6.9 million loss on sale of DEK International, which was sold in the third quarter of 2014 and a $3.2 million gain to adjust the gain on sale of Everett Charles Technologies, which was sold in the fourth quarter of 2013. Also included in the results of discontinued operations is $26.3 million of earnings, or $0.16 EPS, attributable to the operations of Datamax O'Neil and Sargent Aerospace. Earnings from discontinued operations also include the results of Knowles Corporation, prior to the distribution on February 28, 2014, as well as the related spin-off costs incurred by Dover during the period, which totaled a loss of approximately $21.8 million, or $0.13 EPS.

Restructuring and Other Costs

During the quarter, the Company took actions to adjust our costs and streamline our businesses, resulting in $37.4 million, or $0.16 EPS, of restructuring charges. These charges were incurred at each of our business segments, including $5.8 million in Energy, $3.7 million in Engineered Systems, $2.8 million in Fluids, and $24.9 million in Refrigeration & Food Equipment. The Company expects to record an additional $17 to $20 million in restructuring charges in the first quarter of 2015, with the majority of these charges in the Energy segment. The Company also recorded a $3.6 million, or $0.01 EPS, pension settlement charge in the fourth quarter of 2014.

Tax Rate

The effective tax rate on continuing operations was 25.6% and 28.5% for the fourth quarters of 2014 and 2013, respectively. On a full year basis, the effective tax rates on continuing operations for 2014 and 2013 were 28.9% and 23.8%, respectively.  The 2014 and 2013 rates were favorably impacted by discrete and other items, as shown in the reconciliation for quarterly earnings per share included herein.  After adjusting for discrete and other items, the fourth quarter effective tax rates were 27.3% and 29.5% for 2014 and 2013, respectively, and the full year rates were 29.9% and 31.0% for 2014 and 2013, respectively. The lower rates for the quarter and full year primarily reflect the tax benefits associated with restructuring charges and lower rates in foreign jurisdictions. The fourth quarter rate was also favorably impacted by the extension of the R&D credit.

Revenue Growth Factors


2014


Q1


Q2


Q3


Q4


Full Year

Organic

4

%


4

%


5

%


6

%


4

%

Acquisitions

3

%


3

%


4

%


7

%


4

%

Currency translation

%


%


%


(2)

%


%


7

%


7

%


9

%


11

%


8

%

 

Free Cash Flow

The following table is a reconciliation of free cash flow (a non-GAAP measure) from cash flow provided by operating activities:


Three Months Ended
December 31,


Years Ended December 31,


2014



2013



2014



2013


Free Cash Flow(dollars in thousands)












Cash flow provided by operating activities

$

447,430



$

417,850



$

952,816



$

979,612


Less: Capital expenditures

(57,256)



(46,860)



(166,033)



(141,694)


Free cash flow

$

390,174



$

370,990



$

786,783



$

837,918














Free cash flow as a percentage of revenue

19.7

%


20.8

%


10.1

%


11.7

%













Free cash flow as a percentage of earnings from continuing operations







101.1

%


105.1

%

 

The full year decrease in 2014 free cash flow reflects a higher investment in working capital year over year, higher capital expenditures, and lower earnings from continuing operations.

Share Repurchases

During the year ended December 31, 2014, the Company purchased a total of approximately 7.5 million shares of its common stock in the open market at a total cost of $601.1 million, or $80.50 per share. The Company completed its November 2012$1.0 billion stock repurchase program in 2014 through the repurchase of 3.6 million shares. The remaining 3.9 million of share repurchases in 2014 were made pursuant to the share repurchase program approved in May 2012. As of December 31, 2014, the approximate number of shares still available for repurchase under the May 2012 share repurchase authorization was 38,041.

Capitalization

The following table provides a summary reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:

Net Debt to Net Capitalization Ratio (in thousands)


December 31, 2014


December 31, 2013

Current maturities of long-term debt


$

299,956



$

2,778


Commercial paper


478,000



226,500


Long-term debt


2,253,041



2,599,201


Total debt


3,030,997



2,828,479


Less: Cash and cash equivalents


(681,581)



(803,882)


Net debt


2,349,416



2,024,597


Add: Stockholders' equity


3,700,725



5,377,396


Net capitalization


$

6,050,141



$

7,401,993


Net debt to net capitalization


38.8

%


27.4

%

 

Non-GAAP Information:

These Investor Supplement tables contain non-GAAP measures such as revenue including Sargent Aerospace and Datamax O'Neil and earnings including Sargent Aerospace and Datamax O'Neil, which is used in calculating earnings per share attributable to Sargent Aerospace and Datamax O'Neil. These tables also contain non-GAAP measures of adjusted earnings from continuing operations used in calculating adjusted diluted earnings per common share. Management believes this information is useful to investors to better understand the company's ongoing profitability and facilitates easier comparisons of the company's profitability to prior and future periods and to its peers. The company has also disclosed herein a number of non-GAAP measures related to free cash flow and the ratio of net debt to net capitalization.  Management believes these metrics are important measures of the company's operating performance and liquidity.  Free cash flow information provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase common stock, while the net debt to net capitalization ratio is helpful in evaluating the company's capital structure and the amount of leverage employed.

CONTACT:
Paul Goldberg
Vice President - Investor Relations
(212) 922-1640

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dover-reports-fourth-quarter-and-full-year-2014-results-and-updates-2015-guidance-300026086.html

SOURCE Dover

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