Dover Reports Third Quarter 2023 Results

DOWNERS GROVE, Ill., Oct. 24, 2023 /PRNewswire/ — Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2023. All comparisons are to the comparable period of the prior fiscal year, unless otherwise noted.

Three Months Ended September 30,
Nine Months Ended September 30,
($ in millions, except per share data)
2023
2022
% Change
2023
2022
% Change
U.S. GAAP
Revenue
$       2,153
$       2,158
— %
$       6,332
$       6,369
(1) %
Net earnings 
290
286
1 %
761
802
(5) %
Diluted EPS 
2.06
2.00
3 %
5.41
5.55
(3) %
Non-GAAP
Organic revenue change
(2) %
(1) %
Adjusted net earnings 1
331
324
2 %
892
908
(2) %
Adjusted diluted EPS
2.35
2.26
4 %
6.34
6.29
1 %
1 Q3 and year-to-date 2023 and 2022 adjusted net earnings exclude after tax purchase accounting expenses and restructuring and other costs. Year-to-date 2022 also excludes a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act.
For the quarter ended September 30, 2023, Dover generated revenue of $2.2 billion, in line with the prior year (-2% organic). GAAP net earnings of $290 million increased 1%, and GAAP diluted EPS of $2.06 was up 3%. On an adjusted basis, net earnings of $331 million increased 2% and adjusted diluted EPS of $2.35 was up 4%.
For the nine months ended September 30, 2023, Dover generated revenue of $6.3 billion, a decrease of 1% (-1% organic). GAAP net earnings of $761 million decreased 5%, and GAAP diluted EPS of $5.41 was down 3%. On an adjusted basis, net earnings of $892 million decreased 2%, and adjusted diluted EPS of $6.34 was up 1%.
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, “The third quarter results were encouraging. We are especially proud of our margin performance as we offset negative product mix with productivity and disciplined pricing. We are well on our way to delivering on our margin targets outlined during the investor and analyst meeting last March.
“Revenue and order rates improved sequentially in the quarter on improving activity across several end markets and a return to normal seasonality after several years of disruptions from the pandemic and follow-on supply chain issues. Our backlog continued to normalize in the quarter in tandem with lead times as we shipped longer-dated orders from our books.
“Consolidated segment margin reached a record-high level in the quarter, driven by cost containment actions and solid execution by our operating teams. The proactive structural cost reductions we implemented over the last twelve months are paying off and set a foundation for continued robust margin conversion.
“Our two recent portfolio moves—the acquisition of FW Murphy and the sale of De-Sta-Co—continued our portfolio evolution towards higher-growth and higher-return businesses at attractive valuations. These moves clearly follow the portfolio intent and priorities that we reiterated at our investor day earlier this year. Our balance sheet position and cash flow are strong and provide attractive optionality as we continue to pursue bolt-on acquisitions and opportunistic capital return strategies.
“While we are encouraged by the overall trajectory of the portfolio, we are shifting to a more conservative outlook for the remainder of the year to reflect the changes in certain market conditions we observed in the third quarter. We expect biopharma demand and automotive production curtailment to be headwinds for the balance of the year. The higher carrying costs of channel inventory driven by higher interest rates will continue to weigh on near-term volumes in several end markets, and we will be absorbing elevated transaction and integration costs in the fourth quarter related to our recent and ongoing deal activity. Our channel checks indicate that inventories are close to balancing, and as such we aim to optimize pricing, margin, and cash flow generation instead of maximizing volume in the fourth quarter to set up a solid foundation for organic growth and margin accretion in 2024.”
FULL YEAR 2023 GUIDANCE:
In 2023, Dover expects to generate GAAP EPS in the range of $7.51 to $7.61 (adjusted EPS of $8.75 to $8.85), based on approximately flat full year revenue growth (all-in and organic).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its third quarter and year-to-date results at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, October 24, 2023. 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 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, general economic conditions and conditions in the particular markets in which we operate, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, the impact of interest rate and currency exchange rate fluctuations, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, 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, 2022, 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 2023
 
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data*)
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Revenue
$        2,153,268
$        2,158,291
$       6,332,377
$       6,368,907
Cost of goods and services
1,360,253
1,385,541
4,033,507
4,071,680
Gross profit
793,015
772,750
2,298,870
2,297,227
Selling, general and administrative expenses
420,245
402,339
1,286,999
1,270,615
Operating earnings
372,770
370,411
1,011,871
1,026,612
Interest expense
32,389
29,789
100,407
83,330
Interest income
(3,808)
(1,244)
(8,552)
(2,968)
Other income, net
(10,273)
(11,167)
(20,759)
(17,842)
Earnings before provision for income taxes
354,462
353,033
940,775
964,092
Provision for income taxes
64,709
67,007
180,209
162,295
Net earnings
$           289,753
$           286,026
$          760,566
$          801,797
Net earnings per share:
Basic
$                  2.07
$                  2.01
$                 5.44
$                 5.59
Diluted
$                  2.06
$                  2.00
$                 5.41
$                 5.55
Weighted average shares outstanding:
Basic
139,878
142,506
139,833
143,469
Diluted
140,615
143,257
140,603
144,413
Dividends paid per common share
$                  0.51
$                0.505
$                 1.52
$               1.505
* Per share data may be impacted by rounding.
 
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
REVENUE
Engineered Products
$   497,549
$   473,687
$   504,271
$  1,475,507
$   487,647
$   514,436
$   516,501
$  1,518,584
$   525,048
$  2,043,632
Clean Energy & Fueling
430,729
441,166
466,959
1,338,854
458,395
494,075
464,022
1,416,492
462,015
$  1,878,507
Imaging & Identification
283,091
271,932
276,179
831,202
272,255
275,951
282,371
830,577
293,238
1,123,815
Pumps & Process Solutions
413,881
465,626
431,373
1,310,880
435,195
441,127
433,558
1,309,880
418,355
1,728,235
Climate & Sustainability Technologies
455,325
449,001
475,911
1,380,237
399,078
434,164
462,671
1,295,913
441,811
1,737,724
Intersegment eliminations
(1,552)
(1,326)
(1,425)
(4,303)
(669)
(1,038)
(832)
(2,539)
(1,286)
(3,825)
Total consolidated revenue
$  2,079,023
$  2,100,086
$  2,153,268
$  6,332,377
$  2,051,901
$  2,158,715
$  2,158,291
$  6,368,907
$  2,139,181
$  8,508,088
NET EARNINGS
Segment Earnings:
Engineered Products
$     84,275
$     73,076
$   101,610
$   258,961
$     71,130
$     81,671
$     90,145
$   242,946
$   103,573
$   346,519
Clean Energy & Fueling
73,605
83,616
92,483
249,704
72,962
99,034
90,208
262,204
90,789
352,993
Imaging & Identification
68,315
61,336
70,316
199,967
58,598
61,392
74,477
194,467
73,617
268,084
Pumps & Process Solutions
115,244
129,337
117,907
362,488
146,617
138,048
128,573
413,238
119,780
533,018
Climate & Sustainability Technologies
73,778
76,074
84,060
233,912
53,609
64,181
75,190
192,980
61,504
254,484
Total segment earnings
415,217
423,439
466,376
1,305,032
402,916
444,326
458,593
1,305,835
449,263
1,755,098
Purchase accounting
expenses 1
42,679
40,200
40,320
123,199
53,286
47,019
40,526
140,831
40,272
181,103
Restructuring and other costs 2
14,053
18,143
12,327
44,523
10,552
7,944
8,613
27,109
11,881
38,990
Loss on dispositions 3
—
—
—
—
194
—
—
194
—
194
Corporate expense / other 4,5
40,072
33,922
30,686
104,680
37,404
27,967
27,876
93,247
42,033
135,280
Interest expense
34,214
33,804
32,389
100,407
26,552
26,989
29,789
83,330
33,126
116,456
Interest income
(2,091)
(2,653)
(3,808)
(8,552)
(775)
(949)
(1,244)
(2,968)
(1,462)
(4,430)
Earnings before provision for income taxes
286,290
300,023
354,462
940,775
275,703
335,356
353,033
964,092
323,413
1,287,505
Provision for income taxes
57,716
57,784
64,709
180,209
49,550
45,738
67,007
162,295
59,834
222,129
Net earnings
$   228,574
$   242,239
$   289,753
$   760,566
$   226,153
$   289,618
$   286,026
$   801,797
$   263,579
$  1,065,376
SEGMENT EARNINGS MARGIN
Engineered Products
16.9 %
15.4 %
20.1 %
17.6 %
14.6 %
15.9 %
17.5 %
16.0 %
19.7 %
17.0 %
Clean Energy & Fueling
17.1 %
19.0 %
19.8 %
18.7 %
15.9 %
20.0 %
19.4 %
18.5 %
19.7 %
18.8 %
Imaging & Identification
24.1 %
22.6 %
25.5 %
24.1 %
21.5 %
22.2 %
26.4 %
23.4 %
25.1 %
23.9 %
Pumps & Process Solutions
27.8 %
27.8 %
27.3 %
27.7 %
33.7 %
31.3 %
29.7 %
31.5 %
28.6 %
30.8 %
Climate & Sustainability Technologies
16.2 %
16.9 %
17.7 %
16.9 %
13.4 %
14.8 %
16.3 %
14.9 %
13.9 %
14.6 %
Total segment earnings margin
20.0 %
20.2 %
21.7 %
20.6 %
19.6 %
20.6 %
21.2 %
20.5 %
21.0 %
20.6 %
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 relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges.
3 Loss 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 and digital overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters.
5 Q4 and FY 2022 include a $6.3 million settlement charge related to our U.S. qualified defined benefit plan.
 
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
 
Earnings Per Share
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
Net earnings per share:
Basic
$      1.64
$      1.73
$      2.07
$      5.44
$      1.57
$      2.01
$      2.01
$      5.59
$      1.88
$        7.47
Diluted
$      1.63
$      1.72
$      2.06
$      5.41
$      1.56
$      2.00
$      2.00
$      5.55
$      1.87
$        7.42
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings
$  228,574
$  242,239
$  289,753
$  760,566
$  226,153
$  289,618
$  286,026
$  801,797
$  263,579
$  1,065,376
Weighted average shares outstanding:
Basic
139,757
139,862
139,878
139,833
144,087
143,832
142,506
143,469
140,343
142,681
Diluted
140,616
140,578
140,615
140,603
145,329
144,669
143,257
144,413
141,168
143,595
* 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
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
Adjusted net earnings:
Net earnings
$  228,574
$  242,239
$  289,753
$  760,566
$  226,153
$  289,618
$  286,026
$ 801,797
$  263,579
$  1,065,376
Purchase accounting expenses, pre-tax 1
42,679
40,200
40,320
123,199
53,286
47,019
40,526
140,831
40,272
181,103
Purchase accounting expenses, tax impact 2
(9,599)
(9,012)
(8,966)
(27,577)
(12,538)
(11,013)
(9,494)
(33,045)
(8,689)
(41,734)
Restructuring and other costs, pre-tax 3
14,053
18,143
12,327
44,523
10,552
7,944
8,613
27,109
11,881
38,990
Restructuring and other costs, tax impact 2
(2,990)
(3,665)
(2,556)
(9,211)
(2,191)
(1,803)
(1,921)
(5,915)
(2,311)
(8,226)
Loss on dispositions, pre-tax 4
—
—
—
—
194
—
—
194
—
194
Loss on dispositions, tax-impact 2
—
—
—
—
(27)
—
—
(27)
—
(27)
Tax Cuts and Jobs Act 5
—
—
—
—
—
(22,579)
—
(22,579)
—
(22,579)
Adjusted net earnings
$  272,717
$  287,905
$  330,878
$  891,500
$  275,429
$  309,186
$  323,750
$ 908,365
$  304,732
$  1,213,097
Adjusted diluted net earnings per share:
Diluted net earnings per share
$       1.63
$       1.72
$       2.06
$       5.41
$       1.56
$       2.00
$       2.00
$       5.55
$       1.87
$        7.42
Purchase accounting expenses, pre-tax 1
0.30
0.29
0.29
0.88
0.37
0.33
0.28
0.98
0.29
1.27
Purchase accounting expenses, tax impact 2
(0.07)
(0.06)
(0.06)
(0.20)
(0.09)
(0.08)
(0.07)
(0.23)
(0.06)
(0.30)
Restructuring and other costs, pre-tax 3
0.10
0.13
0.09
0.32
0.07
0.05
0.06
0.19
0.08
0.26
Restructuring and other costs, tax impact 2
(0.02)
(0.03)
(0.02)
(0.07)
(0.02)
(0.01)
(0.01)
(0.04)
(0.02)
(0.06)
Loss on dispositions, pre-tax 4
—
—
—
—
—
—
—
—
—
—
Loss on dispositions, tax-impact 2
—
—
—
—
—
—
—
—
—
—
Tax Cuts and Jobs Act 5
—
—
—
—
—
(0.16)
—
(0.16)
—
(0.16)
Adjusted diluted net earnings per share
$       1.94
$       2.05
$       2.35
$       6.34
$       1.90
$       2.14
$       2.26
$       6.29
$       2.16
$        8.45
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 FY 2022 include $12,487, $7,158, and $19,869 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 relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges. Q3 and Q3 YTD 2023 include $3,302 of non-cash asset impairment charges for our Climate & Sustainability Technologies segment. Q1 and FY 2022 include $5,457 of non-cash foreign currency translation losses reclassified to earnings included within restructuring and other costs and $2,117 related to write-off of assets due to an exit from certain Latin America countries for our Climate & Sustainability Technologies segment.
4 Q1 2022 and FY 2022 represents working capital adjustments related to the disposition of Unified Brands and the Race Winning Brands equity method investment in Q4 2021.
5 Q2 and FY 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
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
ADJUSTED SEGMENT EBITDA
Engineered Products:
Segment earnings
$ 84,275
$  73,076
$  101,610
$   258,961
$  71,130
$  81,671
$  90,145
$   242,946
$ 103,573
$   346,519
Other depreciation and amortization 1
7,070
7,300
7,306
21,676
7,274
6,799
6,819
20,892
6,853
27,745
Adjusted segment EBITDA 2
91,345
80,376
108,916
280,637
78,404
88,470
96,964
263,838
110,426
374,264
Adjusted segment EBITDA margin 2
18.4 %
17.0 %
21.6 %
19.0 %
16.1 %
17.2 %
18.8 %
17.4 %
21.0 %
18.3 %
Clean Energy & Fueling:
Segment earnings
$ 73,605
$  83,616
$  92,483
$   249,704
$  72,962
$  99,034
$  90,208
$   262,204
$  90,789
$   352,993
Other depreciation and amortization 1
7,046
7,541
7,686
22,273
8,466
6,533
6,893
21,892
6,923
28,815
Adjusted segment EBITDA 2
80,651
91,157
100,169
271,977
81,428
105,567
97,101
284,096
97,712
381,808
Adjusted segment EBITDA margin 2
18.7 %
20.7 %
21.5 %
20.3 %
17.8 %
21.4 %
20.9 %
20.1 %
21.1 %
20.3 %
Imaging & Identification:
Segment earnings
$ 68,315
$  61,336
$  70,316
$   199,967
$  58,598
$  61,392
$  74,477
$   194,467
$  73,617
$   268,084
Other depreciation and amortization 1
3,394
3,745
3,972
11,111
3,497
3,496
3,372
10,365
3,820
14,185
Adjusted segment EBITDA 2
71,709
65,081
74,288
211,078
62,095
64,888
77,849
204,832
77,437
282,269
Adjusted segment EBITDA margin 2
25.3 %
23.9 %
26.9 %
25.4 %
22.8 %
23.5 %
27.6 %
24.7 %
26.4 %
25.1 %
Pumps & Process Solutions:
Segment earnings
$  115,244
$  129,337
$  117,907
$   362,488
$  146,617
$  138,048
$  128,573
$   413,238
$ 119,780
$   533,018
Other depreciation and amortization 1
10,939
11,609
12,052
34,600
9,922
9,787
10,137
29,846
10,993
40,839
Adjusted segment EBITDA 2
126,183
140,946
129,959
397,088
156,539
147,835
138,710
443,084
130,773
573,857
Adjusted segment EBITDA margin 2
30.5 %
30.3 %
30.1 %
30.3 %
36.0 %
33.5 %
32.0 %
33.8 %
31.3 %
33.2 %
Climate & Sustainability Technologies:
Segment earnings
$ 73,778
$  76,074
$  84,060
$   233,912
$  53,609
$  64,181
$  75,190
$   192,980
$  61,504
$   254,484
Other depreciation and amortization 1
6,624
6,895
6,954
20,473
6,495
6,443
6,736
19,674
6,530
26,204
Adjusted segment EBITDA 2
80,402
82,969
91,014
254,385
60,104
70,624
81,926
212,654
68,034
280,688
Adjusted segment EBITDA margin 2
17.7 %
18.5 %
19.1 %
18.4 %
15.1 %
16.3 %
17.7 %
16.4 %
15.4 %
16.2 %
Total Segments:
Total segment earnings 2, 3
$  415,217
$  423,439
$  466,376
$  1,305,032
$  402,916
$  444,326
$  458,593
$  1,305,835
$ 449,263
$  1,755,098
Other depreciation and amortization 1
35,073
37,090
37,970
110,133
35,654
33,058
33,957
102,669
35,119
137,788
Total Adjusted segment EBITDA 2
450,290
460,529
504,346
1,415,165
438,570
477,384
492,550
1,408,504
484,382
1,892,886
Total Adjusted segment EBITDA margin 2
21.7 %
21.9 %
23.4 %
22.3 %
21.4 %
22.1 %
22.8 %
22.1 %
22.6 %
22.2 %
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 Refer to Quarterly Segment Information section for reconciliation of total segment earnings to net earnings.
 
DOVER CORPORATION
QUARTERLY NET EARNINGS TO ADJUSTED SEGMENT EBITDA RECONCILIATION (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
Net earnings
$  228,574
$  242,239
$  289,753
$   760,566
$  226,153
$  289,618
$  286,026
$  801,797
$  263,579
$  1,065,376
Provision for income taxes
57,716
57,784
64,709
180,209
49,550
45,738
67,007
162,295
59,834
222,129
Earnings before provision for income taxes
286,290
300,023
354,462
940,775
275,703
335,356
353,033
964,092
323,413
1,287,505
Interest income
(2,091)
(2,653)
(3,808)
(8,552)
(775)
(949)
(1,244)
(2,968)
(1,462)
(4,430)
Interest expense
34,214
33,804
32,389
100,407
26,552
26,989
29,789
83,330
33,126
116,456
Corporate expense / other 1,7
40,072
33,922
30,686
104,680
37,404
27,967
27,876
93,247
42,033
135,280
Loss on dispositions 2
—
—
—
—
194
—
—
194
—
194
Restructuring and other costs 3
14,053
18,143
12,327
44,523
10,552
7,944
8,613
27,109
11,881
38,990
Purchase accounting expenses 4
42,679
40,200
40,320
123,199
53,286
47,019
40,526
140,831
40,272
181,103
Total segment earnings 6
415,217
423,439
466,376
1,305,032
402,916
444,326
458,593
1,305,835
449,263
1,755,098
Add: Other depreciation and amortization 5
35,073
37,090
37,970
110,133
35,654
33,058
33,957
102,669
35,119
137,788
Total adjusted segment EBITDA 6
$  450,290
$  460,529
$  504,346
1,415,165
$  438,570
$  477,384
$  492,550
$  1,408,504
$  484,382
$  1,892,886
1 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 and digital overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters.
2 Loss on dispositions includes working capital adjustments related to dispositions.
3 Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and otherasset charges.
4 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.
5 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.
6 Refer to Non-GAAP Disclosures section for definition.
7 Q4 and FY 2022 include a $6.3 million settlement charge related to our U.S. qualified defined benefit plan.
 
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
2023
Q3
Q3 YTD
Organic
Engineered Products
(3.0) %
(2.5) %
Clean Energy & Fueling
(0.2) %
(4.1) %
Imaging & Identification
(3.6) %
1.5 %
Pumps & Process Solutions
(7.3) %
(4.5) %
Climate & Sustainability Technologies
1.8 %
7.0 %
Total Organic
(2.4) %
(0.9) %
Acquisitions
1.0 %
0.9 %
Currency translation
1.2 %
(0.6) %
Total*
(0.2) %
(0.6) %
 * Totals may be impacted by rounding.
2023
Q3
Q3 YTD
Organic
United States
(7.3) %
(4.6) %
Other Americas
13.1 %
14.6 %
Europe
(5.2) %
(2.1) %
Asia
(3.4) %
(1.8) %
Other
72.8 %
41.6 %
Total Organic
(2.4) %
(0.9) %
Acquisitions
1.0 %
0.9 %
Currency translation
1.2 %
(0.6) %
Total*
(0.2) %
(0.6) %
* Totals may be impacted by rounding.
  
Adjusted EPS Guidance Reconciliation
Range
2023 Guidance for Earnings per Share (GAAP)
$          7.51
$          7.61
Purchase accounting expenses, net
0.91
Restructuring and other costs, net
0.33
2023 Guidance for Adjusted Earnings per Share (Non-GAAP)
$          8.75
$          8.85
* 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
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
Net Cash Flows Provided By (Used In):
Operating activities
$  241,284
$  195,254
$  383,457
$  819,995
$  23,683
$  178,773
$  264,625
$  467,081
$  338,643
$  805,724
Investing activities
(43,556)
(42,454)
(50,243)
(136,253)
(46,963)
(68,890)
(286,208)
(402,061)
(138,863)
(540,924)
Financing activities
(306,565)
(137,924)
(312,716)
(757,205)
(75,204)
120,469
(178,844)
(133,579)
(126,686)
(260,265)
Quarterly Free Cash Flow (Non-GAAP)
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
Cash flow from operating activities
$  241,284
$  195,254
$  383,457
$  819,995
$  23,683
$  178,773
$  264,625
$  467,081
$  338,643
$  805,724
Less: Capital expenditures
(48,375)
(40,079)
(43,128)
(131,582)
(50,381)
(50,196)
(65,462)
(166,039)
(54,923)
(220,962)
Free cash flow
$  192,909
$  155,175
$  340,329
$  688,413
$ (26,698)
$  128,577
$  199,163
$  301,042
$  283,720
$  584,762
Cash flow from operating activities as a percentage of revenue
11.6 %
9.3 %
17.8 %
12.9 %
1.2 %
8.3 %
12.3 %
7.3 %
15.8 %
9.5 %
Cash flow from operating activities as a percentage of adjusted netearnings
88.5 %
67.8 %
115.9 %
92.0 %
8.6 %
57.8 %
81.7 %
51.4 %
111.1 %
66.4 %
Free cash flow as a percentage of revenue
9.3 %
7.4 %
15.8 %
10.9 %
(1.3) %
6.0 %
9.2 %
4.7 %
13.3 %
6.9 %
Free cash flow as a percentage of adjusted net earnings
70.7 %
53.9 %
102.9 %
77.2 %
(9.7) %
41.6 %
61.5 %
33.1 %
93.1 %
48.2 %
 
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
2023
2022
Q1
Q2
Q3
Q3 YTD
Q1
Q2
Q3
Q3 YTD
Q4
FY 2022
BOOKINGS
Engineered Products
$  536,472
$  489,131
$  576,641
$  1,602,244
$  541,035
$  452,668
$  512,374
$ 1,506,077
$  498,249
$ 2,004,326
Clean Energy & Fueling
454,526
440,137
449,663
1,344,326
501,491
487,861
432,259
1,421,611
399,414
1,821,025
Imaging & Identification
290,712
262,092
271,113
823,917
307,104
292,136
281,789
881,029
273,170
1,154,199
Pumps & Process Solutions
464,297
394,317
363,111
1,221,725
459,790
471,693
415,253
1,346,736
362,468
1,709,204
Climate & Sustainability Technologies
300,014
345,363
347,466
992,843
444,852
403,574
422,820
1,271,246
388,527
1,659,773
Intersegment eliminations
(1,530)
(1,917)
(849)
(4,296)
(2,295)
(1,207)
(423)
(3,925)
(1,391)
(5,316)
Total consolidated bookings
$  2,044,491
$  1,929,123
$  2,007,145
$  5,980,759
$  2,251,977
$  2,106,725
$  2,064,072
$ 6,422,774
$  1,920,437
$ 8,343,211
BACKLOG
Engineered Products
$  755,442
$  771,888
$  841,722
$  830,135
$  759,589
$  742,766
$  720,114
Clean Energy & Fueling
337,116
339,322
317,719
426,342
411,350
368,050
312,142
Imaging & Identification
236,215
227,646
217,824
243,411
255,255
241,896
232,812
Pumps & Process Solutions
742,890
676,191
597,745
704,935
715,646
679,955
686,512
Climate & Sustainability Technologies
899,379
797,307
674,578
1,218,155
1,186,180
1,139,737
1,068,644
Intersegment eliminations
(1,083)
(1,594)
(823)
(1,756)
(1,839)
(1,439)
(1,893)
Total consolidated backlog
$  2,969,959
$  2,810,760
$  2,648,765
$  3,421,222
$  3,326,181
$  3,170,965
$  3,018,331
2023
Q3
Q3 YTD
BOOKINGS GROWTH FACTORS
Organic
Engineered Products
11.6 %
6.8 %
Clean Energy & Fueling
3.5 %
(4.0) %
Imaging & Identification
(5.4) %
(5.2) %
Pumps & Process Solutions
(15.6) %
(12.0) %
Climate & Sustainability Technologies
(18.9) %
(21.3) %
Total Organic
(4.1) %
(6.7) %
Acquisitions
0.3 %
0.7 %
Currency translation
1.0 %
(0.9) %
Total*
(2.8) %
(6.9) %
* 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 represent 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 liquidity 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 pursuant to the exception provided in Item 10(e)(1)(i)(B) of Regulation S-K 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
 

View original content to download multimedia:https://www.prnewswire.com/news-releases/dover-reports-third-quarter-2023-results-301965060.html
SOURCE Dover 

DOWNERS GROVE, Ill., Oct. 24, 2023 /PRNewswire/ — Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2023. All comparisons are to the comparable period of the prior fiscal year, unless otherwise noted.

For the quarter ended September 30, 2023, Dover generated revenue of $2.2 billion, in line with the prior year (-2% organic). GAAP net earnings of $290 million increased 1%, and GAAP diluted EPS of $2.06 was up 3%. On an adjusted basis, net earnings of $331 million increased 2% and adjusted diluted EPS of $2.35 was up 4%.

For the nine months ended September 30, 2023, Dover generated revenue of $6.3 billion, a decrease of 1% (-1% organic). GAAP net earnings of $761 million decreased 5%, and GAAP diluted EPS of $5.41 was down 3%. On an adjusted basis, net earnings of $892 million decreased 2%, and adjusted diluted EPS of $6.34 was up 1%.

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, “The third quarter results were encouraging. We are especially proud of our margin performance as we offset negative product mix with productivity and disciplined pricing. We are well on our way to delivering on our margin targets outlined during the investor and analyst meeting last March.

“Revenue and order rates improved sequentially in the quarter on improving activity across several end markets and a return to normal seasonality after several years of disruptions from the pandemic and follow-on supply chain issues. Our backlog continued to normalize in the quarter in tandem with lead times as we shipped longer-dated orders from our books.

“Consolidated segment margin reached a record-high level in the quarter, driven by cost containment actions and solid execution by our operating teams. The proactive structural cost reductions we implemented over the last twelve months are paying off and set a foundation for continued robust margin conversion.

“Our two recent portfolio moves—the acquisition of FW Murphy and the sale of De-Sta-Co—continued our portfolio evolution towards higher-growth and higher-return businesses at attractive valuations. These moves clearly follow the portfolio intent and priorities that we reiterated at our investor day earlier this year. Our balance sheet position and cash flow are strong and provide attractive optionality as we continue to pursue bolt-on acquisitions and opportunistic capital return strategies.

“While we are encouraged by the overall trajectory of the portfolio, we are shifting to a more conservative outlook for the remainder of the year to reflect the changes in certain market conditions we observed in the third quarter. We expect biopharma demand and automotive production curtailment to be headwinds for the balance of the year. The higher carrying costs of channel inventory driven by higher interest rates will continue to weigh on near-term volumes in several end markets, and we will be absorbing elevated transaction and integration costs in the fourth quarter related to our recent and ongoing deal activity. Our channel checks indicate that inventories are close to balancing, and as such we aim to optimize pricing, margin, and cash flow generation instead of maximizing volume in the fourth quarter to set up a solid foundation for organic growth and margin accretion in 2024.”

FULL YEAR 2023 GUIDANCE:

In 2023, Dover expects to generate GAAP EPS in the range of $7.51 to $7.61 (adjusted EPS of $8.75 to $8.85), based on approximately flat full year revenue growth (all-in and organic).

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its third quarter and year-to-date results at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, October 24, 2023. 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 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, general economic conditions and conditions in the particular markets in which we operate, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, the impact of interest rate and currency exchange rate fluctuations, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, 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, 2022, 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.

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 represent 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 liquidity 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 pursuant to the exception provided in Item 10(e)(1)(i)(B) of Regulation S-K 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.

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SOURCE Dover