Dover Reports Fourth Quarter And Full Year 2020 Results; Provides 2021 Guidance

Rhea-AI Summary

Dover reported its fourth quarter and full year 2020 financial results, revealing fourth quarter revenue of $1.78 billion and a 6% decline in full year revenue to $6.68 billion. GAAP net earnings rose 8% to $182 million in Q4, while adjusted net earnings saw a 5% decrease for the year. The company anticipates 2021 growth, projecting GAAP EPS of $5.42 to $5.62 and adjusted EPS of $6.25 to $6.45, alongside an 8% to 10% revenue increase. Management highlights strong underlying operations and a focus on productivity initiatives.

Positive

• Q4 net earnings increased by 8% to $182 million.
• GAAP diluted EPS rose by 9% to $1.25 in Q4.
• Projected GAAP EPS for 2021 is $5.42 to $5.62, indicating expected growth.
• Management highlighted strong execution and good cash flow metrics despite lower revenue.

Negative

• 2020 revenue declined by 6% year-over-year to $6.68 billion.
• Adjusted net earnings fell by 5% to $824 million for the full year.
• Organic revenue change for Q4 was down by 2% year-over-year.

DOWNERS GROVE, Ill., Jan. 28, 2021 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the fourth quarter and full year ended December 31, 2020.

		Three Months Ended December 31,											Twelve Months Ended December 31,
($ in millions, except per share data)		2020				2019				% Change			2020				2019				% Change
U.S. GAAP
Revenue		$	1,780			$	1,776			—	%		$	6,684			$	7,136			(6)	%
Net earnings 1		182				168				8	%		683				678				1	%
Diluted EPS		1.25				1.15				9	%		4.70				4.61				2	%
Non-GAAP
Organic revenue change										(2)	%										(7)	%
Adjusted net earnings 2		225				226				—	%		824				872				(5)	%
Adjusted diluted EPS		1.55				1.54				1	%		5.67				5.93				(4)	%

 

1	Q4 2020 and 2019 net earnings include rightsizing and other costs of $16.5 million and $14.2 million, respectively. Q4 2019 also includes a $18.4 million loss on extinguishment of debt. Full year 2020 and 2019 net earnings include rightsizing and other costs of $40.7 million and $25.4 million, respectively. Full year 2020 also includes a $3.9 million non-cash gain on the sale of Chino, and full year 2019 includes a $46.9 million non-cash loss on assets held for sale related to Finder as well as a $18.4 million loss on extinguishment of debt.
2	Q4 2020 and 2019 adjusted net earnings exclude after tax acquisition-related amortization costs of $26.3 million and $25.1 million, respectively, and rightsizing and other costs of $16.5 million and $14.2 million, respectively. Q4 2019 also excludes a $18.4 million loss on extinguishment of debt. Full year 2020 and 2019 adjusted net earnings exclude acquisition-related amortization costs of $104.1 million and $103.6 million, respectively, and rightsizing and other costs of $40.7 million and $25.4 million, respectively. Full year 2020 also excludes a $3.9 million non-cash gain on the sale of Chino, and full year 2019 excludes a $46.9 million non-cash loss on assets held for sale related to Finder as well as a $18.4 million loss on extinguishment of debt.

 

For the quarter ended December 31, 2020, Dover generated revenue of $1.8 billion, a slight increase compared to the fourth quarter of the prior year (-2% organic). GAAP net earnings of $182 million increased 8%, and GAAP diluted EPS of $1.25 was up 9%. On an adjusted basis, net earnings of $225 million declined slightly, and adjusted diluted EPS of $1.55 was up 1% versus the comparable quarter of the prior year.

For the full year ended December 31, 2020, Dover generated revenue of $6.7 billion, a decline of 6% compared to the prior year (-7% organic). GAAP net earnings of $683 million increased 1%, and GAAP diluted EPS of $4.70 increased 2% year-over-year. On an adjusted basis, net earnings of $824 million declined 5%, and adjusted diluted EPS of $5.67 was down 4% versus 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 solid results in the fourth quarter despite lingering economic and operational effects of the pandemic. Our efficiency and productivity initiatives drove improvement in segment margins and cash flow metrics despite lower revenue for the full year. We advanced our operational priorities with notable progress in the center-led digital, operational, and shared back office and engineering capabilities. These initiatives have contributed to our recent results and will continue to drive improvement ahead. Our strong execution was complemented by disciplined capital allocation, including several strategic bolt-on acquisitions that enhance our businesses with new capabilities and attractive end-market exposures.

"Improving market conditions coupled with a robust demand backlog enable us to look into 2021 with constructive optimism. With continued progress in our ongoing productivity and cost initiatives, we believe we are well-positioned to deliver robust top-line growth, margin expansion and EPS accretion in 2021. We also enter the year with a healthy balance sheet that will continue to support organic and inorganic capital deployment to continue enhancing our portfolio."

"We are pleased to have 2020 in the rear view mirror for all the obvious reasons. On behalf of Dover Corporation's Board of Directors, I would like to thank our entire team for their extraordinary efforts in the past 12 months. We were given a unique opportunity to demonstrate the resilience of the Dover team and our business portfolio in 2020, and we can all be proud of the results we achieved together."

FULL YEAR 2021 GUIDANCE:

In 2021, Dover expects to generate GAAP EPS in the range of $5.42 to $5.62 (adjusted EPS of $6.25 to $6.45), based on full year revenue growth of 8% to 10% (5% to 6% on an organic basis). A full reconciliation between forecasted GAAP and forecasted adjusted measures is included as an exhibit herein.

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its fourth quarter and full year 2020 results as well as 2021 guidance at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, January 28, 2021. 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 fourth quarter and full year results and its operating segments can be found on the Company's website.

ABOUT DOVER:

Dover is a diversified global manufacturer and solutions provider with annual revenue of approximately $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 60 years, our team of over 23,000 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, other general economic conditions and conditions in the particular markets in which we operate, 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, 2019, 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 - FOURTH QUARTER AND FULL YEAR 2020   DOVER CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)(in thousands, except per share data)
	Three Months Ended December 31,								Years Ended December 31,
	2020				2019				2020				2019
Revenue	$	1,780,390			$	1,775,589			$	6,683,760			$	7,136,397
Cost of goods and services	1,128,941				1,124,274				4,209,741				4,515,459
Gross profit	651,449				651,315				2,474,019				2,620,938
Selling, general, and administrative expenses	405,520				403,223				1,541,032				1,599,098
Loss on assets held for sale	—				—				—				46,946
Operating earnings	245,929				248,092				932,987				974,894
Interest expense	28,234				30,846				111,937				125,818
Interest income	(700)				(1,428)				(3,571)				(4,526)
Gain on sale of a business	—				—				(5,213)				—
Loss on extinguishment of debt	—				23,543				—				23,543
Other income, net	(2,013)				(1,891)				(11,900)				(12,950)
Earnings before provision for income taxes	220,408				197,022				841,734				843,009
Provision for income taxes	38,302				28,900				158,283				165,091
Net earnings	$	182,106			$	168,122			$	683,451			$	677,918
Net earnings per share:
Basic	$	1.27			$	1.16			$	4.74			$	4.67
Diluted	$	1.25			$	1.15			$	4.70			$	4.61
Weighted average shares outstanding:
Basic	143,954				144,966				144,050				145,198
Diluted	145,355				146,790				145,393				146,992
Dividends paid per common share	$	0.50			$	0.49			$	1.97			$	1.94
* Per share data may be impacted by rounding.

 

DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (unaudited)(in thousands)
	2020																2019
	Q1			Q2			Q3			Q4			FY 2020				Q1			Q2			Q3			Q4			FY 2019
REVENUE
Engineered Products	$	408,160		$	342,380		$	386,562		$	394,175		$	1,531,277			$	418,851		$	429,928		$	426,689		$	422,089		$	1,697,557
Fueling Solutions	359,982			326,495			380,511			409,294			1,476,282				373,050			390,586			411,769			444,772			1,620,177
Imaging & Identification	256,765			227,977			265,690			287,746			1,038,178				268,354			266,588			275,109			274,420			1,084,471
Pumps & Process Solutions	319,536			309,095			347,875			347,497			1,324,003				330,219			338,924			341,337			328,048			1,338,528
Refrigeration & Food Equipment	311,913			293,527			368,395			342,255			1,316,090				334,643			385,474			370,335			306,165			1,396,617
Intra-segment eliminations	(417)			(299)			(777)			(577)			(2,070)				(360)			(794)			106			95			(953)
Total consolidated revenue	$	1,655,939		$	1,499,175		$	1,748,256		$	1,780,390		$	6,683,760			$	1,724,757		$	1,810,706		$	1,825,345		$	1,775,589		$	7,136,397
NET EARNINGS
Segment Earnings:
Engineered Products	$	69,094		$	47,702		$	64,890		$	56,481		$	238,167			$	67,119		$	77,129		$	74,367		$	73,233		$	291,848
Fueling Solutions	53,498			47,214			66,601			69,661			236,974				37,230			52,637			68,069			73,937			231,873
Imaging & Identification	51,482			38,046			51,928			52,017			193,473				55,955			54,641			61,655			57,233			229,484
Pumps & Process Solutions 1	66,079			67,702			89,786			81,709			305,276				14,991			76,278			77,433			71,379			240,081
Refrigeration & Food Equipment 2	23,529			11,459			40,159			27,725			102,872				24,807			44,375			35,211			14,439			118,832
Total segment earnings (EBIT)	263,682			212,123			313,364			287,593			1,076,762				200,102			305,060			316,735			290,221			1,112,118
Corporate expense / other3	24,097			27,311			35,603			39,651			126,662				30,866			24,512			28,658			63,781			147,817
Interest expense	27,268			28,711			27,724			28,234			111,937				31,808			31,754			31,410			30,846			125,818
Interest income	(1,183)			(728)			(960)			(700)			(3,571)				(890)			(945)			(1,263)			(1,428)			(4,526)
Earnings before provision for income taxes	213,500			156,829			250,997			220,408			841,734				138,318			249,739			257,930			197,022			843,009
Provision for income taxes	37,221			32,063			50,697			38,302			158,283				32,613			51,654			51,924			28,900			165,091
Net earnings	$	176,279		$	124,766		$	200,300		$	182,106		$	683,451			$	105,705		$	198,085		$	206,006		$	168,122		$	677,918
SEGMENT MARGIN
Engineered Products	16.9 %			13.9 %			16.8 %			14.3 %			15.6 %				16.0 %			17.9 %			17.4 %			17.4 %			17.2 %
Fueling Solutions	14.9 %			14.5 %			17.5 %			17.0 %			16.1 %				10.0 %			13.5 %			16.5 %			16.6 %			14.3 %
Imaging & Identification	20.1 %			16.7 %			19.5 %			18.1 %			18.6 %				20.9 %			20.5 %			22.4 %			20.9 %			21.2 %
Pumps & Process Solutions 1	20.7 %			21.9 %			25.8 %			23.5 %			23.1 %				4.5 %			22.5 %			22.7 %			21.8 %			17.9 %
Refrigeration & Food Equipment 2	7.5 %			3.9 %			10.9 %			8.1 %			7.8 %				7.4 %			11.5 %			9.5 %			4.7 %			8.5 %
Total segment operating margin	15.9 %			14.1 %			17.9 %			16.2 %			16.1 %				11.6 %			16.8 %			17.4 %			16.3 %			15.6 %
DEPRECIATION AND AMORTIZATION EXPENSE
Engineered Products	$	10,122		$	9,722		$	10,717		$	12,042		$	42,603			$	10,359		$	10,452		$	10,095		$	10,126		$	41,032
Fueling Solutions	18,339			17,968			18,014			18,482			72,803				17,879			18,945			18,744			19,477			75,045
Imaging & Identification	8,769			9,224			9,809			10,576			38,378				7,435			7,413			7,360			8,322			30,530
Pumps & Process Solutions	18,336			17,572			17,206			19,077			72,191				17,548			16,201			16,018			17,817			67,584
Refrigeration & Food Equipment	11,548			11,421			12,081			11,491			46,541				13,011			12,777			13,047			12,525			51,360
Corporate	1,638			1,696			1,662			1,539			6,535				1,506			1,981			1,523			1,726			6,736
Total depreciation and amortization expense	$	68,752		$	67,603		$	69,489		$	73,207		$	279,051			$	67,738		$	67,769		$	66,787		$	69,993		$	272,287
1 Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder Pompe S.r.l.
2 Q1, Q2, Q3, and FY 2020 include a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain, respectively, on the sale of the Chino, California branch of The AMS Group ("AMS Chino"). Q2 and FY 2020 also include a $3,640 write-off of assets.
3 Q4 and FY 2019 include a $23,543 loss on early extinguishment of debt.

 

DOVER CORPORATION QUARTERLY EARNINGS PER SHARE (unaudited)(in thousands, except per share data*)
Earnings Per Share
	2020																2019
	Q1			Q2			Q3			Q4			FY 2020				Q1			Q2			Q3			Q4			FY 2019
Net earnings per share:
Basic	$	1.22		$	0.87		$	1.39		$	1.27		$	4.74			$	0.73		$	1.36		$	1.42		$	1.16		$	4.67
Diluted	$	1.21		$	0.86		$	1.38		$	1.25		$	4.70			$	0.72		$	1.35		$	1.40		$	1.15		$	4.61
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings	$	176,279		$	124,766		$	200,300		$	182,106		$	683,451			$	105,705		$	198,085		$	206,006		$	168,122		$	677,918
Weighted average shares outstanding:
Basic	144,259			143,955			144,032			143,954			144,050				145,087			145,366			145,372			144,966			145,198
Diluted	145,782			144,995			145,289			145,355			145,393				146,911			147,179			147,051			146,790			146,992
* Per share data may be impacted by rounding.

 

DOVER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)(in thousands)
	December 31, 2020				December 31, 2019
Assets:
Cash and cash equivalents	$	513,075			$	397,253
Receivables, net of allowances	1,137,223				1,217,190
Inventories, net	835,804				806,141
Prepaid and other current assets	133,085				127,846
Property, plant and equipment, net	897,326				842,318
Goodwill	4,072,542				3,783,347
Intangible assets, net	1,083,772				1,055,014
Other assets and deferred charges	479,247				440,368
Total assets	$	9,152,074			$	8,669,477
Liabilities and Stockholders' Equity:
Notes payable	$	—			$	84,700
Payables, accrued expenses and other current liabilities	1,738,798				1,663,391
Deferred taxes and other non-current liabilities	918,674				903,010
Long-term debt	3,108,829				2,985,716
Stockholders' equity	3,385,773				3,032,660
Total liabilities and stockholders' equity	$	9,152,074			$	8,669,477

 

DOVER CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(in thousands)
	Years Ended December 31,
	2020				2019
Operating activities:
Net earnings	$	683,451			$	677,918
Loss on assets held for sale	—				46,946
Loss on extinguishment of debt	—				23,543
Depreciation and amortization	279,051				272,287
Stock-based compensation	25,026				29,702
Contributions to employee benefit plans	(19,801)				(21,436)
Gain on sale of businesses	(5,213)				—
Net change in assets and liabilities	142,296				(83,654)
Net cash provided by operating activities	1,104,810				945,306
Investing activities:
Additions to property, plant and equipment	(165,692)				(186,804)
Acquisitions (net of cash and cash equivalents acquired)	(335,786)				(215,687)
Proceeds from the sale of property, plant and equipment	7,207				4,168
Proceeds from the sale of businesses	15,400				24,218
Other	(2,508)				(10,150)
Net cash used in investing activities	(481,379)				(384,255)
Financing activities:
Change in commercial paper and notes payable, net	(84,700)				(135,650)
Net increase in long-term debt	—				42,357
Dividends to stockholders	(284,312)				(282,197)
Purchase of common stock	(106,279)				(143,280)
Payments to settle employee tax obligations on exercise	(28,476)				(37,370)
Other	(2,523)				(1,902)
Net cash used in financing activities	(506,290)				(558,042)
Effect of exchange rate changes on cash	(1,319)				(1,977)
Net increase in cash and cash equivalents	115,822				1,032
Cash and cash equivalents at beginning of period	397,253				396,221
Cash and cash equivalents at end of period	$	513,075			$	397,253

 

DOVER CORPORATION QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP) (unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
	2020																2019
	Q1			Q2			Q3			Q4			FY 2020				Q1			Q2			Q3			Q4			FY 2019
Adjusted net earnings:
Net earnings	$	176,279		$	124,766		$	200,300		$	182,106		$	683,451			$	105,705		$	198,085		$	206,006		$	168,122		$	677,918
Acquisition-related amortization, pre-tax 1	34,062			34,101			35,325			35,027			138,515				35,635			34,997			34,244			33,460			138,336
Acquisition-related amortization, tax impact 2	(8,411)			(8,451)			(8,810)			(8,695)			(34,367)				(8,964)			(8,777)			(8,624)			(8,403)			(34,768)
Rightsizing and other costs, pre-tax 3	7,859			16,840			5,848			20,925			51,472				3,963			6,457			3,807			17,926			32,153
Rightsizing and other costs, tax impact 2	(1,605)			(3,452)			(1,343)			(4,402)			(10,802)				(861)			(1,377)			(806)			(3,745)			(6,789)
Loss on extinguishment of debt, pre-tax 4	—			—			—			—			—				—			—			—			23,543			23,543
Loss on extinguishment of debt, tax impact 2	—			—			—			—			—				—			—			—			(5,163)			(5,163)
Loss on assets held for sale 5	—			—			—			—			—				46,946			—			—			—			46,946
(Gain) loss on disposition, pre-tax 6	(6,551)			781			557			—			(5,213)				—			—			—			—			—
(Gain) loss on disposition, tax-impact 2	1,592			(190)			(135)			—			1,267				—			—			—			—			—
Adjusted net earnings	$	203,225		$	164,395		$	231,742		$	224,961		$	824,323			$	182,424		$	229,385		$	234,627		$	225,740		$	872,176
Adjusted diluted net earnings per share:
Diluted net earnings per share	$	1.21		$	0.86		$	1.38		$	1.25		$	4.70			$	0.72		$	1.35		$	1.40		$	1.15		$	4.61
Acquisition-related amortization, pre-tax 1	0.23			0.24			0.24			0.24			0.95				0.24			0.24			0.23			0.23			0.94
Acquisition-related amortization, tax impact 2	(0.06)			(0.06)			(0.06)			(0.06)			(0.24)				(0.06)			(0.06)			(0.06)			(0.06)			(0.24)
Rightsizing and other costs, pre-tax 3	0.05			0.12			0.04			0.14			0.35				0.03			0.04			0.03			0.12			0.22
Rightsizing and other costs, tax impact 2	(0.01)			(0.02)			(0.01)			(0.03)			(0.07)				(0.01)			(0.01)			(0.01)			(0.03)			(0.06)
Loss on extinguishment of debt, pre-tax 4	—			—			—			—			—				—			—			—			0.16			0.16
Loss on extinguishment of debt, tax impact 2	—			—			—			—			—				—			—			—			(0.04)			(0.04)
Loss on assets held for sale 5	—			—			—			—			—				0.32			—			—			—			0.32
(Gain) loss on disposition, pre-tax 6	(0.04)			—			—			—			(0.03)				—			—			—			—			—
(Gain) loss on disposition, tax-impact 2	0.01			—			—			—			0.01				—			—			—			—			—
Adjusted diluted net earnings per share	$	1.39		$	1.13		$	1.60		$	1.55		$	5.67			$	1.24		$	1.56		$	1.60		$	1.54		$	5.93
1 Includes amortization on acquisition-related intangible assets and inventory step-up.
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 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges.
4 Represents a loss on early extinguishment of €300,000 2.125% notes due 2020 and $450,000 4.30% notes due 2021.
5 Represents a loss on assets held for sale of Finder Pompe S.r.l. ("Finder"). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
6 Represents a (gain) loss on the disposition of AMS Chino within the Refrigeration & Food Equipment segment, including working capital adjustments.
* Per share data and totals may be impacted by rounding.

 

DOVER CORPORATION QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP) (unaudited)(in thousands)
Non-GAAP Reconciliations
	2020																2019
	Q1			Q2			Q3			Q4			FY 2020				Q1			Q2			Q3			Q4			FY 2019
ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA
Engineered Products:
Segment earnings (EBIT)	$	69,094		$	47,702		$	64,890		$	56,481		$	238,167			$	67,119		$	77,129		$	74,367		$	73,233		$	291,848
Rightsizing and other costs	361			4,169			2,375			4,625			11,530				80			1,125			590			1,355			3,150
Adjusted EBIT - Segment	69,455			51,871			67,265			61,106			249,697				67,199			78,254			74,957			74,588			294,998
Adjusted EBIT %	17.0 %			15.2 %			17.4 %			15.5 %			16.3 %				16.0 %			18.2 %			17.6 %			17.7 %			17.4 %
Adjusted D&A 2	10,122			9,722			10,651			10,193			40,688				10,359			9,855			10,095			10,126			40,435
Adjusted EBITDA - Segment	$	79,577		$	61,593		$	77,916		$	71,299		$	290,385			$	77,558		$	88,109		$	85,052		$	84,714		$	335,433
Adjusted EBITDA %	19.5 %			18.0 %			20.2 %			18.1 %			19.0 %				18.5 %			20.5 %			19.9 %			20.1 %			19.8 %
Fueling Solutions:
Segment earnings (EBIT)	$	53,498		$	47,214		$	66,601		$	69,661		$	236,974			$	37,230		$	52,637		$	68,069		$	73,937		$	231,873
Rightsizing and other costs	1,493			868			1,615			2,727			6,703				752			1,768			811			1,554			4,885
Adjusted EBIT - Segment	54,991			48,082			68,216			72,388			243,677				37,982			54,405			68,880			75,491			236,758
Adjusted EBIT %	15.3 %			14.7 %			17.9 %			17.7 %			16.5 %				10.2 %			13.9 %			16.7 %			17.0 %			14.6 %
Adjusted D&A 2	18,339			17,783			18,014			18,225			72,361				17,879			18,945			18,744			19,477			75,045
Adjusted EBITDA - Segment	$	73,330		$	65,865		$	86,230		$	90,613		$	316,038			$	55,861		$	73,350		$	87,624		$	94,968		$	311,803
Adjusted EBITDA %	20.4 %			20.2 %			22.7 %			22.1 %			21.4 %				15.0 %			18.8 %			21.3 %			21.4 %			19.2 %
Imaging & Identification:
Segment earnings (EBIT)	$	51,482		$	38,046		$	51,928		$	52,017		$	193,473			$	55,955		$	54,641		$	61,655		$	57,233		$	229,484
Rightsizing and other costs	264			(527)			99			6,191			6,027				389			1,268			301			4,392			6,350
Adjusted EBIT - Segment	51,746			37,519			52,027			58,208			199,500				56,344			55,909			61,956			61,625			235,834
Adjusted EBIT %	20.2 %			16.5 %			19.6 %			20.2 %			19.2 %				21.0 %			21.0 %			22.5 %			22.5 %			21.7 %
Adjusted D&A 2	8,769			9,224			9,809			10,201			38,003				7,336			7,317			7,286			7,892			29,831
Adjusted EBITDA - Segment	$	60,515		$	46,743		$	61,836		$	68,409		$	237,503			$	63,680		$	63,226		$	69,242		$	69,517		$	265,665
Adjusted EBITDA %	23.6 %			20.5 %			23.3 %			23.8 %			22.9 %				23.7 %			23.7 %			25.2 %			25.3 %			24.5 %
Pumps & Process Solutions:
Segment earnings (EBIT)	$	66,079		$	67,702		$	89,786		$	81,709		$	305,276			$	14,991		$	76,278		$	77,433		$	71,379		$	240,081
Rightsizing and other costs	3,846			4,691			1,771			3,128			13,436				414			903			943			3,868			6,128
Loss on assets held for sale 1	—			—			—			—			—				46,946			—			—			—			46,946
Adjusted EBIT - Segment	69,925			72,393			91,557			84,837			318,712				62,351			77,181			78,376			75,247			293,155
Adjusted EBIT %	21.9 %			23.4 %			26.3 %			24.4 %			24.1 %				18.9 %			22.8 %			23.0 %			22.9 %			21.9 %
Adjusted D&A 2	16,230			16,816			17,206			17,565			67,817				17,548			16,199			16,018			17,004			66,769
Adjusted EBITDA - Segment	$	86,155		$	89,209		$	108,763		$	102,402		$	386,529			$	79,899		$	93,380		$	94,394		$	92,251		$	359,924
Adjusted EBITDA %	27.0 %			28.9 %			31.3 %			29.5 %			29.2 %				24.2 %			27.6 %			27.7 %			28.1 %			26.9 %
Refrigeration & Food Equipment:
Segment earnings (EBIT)	$	23,529		$	11,459		$	40,159		$	27,725		$	102,872			$	24,807		$	44,375		$	35,211		$	14,439		$	118,832
Rightsizing and other costs	704			6,016			(971)			726			6,475				2,293			666			840			2,243			6,042
(Gain) loss on disposition 3	(6,551)			781			557			—			(5,213)				—			—			—			—			—
Adjusted EBIT - Segment	17,682			18,256			39,745			28,451			104,134				27,100			45,041			36,051			16,682			124,874
Adjusted EBIT %	5.7 %			6.2 %			10.8 %			8.3 %			7.9 %				8.1 %			11.7 %			9.7 %			5.4 %			8.9 %
Adjusted D&A 2	11,548			11,421			12,081			11,491			46,541				13,011			12,777			13,047			12,525			51,360
Adjusted EBITDA - Segment	$	29,230		$	29,677		$	51,826		$	39,942		$	150,675			$	40,111		$	57,818		$	49,098		$	29,207		$	176,234
Adjusted EBITDA %	9.4 %			10.1 %			14.1 %			11.7 %			11.4 %				12.0 %			15.0 %			13.3 %			9.5 %			12.6 %
Total Segments:
Segment earnings (EBIT) 4	$	263,682		$	212,123		$	313,364		$	287,593		$	1,076,762			$	200,102		$	305,060		$	316,735		$	290,221		$	1,112,118
Rightsizing and other costs	6,668			15,217			4,889			17,397			44,171				3,928			5,730			3,485			13,412			26,555
Loss on assets held for sale 1	—			—			—			—			—				46,946			—			—			—			46,946
(Gain) loss on disposition 3	(6,551)			781			557			—			(5,213)				—			—			—			—			—
Adjusted EBIT - Segment 5	263,799			228,121			318,810			304,990			1,115,720				250,976			310,790			320,220			303,633			1,185,619
Adjusted EBIT % 4	15.9 %			15.2 %			18.2 %			17.1 %			16.7 %				14.5 %			17.2 %			17.5 %			17.1 %			16.6 %
Adjusted D&A 2	65,008			64,966			67,761			67,675			265,410				66,133			65,093			65,190			67,024			263,440
Adjusted EBITDA - Segment 5	$	328,807		$	293,087		$	386,571		$	372,665		$	1,381,130			$	317,109		$	375,883		$	385,410		$	370,657		$	1,449,059
Adjusted EBITDA % 5	19.9 %			19.5 %			22.1 %			20.9 %			20.7 %				18.4 %			20.7 %			21.1 %			20.9 %			20.3 %
1 Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder.
2 Adjusted D&A is depreciation and amortization expense, excluding depreciation and amortization included within rightsizing and other costs.
3 Q1, Q2, Q3, and FY 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of a business for AMS Chino, respectively.
4 Refer to Quarterly Segment Information section for reconciliation of total segment earnings (EBIT) to net earnings.
5 Refer to Non-GAAP Disclosures section for definition.

 

DOVER CORPORATION REVENUE GROWTH FACTORS (NON-GAAP) (unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
Revenue Growth Factors
	2020
	Q1				Q2			Q3			Q4			Q4 YTD
Organic
Engineered Products	(1.9)	%			(20.1)	%		(10.4)	%		(8.8)	%		(10.3)	%
Fueling Solutions	(2.6)	%			(14.8)	%		(7.9)	%		(9.4)	%		(8.8)	%
Imaging & Identification	(4.3)	%			(14.0)	%		(7.6)	%		(2.9)	%		(7.2)	%
Pumps & Process Solutions	(1.1)	%			(8.8)	%		(0.9)	%		1.8	%		(2.3)	%
Refrigeration & Food Equipment	(4.3)	%			(20.2)	%		2.6	%		13.2	%		(3.0)	%
Total Organic	(2.7)	%			(16.0)	%		(5.1)	%		(2.3)	%		(6.6)	%
Acquisitions	0.8	%			0.7	%		1.0	%		1.2	%		1.0	%
Dispositions	(0.7)	%			(0.7)	%		(0.8)	%		(0.5)	%		(0.7)	%
Currency translation	(1.4)	%			(1.2)	%		0.7	%		1.9	%		—	%
Total*	(4.0)	%	—	%	(17.2)	%		(4.2)	%		0.3	%		(6.3)	%
* Totals may be impacted by rounding.

 

	2020
	Q1			Q2			Q3			Q4			Q4 YTD
Organic
United States	3.5	%		(10.3)	%		(4.2)	%		(1.0)	%		(3.1)	%
Other Americas	(4.7)	%		(33.5)	%		(4.7)	%		(1.4)	%		(12.1)	%
Europe	(7.4)	%		(19.5)	%		(4.2)	%		(2.5)	%		(8.5)	%
Asia	(19.2)	%		(14.3)	%		(10.1)	%		(11.4)	%		(13.5)	%
Other	(8.8)	%		(33.1)	%		(5.8)	%		10.9	%		(9.3)	%
Total Organic	(2.7)	%		(16.0)	%		(5.1)	%		(2.3)	%		(6.6)	%
Acquisitions	0.8	%		0.7	%		1.0	%		1.2	%		1.0	%
Dispositions	(0.7)	%		(0.7)	%		(0.8)	%		(0.5)	%		(0.7)	%
Currency translation	(1.4)	%		(1.2)	%		0.7	%		1.9	%		—	%
Total*	(4.0)	%		(17.2)	%		(4.2)	%		0.3	%		(6.3)	%
* Totals may be impacted by rounding.

 

Adjusted Guidance Reconciliation
	2020 Actual				2021 Guidance
Adjusted net earnings per share*:
Net earnings (GAAP)	$	4.70			$5.42 - $5.62
Acquisition-related amortization, net	0.72				0.72
Rightsizing and other costs, net	0.28				0.11
Gain on disposition, net	(0.03)				—
Adjusted net earnings (Non-GAAP)	$	5.67			$6.25 - $6.45
* Per share data and totals may be impacted by rounding.

 

DOVER CORPORATION PERFORMANCE MEASURES (unaudited)(in thousands)
	2020																2019
	Q1			Q2			Q3			Q4			FY 2020				Q1			Q2			Q3			Q4			FY 2019
BOOKINGS
Engineered Products	$	414,972		$	278,373		$	381,139		$	484,002		$	1,558,486			$	427,697		$	397,420		$	426,059		$	457,145		$	1,708,321
Fueling Solutions	373,070			311,498			383,902			403,400			1,471,870				343,083			394,256			450,727			425,698			1,613,764
Imaging & Identification	272,604			221,315			266,423			304,756			1,065,098				267,762			264,175			284,527			276,451			1,092,915
Pumps & Process Solutions	369,403			275,872			323,801			365,262			1,334,338				369,801			375,905			329,642			318,482			1,393,830
Refrigeration & Food Equipment	355,157			326,400			449,549			379,393			1,510,499				376,998			384,365			323,422			361,970			1,446,755
Intra-segment eliminations	(375)			(460)			(926)			(425)			(2,186)				(725)			(490)			(528)			872			(871)
Total consolidated bookings	$	1,784,831		$	1,412,998		$	1,803,888		$	1,936,388		$	6,938,105			$	1,784,616		$	1,815,631		$	1,813,849		$	1,840,618		$	7,254,714
BACKLOG
Engineered Products	$	453,867		$	378,874		$	373,458		$	463,701						$	451,335		$	418,154		$	416,025		$	452,142
Fueling Solutions	211,518			199,305			204,574			201,521							185,847			186,202			223,081			205,842
Imaging & Identification	170,119			168,904			171,158			192,785							118,177			116,810			121,877			125,775
Pumps & Process Solutions	397,969			379,090			361,631			390,238							353,066			378,427			361,478			353,073
Refrigeration & Food Equipment	356,133			390,368			472,140			510,498							311,632			310,454			262,870			320,577
Intra-segment eliminations	(159)			(367)			(269)			(192)							(403)			(141)			(252)			(249)
Total consolidated backlog	$	1,589,447		$	1,516,174		$	1,582,692		$	1,758,551						$	1,419,654		$	1,409,906		$	1,385,079		$	1,457,160

 

Bookings Growth Factors
	2020
	Q1			Q2			Q3			Q4			Q4 YTD
Organic
Engineered Products	(2.3)	%		(29.8)	%		(11.6)	%		3.3	%		(9.5)	%
Fueling Solutions	9.5	%		(18.2)	%		(14.2)	%		(6.0)	%		(8.0)	%
Imaging & Identification	0.3	%		(16.5)	%		(9.9)	%		0.7	%		(6.3)	%
Pumps & Process Solutions	2.2	%		(25.7)	%		(3.7)	%		10.8	%		(4.8)	%
Refrigeration & Food Equipment	(4.2)	%		(11.6)	%		41.3	%		5.6	%		6.5	%
Total Organic	0.9	%		(20.6)	%		(1.1)	%		2.4	%		(4.6)	%
Acquisitions	1.0	%		0.7	%		0.8	%		1.5	%		1.0	%
Dispositions	(0.7)	%		(0.6)	%		(0.6)	%		(0.4)	%		(0.6)	%
Currency translation	(1.2)	%		(1.7)	%		0.4	%		1.7	%		(0.2)	%
Total*	—	%		(22.2)	%		(0.5)	%		5.2	%		(4.4)	%
* Totals may be impacted by rounding.

 

ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2020
(Amounts in thousands except share data and where otherwise indicated)

Acquisitions

During the fourth quarter of 2020 the Company completed the acquisition of Innovative Control Systems, Inc. ("ICS") within the Fueling Solutions segment for a total consideration of $77.0 million, net of cash acquired. For the full year 2020, the Company acquired six businesses in separate transactions for total consideration of $335.8 million, net of cash acquired. The businesses were acquired to complement and expand upon existing operations within the Engineered Products, Fueling Solutions, Imaging & Identification and Pumps & Process Solutions segments.

Discontinued and Disposed Businesses

The Company did not dispose of any businesses during the fourth quarter of 2020. For the full year 2020, the Company completed the sale of the Chino, California branch of The AMS Group ("AMS Chino"), a wholly owned subsidiary of the Company, which generated total cash proceeds of $15.4 million. This sale resulted in a pre-tax gain on sale of $5.2 million included within the Refrigeration & Food Equipment segment. The sale does not represent a strategic shift that will have a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation.

Rightsizing and Other Costs

During the fourth quarter and year ended December 31, 2020, rightsizing activities included restructuring charges of $18.1 million and $44.5 million, respectively, and other costs of $2.8 million and $7.0 million, respectively. For the full year 2020, restructuring expense was comprised primarily of new actions executed in response to lower demand driven by COVID-19 as well as continuing broad-based selling, general and administrative expense reduction initiatives and broad-based operational efficiency initiatives focusing on footprint consolidation, and operational optimization and IT centralization. Other costs were comprised primarily of charges related to restructuring actions and asset charges, principally due to a $3.6 million write off of assets, partially offset by a $1.7 million gain on sale of assets in our Refrigeration & Food Equipment segment as a result of restructuring actions.

($ in millions)	2020								2019
	Q4				FY				Q4				FY
Engineered Products	$	4.6			$	11.5			$	1.4			$	3.2
Fueling Solutions	2.7				6.7				1.6				4.9
Imaging & Identification	6.2				6.0				4.4				6.4
Pumps & Process Solutions	3.1				13.4				3.9				6.1
Refrigeration & Food Equipment	0.7				6.5				2.2				6.0
Corporate	3.5				7.3				4.5				5.6
Total*	$	20.9			$	51.5			$	17.9			$	32.2
* Totals may be impacted by rounding.

Tax Rate

The effective tax rate was 17.4% and 14.7% for the fourth quarters of 2020 and 2019, respectively. On a full year basis, the effective tax rate for 2020 and 2019 was 18.8% and 19.6%, respectively. The 2020 tax rate was primarily driven by the release of reserves due to the statute of limitations expiration and the tax deduction for share-based awards. The 2019 tax rate was primarily driven by the tax deduction for share-based awards and other favorable discrete items, partially offset by the exclusion of capital losses on a disposition of a business under local tax law.

 

ADDITIONAL INFORMATION (CONTINUED)
FOURTH QUARTER AND FULL YEAR 2020
(Amounts in thousands except share data and where otherwise indicated)

Share Repurchases

During the year ended December 31, 2020, the Company purchased approximately 1.0 million shares of its common stock for a total cost of $106.3 million, or $108.54 per share. In November 2020, the Company's Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares beginning on January 1, 2021 through December 31, 2023.

Capitalization 

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

Net Debt to Net Capitalization Ratio (Non-GAAP)		December 31, 2020				December 31, 2019
Commercial paper		$	—			$	84,700
Long-term debt		3,108,829				2,985,716
Total debt		3,108,829				3,070,416
Less: Cash and cash equivalents		(513,075)				(397,253)
Net debt		2,595,754				2,673,163
Add: Stockholders' equity		3,385,773				3,032,660
Net capitalization		$	5,981,527			$	5,705,823
Net debt to net capitalization		43.4		%		46.8		%

 

Quarterly Cash Flow
	2020																2019
	Q1			Q2			Q3			Q4			FY 2020				Q1			Q2			Q3			Q4			FY 2019
Net Cash Flows Provided By (Used In):
Operating activities	$	75,863		$	271,809		$	339,247		$	417,891		$	1,104,810			$	24,524		$	208,709		$	350,865		$	361,208		$	945,306
Investing activities	(230,511)			(67,763)			(64,724)			(118,381)			(481,379)				(217,690)			(69,755)			(48,612)			(48,198)			(384,255)
Financing activities	280,954			(67,458)			(496,832)			(222,954)			(506,290)				36,067			(60,596)			(277,901)			(255,612)			(558,042)

 

Quarterly Free Cash Flow (Non-GAAP)
	2020																2019
	Q1			Q2			Q3			Q4			FY 2020				Q1			Q2			Q3			Q4			FY 2019
Cash flow from operating activities	$	75,863		$	271,809		$	339,247		$	417,891		$	1,104,810			$	24,524		$	208,709		$	350,865		$	361,208		$	945,306
Less: Capital expenditures	(40,172)			(38,999)			(44,393)			(42,128)			(165,692)				(37,122)			(53,970)			(46,184)			(49,528)			(186,804)
Free cash flow *	$	35,691		$	232,810		$	294,854		$	375,763		$	939,118			$	(12,598)		$	154,739		$	304,681		$	311,680		$	758,502
Free cash flow as a percentage of revenue	2.2		%	15.5		%	16.9		%	21.1		%	14.1		%		(0.7)		%	8.5		%	16.7		%	17.6		%	10.6		%
Free cash flow as a percentage of net earnings	20.2		%	186.6		%	147.2		%	206.3		%	137.4		%		(11.9)		%	78.1		%	147.9		%	185.4		%	111.9		%
*  FY 2020 cash flow from operating activities reflects benefits from permitted deferrals of tax payments, most significantly in Q2, Q3, and Q4 and advanced payments on contracts, most significantly in Q3.

 

Non-GAAP Disclosures

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 (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, net debt, net capitalization, net debt to net capitalization ratios, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of 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, debt or equity, 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 acquisition-related amortization, rightsizing and other costs, loss on extinguishment of debt, loss on assets held for sale and gain/loss on disposition. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. 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 represents adjusted net earnings divided by average diluted shares.

Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.

Adjusted EBIT by Segment is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain/loss on disposition. Adjusted EBIT Margin by Segment is defined as adjusted EBIT by segment divided by segment revenue.

Adjusted EBITDA by Segment is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs.  Adjusted EBITDA Margin by Segment is defined as adjusted EBITDA by segment divided by segment revenue.

Management believes these measures are useful to investors to better understand the Company's ongoing profitability as it 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.

Net debt represents total debt minus cash and cash equivalents. Net capitalization represents net debt plus stockholders' equity. Net debt to net capitalization ratio equals net debt divided by net capitalization. Management believes the net debt to net capitalization ratio is useful to assess our overall financial leverage and capacity. 

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 net earnings equals free cash flow divided by net earnings. Management believes that free cash flow and free cash flow ratios are important measures of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.

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

Performance Measures Definitions

Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.

Organic bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisition and dispositions. This metric is an important measure of performance and an indicator of revenue order trends. 

Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet have satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.

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

Investor Contact:		Media Contact:
Andrey Galiuk		Adrian Sakowicz
Vice President - Corporate Development		Vice President - Communications
and Investor Relations		(630) 743-5039
(630) 743-5131		asakowicz@dovercorp.com
agaliuk@dovercorp.com

 

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SOURCE Dover

FAQ

What were Dover's Q4 2020 revenue results?

Dover reported Q4 2020 revenue of $1.78 billion.

What did Dover's full year revenue decline in 2020?

Dover's full year 2020 revenue declined by 6% to $6.68 billion.

How much did Dover's GAAP net earnings increase in Q4 2020?

GAAP net earnings for Q4 2020 increased by 8% to $182 million.

What is Dover's projected GAAP EPS for 2021?

Dover projects a GAAP EPS of $5.42 to $5.62 for 2021.

What was the organic revenue change for Dover in Q4 2020?

Dover experienced a 2% organic revenue decline in Q4 2020.