Dover Reports Third Quarter 2021 Results; Raises Full Year Guidance

Rhea-AI Summary

Dover reported third quarter financial results ending September 30, 2021, with revenue of $2.0 billion, a 15% increase year-over-year. Net earnings rose 32% to $264 million, and diluted EPS increased 31% to $1.81. For the nine months, revenue reached $5.9 billion, a 21% increase. The company raised its full-year EPS guidance to a range of $6.64 to $6.69. Despite supply chain challenges impacting margins, strong demand and a record backlog position Dover favorably for future growth.

Positive

• Revenue increased by 15% to $2.0 billion in Q3 2021.
• Net earnings rose 32% to $264 million in Q3 2021.
• Diluted EPS increased by 31% to $1.81 in Q3 2021.
• Raised full-year EPS guidance to $6.64-$6.69.

Negative

• Supply chain challenges adversely impacted shipment timing and margins.

DOWNERS GROVE, Ill., Oct. 19, 2021 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2021.

		Three Months Ended September 30,											Nine Months Ended September 30,
($ in millions, except per share data)		2021				2020				% Change			2021				2020				% Change
U.S. GAAP
Revenue		$	2,018			$	1,748			15	%		$	5,918			$	4,903			21	%
Net earnings 1		264				200				32	%		761				501				52	%
Diluted EPS		1.81				1.38				31	%		5.24				3.45				52	%
Non-GAAP
Organic revenue change										13	%										17	%
Adjusted net earnings 2		288				232				24	%		850				599				42	%
Adjusted diluted EPS		1.98				1.60				24	%		5.86				4.12				42	%
1 Q3 2021 and 2020 net earnings include rightsizing and other (benefits) costs of $(2.3) million and $4.5 million, respectively. Q3 2020 also includes a $0.4 million expense related to the sale of AMS Chino. Year-to-date 2021 and 2020 net earnings include rightsizing and other costs of $9.0 million and $24.1 million, respectively. Year-to-date 2020 also includes a $3.9 million non-cash gain on the sale of AMS Chino.
2 Q3 2021 and 2020 adjusted net earnings exclude after tax acquisition-related amortization costs of $26.9 million and $26.5 million, respectively, and rightsizing and other (benefits) costs of $(2.3) million and $4.5 million, respectively. Q3 2020 also excludes a $0.4 million expense related to the sale of AMS Chino. Year-to-date 2021 and 2020 adjusted net earnings exclude acquisition-related amortization costs of $80.3 million and $77.8 million, respectively, and rightsizing and other costs of $9.0 million and $24.1 million, respectively. Year-to-date 2020 also excludes a $3.9 million non-cash gain on the sale of AMS Chino.

For the quarter ended September 30, 2021, Dover generated revenue of $2.0 billion, an increase of 15% (+13% organic) compared to the third quarter of the prior year. GAAP net earnings of $264 million increased 32%, and GAAP diluted EPS of $1.81 was up 31%. On an adjusted basis, net earnings of $288 million increased 24% and adjusted diluted EPS of $1.98 was also up 24% versus the comparable quarter of the prior year.

For the nine months ended September 30, 2021, Dover generated revenue of $5.9 billion, an increase of 21% (+17% organic) compared to the first nine months of the prior year. GAAP net earnings of $761 million increased 52%, and GAAP diluted EPS of $5.24 was also up 52% year-over-year. On an adjusted basis, net earnings of $850 million increased 42%, and adjusted diluted EPS of $5.86 was also up 42% versus the comparable period of the prior year.

A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.

MANAGEMENT COMMENTARY:

Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Our results in the third quarter reflect continued robust demand and solid execution by our teams in an increasingly complex supply chain and labor environment.

"During the quarter we demonstrated the strength of our portfolio with revenue and new order growth across all five of our operating segments. We improved margins year-over-year despite well-advertised supply chain, logistics, and labor availability challenges that adversely impacted shipment timing and margin performance in several businesses, most notably in our Refrigeration and Food Equipment and Engineered Products segments. Overall, our diversified end market exposures, ongoing productivity initiatives and time-tested localized manufacturing and sourcing strategy provide us an advantage as we execute against record backlogs and deliver critical products to our customers.

"We also continued to enhance and invest behind our portfolio. We progressed necessary capacity expansion in several high-growth businesses to meet their prevailing demand forecasts. Recently we completed three highly-complementary bolt-on acquisitions in radio signal intelligence solutions, industrial 3D visualization software and fueling solutions for alternative fuels like LNG and hydrogen. We also agreed to sell Unified Brands, Dover's commercial foodservice business, to enable greater focus on our core growth platforms. Our balance sheet is healthy and we remain disciplined in pursuit of opportunities to further enhance our portfolio.

"As we enter the final quarter of the year, we do not anticipate the challenges from the third quarter to abate and therefore we remain focused on operational execution to deliver against robust demand in this strained operational environment. More positively, our high backlog levels provide beneficial near-term visibility for the remainder of the year and into 2022. As a result, we are raising our full year EPS guidance."

FULL YEAR 2021 GUIDANCE UPDATE:

EPS guidance for full year 2021 was raised to $6.64 to $6.69 ($7.45 to $7.50 on an adjusted basis).

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its third quarter and year-to-date 2021 results as well as updated 2021 guidance at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, October 19, 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 third quarter results and its operating segments can be found on the Company's website.

ABOUT DOVER:

Dover is a diversified global manufacturer and solutions provider with annual revenue of over $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 65 years, our team of over 24,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.

FORWARD-LOOKING STATEMENTS:

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, other general economic conditions and conditions in the particular markets in which we operate, 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, 2020, 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 2021   DOVER CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)(in thousands, except per share data)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Revenue	$	2,018,269			$	1,748,256			$	5,917,846			$	4,903,370
Cost of goods and services	1,263,690				1,089,527				3,669,547				3,080,800
Gross profit	754,579				658,729				2,248,299				1,822,570
Selling, general, and administrative expenses	412,553				381,831				1,249,593				1,135,512
Operating earnings	342,026				276,898				998,706				687,058
Interest expense	26,433				27,724				79,917				83,703
Interest income	(1,466)				(960)				(3,088)				(2,871)
Loss (gain) on sale of a business	—				557				—				(5,213)
Other income, net	(10,460)				(1,420)				(18,236)				(9,887)
Earnings before provision for income taxes	327,519				250,997				940,113				621,326
Provision for income taxes	63,763				50,697				179,080				119,981
Net earnings	$	263,756			$	200,300			$	761,033			$	501,345
Net earnings per share:
Basic	$	1.83			$	1.39			$	5.29			$	3.48
Diluted	$	1.81			$	1.38			$	5.24			$	3.45
Weighted average shares outstanding:
Basic	143,976				144,032				143,895				144,082
Diluted	145,440				145,289				145,220				145,313
Dividends paid per common share	$	0.50			$	0.495			$	1.49			$	1.475
* Per share data may be impacted by rounding.

DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (unaudited)(in thousands)
	2021													2020
	Q1			Q2			Q3			Q3 YTD				Q1			Q2			Q3			Q3 YTD			Q4			FY 2020
REVENUE
Engineered Products	$	428,127		$	442,091		$	447,798		$	1,318,016			$	408,160		$	342,380		$	386,562		$	1,137,102		$	394,175		$	1,531,277
Fueling Solutions	389,678			437,042			410,561			1,237,281				359,982			326,495			380,511			1,066,988			409,294			1,476,282
Imaging & Identification	284,328			294,076			292,535			870,939				256,765			227,977			265,690			750,432			287,746			1,038,178
Pumps & Process Solutions	394,377			428,701			438,240			1,261,318				319,536			309,095			347,875			976,506			347,497			1,324,003
Refrigeration & Food Equipment	372,077			430,506			429,425			1,232,008				311,913			293,527			368,395			973,835			342,255			1,316,090
Intra-segment eliminations	(686)			(740)			(290)			(1,716)				(417)			(299)			(777)			(1,493)			(577)			(2,070)
Total consolidated revenue	$	1,867,901		$	2,031,676		$	2,018,269		$	5,917,846			$	1,655,939		$	1,499,175		$	1,748,256		$	4,903,370		$	1,780,390		$	6,683,760
NET EARNINGS
Segment Earnings:
Engineered Products 1	$	68,779		$	62,720		$	71,717		$	203,216			$	69,094		$	47,702		$	64,890		$	181,686		$	56,481		$	238,167
Fueling Solutions	66,480			78,755			65,593			210,828				53,498			47,214			66,601			167,313			69,661			236,974
Imaging & Identification	56,992			60,747			63,419			181,158				51,482			38,046			51,928			141,456			52,017			193,473
Pumps & Process Solutions	123,645			138,632			142,414			404,691				66,079			67,702			89,786			223,567			81,709			305,276
Refrigeration & Food Equipment 2	38,117			48,971			42,841			129,929				23,529			11,459			40,159			75,147			27,725			102,872
Total segment earnings (EBIT)	354,013			389,825			385,984			1,129,822				263,682			212,123			313,364			789,169			287,593			1,076,762
Corporate expense / other	38,620			40,762			33,498			112,880				24,097			27,311			35,603			87,011			39,651			126,662
Interest expense	26,823			26,661			26,433			79,917				27,268			28,711			27,724			83,703			28,234			111,937
Interest income	(680)			(942)			(1,466)			(3,088)				(1,183)			(728)			(960)			(2,871)			(700)			(3,571)
Earnings before provision for income taxes	289,250			323,344			327,519			940,113				213,500			156,829			250,997			621,326			220,408			841,734
Provision for income taxes	56,481			58,836			63,763			179,080				37,221			32,063			50,697			119,981			38,302			158,283
Net earnings	$	232,769		$	264,508		$	263,756		$	761,033			$	176,279		$	124,766		$	200,300		$	501,345		$	182,106		$	683,451
SEGMENT MARGIN
Engineered Products 1	16.1 %			14.2 %			16.0 %			15.4 %				16.9 %			13.9 %			16.8 %			16.0 %			14.3 %			15.6 %
Fueling Solutions	17.1 %			18.0 %			16.0 %			17.0 %				14.9 %			14.5 %			17.5 %			15.7 %			17.0 %			16.1 %
Imaging & Identification	20.0 %			20.7 %			21.7 %			20.8 %				20.1 %			16.7 %			19.5 %			18.8 %			18.1 %			18.6 %
Pumps & Process Solutions	31.4 %			32.3 %			32.5 %			32.1 %				20.7 %			21.9 %			25.8 %			22.9 %			23.5 %			23.1 %
Refrigeration & Food Equipment 2	10.2 %			11.4 %			10.0 %			10.5 %				7.5 %			3.9 %			10.9 %			7.7 %			8.1 %			7.8 %
Total segment operating margin	19.0 %			19.2 %			19.1 %			19.1 %				15.9 %			14.1 %			17.9 %			16.1 %			16.2 %			16.1 %
DEPRECIATION AND AMORTIZATION EXPENSE
Engineered Products	$	14,047		$	11,981		$	11,123		$	37,151			$	10,122		$	9,722		$	10,717		$	30,561		$	12,042		$	42,603
Fueling Solutions	19,269			19,475			19,920			58,664				18,339			17,968			18,014			54,321			18,482			72,803
Imaging & Identification	9,593			9,294			9,821			28,708				8,769			9,224			9,809			27,802			10,576			38,378
Pumps & Process Solutions	16,926			16,866			17,843			51,635				18,336			17,572			17,206			53,114			19,077			72,191
Refrigeration & Food Equipment	12,096			12,077			12,392			36,565				11,548			11,421			12,081			35,050			11,491			46,541
Corporate	1,875			1,826			1,812			5,513				1,638			1,696			1,662			4,996			1,539			6,535
Total depreciation and amortization expense	$	73,806		$	71,519		$	72,911		$	218,236			$	68,752		$	67,603		$	69,489		$	205,844		$	73,207		$	279,051
1 Q3 2021 includes a $9,078 payment received for previously incurred restructuring costs related to a product line exit.
2 Q1, Q2, Q3,  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, Q3 YTD and FY 2020 also include a $3,640 write-off of assets.

DOVER CORPORATION QUARTERLY EARNINGS PER SHARE (unaudited)(in thousands, except per share data*)
Earnings Per Share
	2021													2020
	Q1			Q2			Q3			Q3 YTD				Q1			Q2			Q3			Q3 YTD			Q4			FY 2020
Net earnings per share:
Basic	$	1.62		$	1.84		$	1.83		$	5.29			$	1.22		$	0.87		$	1.39		$	3.48		$	1.27		$	4.74
Diluted	$	1.61		$	1.82		$	1.81		$	5.24			$	1.21		$	0.86		$	1.38		$	3.45		$	1.25		$	4.70
Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings	$	232,769		$	264,508		$	263,756		$	761,033			$	176,279		$	124,766		$	200,300		$	501,345		$	182,106		$	683,451
Weighted average shares outstanding:
Basic	143,765			143,941			143,976			143,895				144,259			143,955			144,032			144,082			143,954			144,050
Diluted	144,938			145,118			145,440			145,220				145,782			144,995			145,289			145,313			145,355			145,393
* 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
	2021													2020
	Q1			Q2			Q3			Q3 YTD				Q1			Q2			Q3			Q3 YTD			Q4			FY 2020
Adjusted net earnings:
Net earnings	$	232,769		$	264,508		$	263,756		$	761,033			$	176,279		$	124,766		$	200,300		$	501,345		$	182,106		$	683,451
Acquisition-related amortization, pre-tax 1	35,516			35,162			35,587			106,265				34,062			34,101			35,325			103,488			35,027			138,515
Acquisition-related amortization, tax impact 2	(8,720)			(8,571)			(8,700)			(25,991)				(8,411)			(8,451)			(8,810)			(25,672)			(8,695)			(34,367)
Rightsizing and other costs (benefits), pre-tax 3	4,162			10,779			(3,201)			11,740				7,859			16,840			5,848			30,547			20,925			51,472
Rightsizing and other costs (benefits), tax impact 2	(1,031)			(2,597)			902			(2,726)				(1,605)			(3,452)			(1,343)			(6,400)			(4,402)			(10,802)
(Gain) loss on disposition, pre-tax 4	—			—			—			—				(6,551)			781			557			(5,213)			—			(5,213)
(Gain) loss on disposition, tax-impact 2	—			—			—			—				1,592			(190)			(135)			1,267			—			1,267
Adjusted net earnings	$	262,696		$	299,281		$	288,344		$	850,321			$	203,225		$	164,395		$	231,742		$	599,362		$	224,961		$	824,323
Adjusted diluted net earnings per share:
Diluted net earnings per share	$	1.61		$	1.82		$	1.81		$	5.24			$	1.21		$	0.86		$	1.38		$	3.45		$	1.25		$	4.70
Acquisition-related amortization, pre-tax 1	0.25			0.24			0.24			0.73				0.23			0.24			0.24			0.71			0.24			0.95
Acquisition-related amortization, tax impact 2	(0.06)			(0.06)			(0.06)			(0.18)				(0.06)			(0.06)			(0.06)			(0.18)			(0.06)			(0.24)
Rightsizing and other costs (benefits), pre-tax 3	0.03			0.07			(0.02)			0.08				0.05			0.12			0.04			0.21			0.14			0.35
Rightsizing and other costs (benefits), tax impact 2	(0.01)			(0.02)			0.01			(0.02)				(0.01)			(0.02)			(0.01)			(0.04)			(0.03)			(0.07)
(Gain) loss on disposition, pre-tax 4	—			—			—			—				(0.04)			—			—			(0.04)			—			(0.03)
(Gain) loss on disposition, tax-impact 2	—			—			—			—				0.01			—			—			0.01			—			0.01
Adjusted diluted net earnings per share	$	1.81		$	2.06		$	1.98		$	5.86			$	1.39		$	1.13		$	1.60		$	4.12		$	1.55		$	5.67
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 (benefits) include actions taken on employee reductions, facility consolidations and site closures, product line exits, and other asset charges. Q3 2021 includes a $9,078 payment received for previously incurred restructuring costs related to a product line exit in our Engineered Products segment.
4 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
	2021													2020
	Q1			Q2			Q3			Q3 YTD				Q1			Q2			Q3			Q3 YTD			Q4			FY 2020
ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA
Engineered Products:
Segment earnings (EBIT)	$	68,779		$	62,720		$	71,717		$	203,216			$	69,094		$	47,702		$	64,890		$	181,686		$	56,481		$	238,167
Rightsizing and other costs (benefits) 1	4,019			4,654			(8,332)			341				361			4,169			2,375			6,905			4,625			11,530
Adjusted EBIT - Segment	72,798			67,374			63,385			203,557				69,455			51,871			67,265			188,591			61,106			249,697
Adjusted EBIT %	17.0 %			15.2 %			14.2 %			15.4 %				17.0 %			15.2 %			17.4 %			16.6 %			15.5 %			16.3 %
Adjusted D&A 2	10,594			9,695			11,123			31,412				10,122			9,722			10,651			30,495			10,193			40,688
Adjusted EBITDA - Segment	$	83,392		$	77,069		$	74,508		$	234,969			$	79,577		$	61,593		$	77,916		$	219,086		$	71,299		$	290,385
Adjusted EBITDA %	19.5 %			17.4 %			16.6 %			17.8 %				19.5 %			18.0 %			20.2 %			19.3 %			18.1 %			19.0 %
Fueling Solutions:
Segment earnings (EBIT)	$	66,480		$	78,755		$	65,593		$	210,828			$	53,498		$	47,214		$	66,601		$	167,313		$	69,661		$	236,974
Rightsizing and other costs	58			1,657			1,584			3,299				1,493			868			1,615			3,976			2,727			6,703
Adjusted EBIT - Segment	66,538			80,412			67,177			214,127				54,991			48,082			68,216			171,289			72,388			243,677
Adjusted EBIT %	17.1 %			18.4 %			16.4 %			17.3 %				15.3 %			14.7 %			17.9 %			16.1 %			17.7 %			16.5 %
Adjusted D&A 2	19,180			19,475			19,335			57,990				18,339			17,783			18,014			54,136			18,225			72,361
Adjusted EBITDA - Segment	$	85,718		$	99,887		$	86,512		$	272,117			$	73,330		$	65,865		$	86,230		$	225,425		$	90,613		$	316,038
Adjusted EBITDA %	22.0 %			22.9 %			21.1 %			22.0 %				20.4 %			20.2 %			22.7 %			21.1 %			22.1 %			21.4 %
Imaging & Identification:
Segment earnings (EBIT)	$	56,992		$	60,747		$	63,419		$	181,158			$	51,482		$	38,046		$	51,928		$	141,456		$	52,017		$	193,473
Rightsizing and other costs (benefits)	682			178			1,291			2,151				264			(527)			99			(164)			6,191			6,027
Adjusted EBIT - Segment	57,674			60,925			64,710			183,309				51,746			37,519			52,027			141,292			58,208			199,500
Adjusted EBIT %	20.3 %			20.7 %			22.1 %			21.0 %				20.2 %			16.5 %			19.6 %			18.8 %			20.2 %			19.2 %
Adjusted D&A 2	9,218			9,184			9,821			28,223				8,769			9,224			9,809			27,802			10,201			38,003
Adjusted EBITDA - Segment	$	66,892		$	70,109		$	74,531		$	211,532			$	60,515		$	46,743		$	61,836		$	169,094		$	68,409		$	237,503
Adjusted EBITDA %	23.5 %			23.8 %			25.5 %			24.3 %				23.6 %			20.5 %			23.3 %			22.5 %			23.8 %			22.9 %
Pumps & Process Solutions:
Segment earnings (EBIT)	$	123,645		$	138,632		$	142,414		$	404,691			$	66,079		$	67,702		$	89,786		$	223,567		$	81,709		$	305,276
Rightsizing and other (benefits) costs	(2,006)			899			487			(620)				3,846			4,691			1,771			10,308			3,128			13,436
Adjusted EBIT - Segment	121,639			139,531			142,901			404,071				69,925			72,393			91,557			233,875			84,837			318,712
Adjusted EBIT %	30.8 %			32.5 %			32.6 %			32.0 %				21.9 %			23.4 %			26.3 %			24.0 %			24.4 %			24.1 %
Adjusted D&A 2	16,926			16,866			17,206			50,998				16,230			16,816			17,206			50,252			17,565			67,817
Adjusted EBITDA - Segment	$	138,565		$	156,397		$	160,107		$	455,069			$	86,155		$	89,209		$	108,763		$	284,127		$	102,402		$	386,529
Adjusted EBITDA %	35.1 %			36.5 %			36.5 %			36.1 %				27.0 %			28.9 %			31.3 %			29.1 %			29.5 %			29.2 %
Refrigeration & Food Equipment:
Segment earnings (EBIT)	$	38,117		$	48,971		$	42,841		$	129,929			$	23,529		$	11,459		$	40,159		$	75,147		$	27,725		$	102,872
Rightsizing and other (benefits) costs	(38)			2,539			1,520			4,021				704			6,016			(971)			5,749			726			6,475
(Gain) loss on disposition 3	—			—			—			—				(6,551)			781			557			(5,213)			—			(5,213)
Adjusted EBIT - Segment	38,079			51,510			44,361			133,950				17,682			18,256			39,745			75,683			28,451			104,134
Adjusted EBIT %	10.2 %			12.0 %			10.3 %			10.9 %				5.7 %			6.2 %			10.8 %			7.8 %			8.3 %			7.9 %
Adjusted D&A 2	11,745			12,077			12,392			36,214				11,548			11,421			12,081			35,050			11,491			46,541
Adjusted EBITDA - Segment	$	49,824		$	63,587		$	56,753		$	170,164			$	29,230		$	29,677		$	51,826		$	110,733		$	39,942		$	150,675
Adjusted EBITDA %	13.4 %			14.8 %			13.2 %			13.8 %				9.4 %			10.1 %			14.1 %			11.4 %			11.7 %			11.4 %
Total Segments:
Segment earnings (EBIT) 4	$	354,013		$	389,825		$	385,984		$	1,129,822			$	263,682		$	212,123		$	313,364		$	789,169		$	287,593		$	1,076,762
Rightsizing and other costs (benefits) 1	2,715			9,927			(3,450)			9,192				6,668			15,217			4,889			26,774			17,397			44,171
(Gain) loss on disposition 3	—			—			—			—				(6,551)			781			557			(5,213)			—			(5,213)
Adjusted EBIT - Segment 5	356,728			399,752			382,534			1,139,014				263,799			228,121			318,810			810,730			304,990			1,115,720
Adjusted EBIT % 5	19.1 %			19.7 %			19.0 %			19.2 %				15.9 %			15.2 %			18.2 %			16.5 %			17.1 %			16.7 %
Adjusted D&A 2	67,663			67,297			69,877			204,837				65,008			64,966			67,761			197,735			67,675			265,410
Adjusted EBITDA - Segment 5	$	424,391		$	467,049		$	452,411		$	1,343,851			$	328,807		$	293,087		$	386,571		$	1,008,465		$	372,665		$	1,381,130
Adjusted EBITDA % 5	22.7 %			23.0 %			22.4 %			22.7 %				19.9 %			19.5 %			22.1 %			20.6 %			20.9 %			20.7 %
1  Q3 2021 includes a $9,078 payment received for previously incurred restructuring costs related to a product line exit.
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
	2021
	Q3			Q3 YTD
Organic
Engineered Products	14.2	%		13.3	%
Fueling Solutions	3.0	%		9.7	%
Imaging & Identification	7.4	%		10.0	%
Pumps & Process Solutions	24.6	%		25.4	%
Refrigeration & Food Equipment	16.0	%		25.1	%
Total Organic	13.2	%		16.8	%
Acquisitions	1.1	%		1.2	%
Dispositions	—	%		(0.1)	%
Currency translation	1.1	%		2.8	%
Total*	15.4	%		20.7	%
* Totals may be impacted by rounding.

	2021
	Q3			Q3 YTD
Organic
United States	15.7	%		15.6	%
Other Americas	8.7	%		18.9	%
Europe	15.5	%		18.9	%
Asia	4.6	%		19.4	%
Other	0.1	%		10.9	%
Total Organic	13.2	%		16.8	%
Acquisitions	1.1	%		1.2	%
Dispositions	—	%		(0.1)	%
Currency translation	1.1	%		2.8	%
Total*	15.4	%		20.7	%
* Totals may be impacted by rounding.

Adjusted EPS Guidance Reconciliation
	Range
2021 Guidance for Earnings per Share (GAAP)	$	6.64			$	6.69
Acquisition-related amortization, net				0.74
Rightsizing and other costs, net				0.07
2021 Guidance for Adjusted Earnings per Share (Non-GAAP)	$	7.45			$	7.50
Note: The above guidance reflects on going results of Unified Brands business within the Refrigeration & Food Equipment segment and, therefore, excludes the impact of the pending sale which is expected to close in Q4 2021.

DOVER CORPORATION QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP) (unaudited)(in thousands)
Quarterly Cash Flow
	2021													2020
	Q1			Q2			Q3			Q3 YTD				Q1			Q2			Q3			Q3 YTD			Q4			FY 2020
Net Cash Flows Provided By (Used In):
Operating activities	$	177,184		$	260,073		$	351,329		$	788,586			$	75,863		$	271,809		$	339,247		$	686,919		$	417,891		$	1,104,810
Investing activities	(29,572)			(121,631)			(135,439)			(286,642)				(230,511)			(67,763)			(64,724)			(362,998)			(118,381)			(481,379)
Financing activities	(124,239)			(75,949)			(74,610)			(274,798)				280,954			(67,458)			(496,832)			(283,336)			(222,954)			(506,290)

Quarterly Free Cash Flow (Non-GAAP)
	2021													2020
	Q1			Q2			Q3			Q3 YTD				Q1			Q2			Q3			Q3 YTD			Q4			FY 2020
Cash flow from operating activities1	$	177,184		$	260,073		$	351,329		$	788,586			$	75,863		$	271,809		$	339,247		$	686,919		$	417,891		$	1,104,810
Less: Capital expenditures	(31,260)			(41,971)			(47,926)			(121,157)				(40,172)			(38,999)			(44,393)			(123,564)			(42,128)			(165,692)
Free cash flow	$	145,924		$	218,102		$	303,403		$	667,429			$	35,691		$	232,810		$	294,854		$	563,355		$	375,763		$	939,118
Free cash flow as a percentage of revenue	7.8 %			10.7 %			15.0 %			11.3 %				2.2 %			15.5 %			16.9 %			11.5 %			21.1 %			14.1 %
Free cash flow as a percentage of net earnings	62.7 %			82.5 %			115.0 %			87.7 %				20.2 %			186.6 %			147.2 %			112.4 %			206.3 %			137.4 %
1 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.

DOVER CORPORATION PERFORMANCE MEASURES (unaudited)(in thousands)
	2021													2020
	Q1			Q2			Q3			Q3 YTD				Q1			Q2			Q3			Q3 YTD			Q4			FY 2020
BOOKINGS
Engineered Products	$	528,310		$	497,200		$	502,767		$	1,528,277			$	414,972		$	278,373		$	381,139		$	1,074,484		$	484,002		$	1,558,486
Fueling Solutions	422,668			453,146			467,821			1,343,635				373,070			311,498			383,902			1,068,470			403,400			1,471,870
Imaging & Identification	293,614			299,608			293,782			887,004				272,604			221,315			266,423			760,342			304,756			1,065,098
Pumps & Process Solutions	551,365			521,010			490,581			1,562,956				369,403			275,872			323,801			969,076			365,262			1,334,338
Refrigeration & Food Equipment	537,326			606,545			540,280			1,684,151				355,157			326,400			449,549			1,131,106			379,393			1,510,499
Intra-segment eliminations	(863)			(498)			(407)			(1,768)				(375)			(460)			(926)			(1,761)			(425)			(2,186)
Total consolidated bookings	$	2,332,420		$	2,377,011		$	2,294,824		$	7,004,255			$	1,784,831		$	1,412,998		$	1,803,888		$	5,001,717		$	1,936,388		$	6,938,105
BACKLOG
Engineered Products	$	562,557		$	613,517		$	662,834						$	453,867		$	378,874		$	373,458					$	463,701
Fueling Solutions	238,822			256,497			312,176							211,518			199,305			204,574						201,521
Imaging & Identification	198,556			206,125			204,766							170,119			168,904			171,158						192,785
Pumps & Process Solutions	539,097			634,477			682,415							397,969			379,090			361,631						390,238
Refrigeration & Food Equipment	677,309			854,188			964,233							356,133			390,368			472,140						510,498
Intra-segment eliminations	(544)			(262)			(252)							(159)			(367)			(269)						(192)
Total consolidated backlog	$	2,215,797		$	2,564,542		$	2,826,172						$	1,589,447		$	1,516,174		$	1,582,692					$	1,758,551

Bookings Growth Factors
	2021
	Q3			Q3 YTD
Organic
Engineered Products	30.3	%		39.4	%
Fueling Solutions	15.8	%		18.0	%
Imaging & Identification	7.5	%		10.4	%
Pumps & Process Solutions	50.1	%		56.5	%
Refrigeration & Food Equipment	19.7	%		47.8	%
Total Organic	24.8	%		35.6	%
Acquisitions	1.1	%		1.6	%
Dispositions	—	%		(0.1)	%
Currency translation	1.3	%		2.9	%
Total*	27.2	%		40.0	%
* 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 (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of 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 acquisition-related amortization, rightsizing and other costs/benefits, and a 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/benefits, 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/benefits. 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.

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 Contacts:	Media Contact:
Andrey Galiuk	Adrian Sakowicz
Vice President - Corporate Development and Investor Relations	Vice President - Communications
(630) 743-5131	(630) 743-5039
agaliuk@dovercorp.com	asakowicz@dovercorp.com
Jack Dickens
Director - Corporate Development and Investor Relations
(630) 743-2566
jdickens@dovercorp.com

 

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SOURCE Dover

FAQ

What were Dover's Q3 2021 financial results?

Dover reported $2.0 billion in revenue, $264 million in net earnings, and diluted EPS of $1.81 for Q3 2021.

How much did Dover raise its EPS guidance for 2021?

Dover raised its full-year EPS guidance to a range of $6.64 to $6.69.

What was the revenue growth for Dover in Q3 2021?

Dover experienced a 15% revenue growth in Q3 2021 compared to the same quarter last year.

What challenges did Dover face in Q3 2021?

Dover faced supply chain challenges that impacted shipment timing and margin performance.

What were the key earnings figures for Dover in the nine months ended September 30, 2021?

For the nine months ended September 30, 2021, Dover generated $5.9 billion in revenue, with net earnings of $761 million.