Dover Reports Second Quarter 2023 Results

By
Technology For You
-

DOWNERS GROVE, Ill., July 25, 2023 /PRNewswire/ — Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the second quarter ended June 30, 2023. All comparisons are to the comparable period of the prior fiscal year, unless otherwise noted.

Three Months Ended June 30,

Six Months Ended June 30,

($ in millions, except per share data)

2023

2022

% Change

2023

2022

% Change

U.S. GAAP

Revenue

$       2,100

$       2,159

(3) %

$       4,179

$       4,211

(1) %

Net earnings 

242

290

(16) %

471

516

(9) %

Diluted EPS 

1.72

2.00

(14) %

3.35

3.56

(6) %













Non-GAAP

Organic revenue change




(3) %




— %

Adjusted net earnings 1

288

309

(7) %

561

585

(4) %

Adjusted diluted EPS

2.05

2.14

(4) %

3.99

4.03

(1) %

1 Q2 and year-to-date 2023 and 2022 adjusted net earnings exclude after tax purchase accounting expenses and restructuring and other costs. Q2 and year-to-date 2022 also exclude a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act.

For the quarter ended June 30, 2023, Dover generated revenue of $2.1 billion, a decrease of 3% (-3% organic). GAAP net earnings of $242 million decreased 16%, and GAAP diluted EPS of $1.72 was down 14%. On an adjusted basis, net earnings of $288 million decreased 7% and adjusted diluted EPS of $2.05 was down 4%.

For the six months ended June 30, 2023, Dover generated revenue of $4.2 billion, a decrease of 1% (flat organic). GAAP net earnings of $471 million decreased 9%, and GAAP diluted EPS of $3.35 was down 6%. On an adjusted basis, net earnings of $561 million decreased 4%, and adjusted diluted EPS of $3.99 was down 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 second quarter results met our expectations. Since the start of the year, we expected 2023 performance to be weighted to the second half due to post-pandemic destocking across the industrial economy and the gradual recovery in several of our end markets.

“In the second quarter, outperformance in our high-growth businesses was offset by transient manufacturing and shipment disruptions in our vehicle services group caused by an ERP system upgrade. This reduced our top line and EPS by approximately $50 million and $0.10, respectively, and is now largely behind us, with output recovering meaningfully in June.

“Order activity in our shorter-cycle end markets remained solid amid normalizing lead times, and our long-cycle and secular-growth-exposed businesses maintained strong shipment levels. As a result, our order backlog continued to normalize but remains elevated.

“We had forecasted softer comparable margins in the first half of 2023 primarily due to business mix and lower volumes in biopharma and EMV payment systems. We prepared for this by proactively intervening on our cost structure starting in the latter half of 2022, and have continued these structural cost reductions in 2023. We expect the roll forward of these actions, demand seasonality and backlog shipment timing to drive sequential and comparable operating margin improvement in the second half.

“Our strong balance sheet position and robust cash flow through the end of the year provide flexibility in our capital allocation initiatives. We are well on track with our organic growth initiatives and capacity build outs in clean energy, CO2 systems, and heat exchangers which are already driving growth in 2023. We remain active and disciplined in pursuing attractive bolt-on acquisitions while opportunistically evaluating capital return strategies.

“We have a constructive outlook for the remainder of the year and see a solid foundation building for 2024. Underlying demand remains good across the portfolio, and a significant volume of business is already in the backlog. Our flexible business model and execution playbook are proven to deliver results in various operating conditions.”

FULL YEAR 2023 GUIDANCE:

In 2023, Dover expects to generate GAAP EPS in the range of $7.68 to $7.83 (adjusted EPS of $8.85 to $9.00), based on full year revenue growth of 2% to 4% (all-in and organic).

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its second quarter and year-to-date results at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, July 25, 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 – SECOND QUARTER 2023

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

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


Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Revenue

$             2,100,086

$             2,158,715

$          4,179,109

$          4,210,616

Cost of goods and services

1,341,250

1,377,432

2,673,254

2,686,139

Gross profit

758,836

781,283

1,505,855

1,524,477

Selling, general and administrative expenses

434,340

424,433

866,754

868,276

Operating earnings

324,496

356,850

639,101

656,201

Interest expense

33,804

26,989

68,018

53,541

Interest income

(2,653)

(949)

(4,744)

(1,724)

Other income, net

(6,678)

(4,546)

(10,486)

(6,675)

Earnings before provision for income taxes

300,023

335,356

586,313

611,059

Provision for income taxes

57,784

45,738

115,500

95,288

Net earnings

$                 242,239

$                289,618

$             470,813

$             515,771








Net earnings per share:






Basic

$                       1.73

$                       2.01

$                    3.37

$                    3.58

Diluted

$                       1.72

$                       2.00

$                    3.35

$                    3.56

Weighted average shares outstanding:






Basic

139,862

143,832

139,810

143,959

Diluted

140,578

144,669

140,597

144,998








Dividends paid per common share

$                     0.505

$                       0.50

$                    1.01

$                    1.00








* Per share data may be impacted by rounding.






DOVER CORPORATION

QUARTERLY SEGMENT INFORMATION

(unaudited)(in thousands)


2023

2022

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

REVENUE









Engineered Products

$   497,549

$   473,687

$  971,236

$   487,647

$  514,436

$  1,002,083

$  516,501

$  525,048

$  2,043,632

Clean Energy & Fueling

430,729

441,166

871,895

458,395

494,075

952,470

464,022

462,015

1,878,507

Imaging & Identification

283,091

271,932

555,023

272,255

275,951

548,206

282,371

293,238

1,123,815

Pumps & Process Solutions

413,881

465,626

879,507

435,195

441,127

876,322

433,558

418,355

1,728,235

Climate & Sustainability Technologies

455,325

449,001

904,326

399,078

434,164

833,242

462,671

441,811

1,737,724

Intersegment eliminations

(1,552)

(1,326)

(2,878)

(669)

(1,038)

(1,707)

(832)

(1,286)

(3,825)

Total consolidated revenue

$ 2,079,023

$  2,100,086

$  4,179,109

$  2,051,901

$  2,158,715

$  4,210,616

$  2,158,291

$  2,139,181

$  8,508,088











NET EARNINGS









Segment Earnings:









Engineered Products

$     84,275

$     73,076

$  157,351

$     71,130

$    81,671

$  152,801

$    90,145

$  103,573

$  346,519

Clean Energy & Fueling

73,605

83,616

157,221

72,962

99,034

171,996

90,208

90,789

352,993

Imaging & Identification

68,315

61,336

129,651

58,598

61,392

119,990

74,477

73,617

268,084

Pumps & Process Solutions

115,244

129,337

244,581

146,617

138,048

284,665

128,573

119,780

533,018

Climate & Sustainability Technologies

73,778

76,074

149,852

53,609

64,181

117,790

75,190

61,504

254,484

Total segment earnings

415,217

423,439

838,656

402,916

444,326

847,242

458,593

449,263

1,755,098

Purchase accounting

expenses 1

42,679

40,200

82,879

53,286

47,019

100,305

40,526

40,272

181,103

Restructuring and other costs 2

14,053

18,143

32,196

10,552

7,944

18,496

8,613

11,881

38,990

Loss on dispositions 3

—

—

—

194

—

194

—

—

194

Corporate expense / other 4,5

40,072

33,922

73,994

37,404

27,967

65,371

27,876

42,033

135,280

Interest expense

34,214

33,804

68,018

26,552

26,989

53,541

29,789

33,126

116,456

Interest income

(2,091)

(2,653)

(4,744)

(775)

(949)

(1,724)

(1,244)

(1,462)

(4,430)

Earnings before provision for income taxes

286,290

300,023

586,313

275,703

335,356

611,059

353,033

323,413

1,287,505

Provision for income taxes

57,716

57,784

115,500

49,550

45,738

95,288

67,007

59,834

222,129

Net earnings

$   228,574

$   242,239

$  470,813

$   226,153

$  289,618

$  515,771

$  286,026

$  263,579

$  1,065,376











SEGMENT EARNINGS MARGIN







Engineered Products

16.9 %

15.4 %

16.2 %

14.6 %

15.9 %

15.2 %

17.5 %

19.7 %

17.0 %

Clean Energy & Fueling

17.1 %

19.0 %

18.0 %

15.9 %

20.0 %

18.1 %

19.4 %

19.7 %

18.8 %

Imaging & Identification

24.1 %

22.6 %

23.4 %

21.5 %

22.2 %

21.9 %

26.4 %

25.1 %

23.9 %

Pumps & Process Solutions

27.8 %

27.8 %

27.8 %

33.7 %

31.3 %

32.5 %

29.7 %

28.6 %

30.8 %

Climate & Sustainability Technologies

16.2 %

16.9 %

16.6 %

13.4 %

14.8 %

14.1 %

16.3 %

13.9 %

14.6 %

Total segment earnings margin

20.0 %

20.2 %

20.1 %

19.6 %

20.6 %

20.1 %

21.2 %

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

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

Net earnings per share:









Basic

$      1.64

$      1.73

$      3.37

$      1.57

$      2.01

$      3.58

$      2.01

$      1.88

$          7.47

Diluted

$      1.63

$      1.72

$      3.35

$      1.56

$      2.00

$      3.56

$      2.00

$      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

$  470,813

$  226,153

$  289,618

$  515,771

$  286,026

$  263,579

$ 1,065,376











Weighted average shares outstanding:






Basic

139,757

139,862

139,810

144,087

143,832

143,959

142,506

140,343

142,681

Diluted

140,616

140,578

140,597

145,329

144,669

144,998

143,257

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

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

Adjusted net earnings:









Net earnings

$  228,574

$  242,239

$  470,813

$  226,153

$  289,618

$  515,771

$  286,026

$  263,579

$   1,065,376

Purchase accounting expenses, pre-tax 1

42,679

40,200

82,879

53,286

47,019

100,305

40,526

40,272

181,103

Purchase accounting expenses, tax impact 2

(9,599)

(9,012)

(18,611)

(12,538)

(11,013)

(23,551)

(9,494)

(8,689)

(41,734)

Restructuring and other costs, pre-tax 3

14,053

18,143

32,196

10,552

7,944

18,496

8,613

11,881

38,990

Restructuring and other costs, tax impact 2

(2,990)

(3,665)

(6,655)

(2,191)

(1,803)

(3,994)

(1,921)

(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

$  560,622

$  275,429

$  309,186

$  584,615

$  323,750

$  304,732

$   1,213,097











Adjusted diluted net earnings per share:







Diluted net earnings per share

$       1.63

$       1.72

$       3.35

$       1.56

$       2.00

$       3.56

$       2.00

$       1.87

$             7.42

Purchase accounting expenses, pre-tax 1

0.30

0.29

0.59

0.37

0.33

0.69

0.28

0.29

1.27

Purchase accounting expenses, tax impact 2

(0.07)

(0.06)

(0.13)

(0.09)

(0.08)

(0.16)

(0.07)

(0.06)

(0.30)

Restructuring and other costs, pre-tax 3

0.10

0.13

0.23

0.07

0.05

0.13

0.06

0.08

0.26

Restructuring and other costs, tax impact 2

(0.02)

(0.03)

(0.05)

(0.02)

(0.01)

(0.03)

(0.01)

(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

$       3.99

$       1.90

$       2.14

$       4.03

$       2.26

$       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. 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

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

ADJUSTED SEGMENT EBITDA




















Engineered Products:











Segment earnings

$     84,275

$     73,076

$   157,351

$     71,130

$     81,671

$   152,801

$     90,145

$   103,573

$   346,519

Other depreciation and amortization 1

7,070

7,300

14,370

7,274

6,799

14,073

6,819

6,853

27,745

Adjusted segment EBITDA 2

91,345

80,376

171,721

78,404

88,470

166,874

96,964

110,426

374,264

Adjusted segment EBITDA margin 2

18.4 %

17.0 %

17.7 %

16.1 %

17.2 %

16.7 %

18.8 %

21.0 %

18.3 %











Clean Energy & Fueling:









Segment earnings

$     73,605

$     83,616

$   157,221

$     72,962

$     99,034

$   171,996

$     90,208

$     90,789

$   352,993

Other depreciation and amortization 1

7,046

7,541

14,587

8,466

6,533

14,999

6,893

6,923

28,815

Adjusted segment EBITDA 2

80,651

91,157

171,808

81,428

105,567

186,995

97,101

97,712

381,808

Adjusted segment EBITDA margin 2

18.7 %

20.7 %

19.7 %

17.8 %

21.4 %

19.6 %

20.9 %

21.1 %

20.3 %











Imaging & Identification:









Segment earnings

$     68,315

$     61,336

$   129,651

$     58,598

$     61,392

$   119,990

$     74,477

$     73,617

$   268,084

Other depreciation and amortization 1

3,394

3,745

7,139

3,497

3,496

6,993

3,372

3,820

14,185

Adjusted segment EBITDA 2

71,709

65,081

136,790

62,095

64,888

126,983

77,849

77,437

282,269

Adjusted segment EBITDA margin 2

25.3 %

23.9 %

24.6 %

22.8 %

23.5 %

23.2 %

27.6 %

26.4 %

25.1 %











Pumps & Process Solutions:









Segment earnings

$   115,244

$   129,337

$   244,581

$   146,617

$   138,048

$   284,665

$   128,573

$   119,780

$   533,018

Other depreciation and amortization 1

10,939

11,609

22,548

9,922

9,787

19,709

10,137

10,993

40,839

Adjusted segment EBITDA 2

126,183

140,946

267,129

156,539

147,835

304,374

138,710

130,773

573,857

Adjusted segment EBITDA margin 2

30.5 %

30.3 %

30.4 %

36.0 %

33.5 %

34.7 %

32.0 %

31.3 %

33.2 %











Climate & Sustainability Technologies:








Segment earnings

$     73,778

$     76,074

$   149,852

$     53,609

$     64,181

$   117,790

$     75,190

$     61,504

$   254,484

Other depreciation and amortization 1

6,624

6,895

13,519

6,495

6,443

12,938

6,736

6,530

26,204

Adjusted segment EBITDA 2

80,402

82,969

163,371

60,104

70,624

130,728

81,926

68,034

280,688

Adjusted segment EBITDA margin 2

17.7 %

18.5 %

18.1 %

15.1 %

16.3 %

15.7 %

17.7 %

15.4 %

16.2 %











Total Segments:









Total segment earnings 2, 3

$   415,217

$   423,439

$   838,656

$   402,916

$   444,326

$   847,242

$   458,593

$   449,263

$  1,755,098

Other depreciation and amortization 1

35,073

37,090

72,163

35,654

33,058

68,712

33,957

35,119

137,788

Total Adjusted segment EBITDA 2

450,290

460,529

910,819

438,570

477,384

915,954

492,550

484,382

1,892,886

Total Adjusted segment EBITDA margin 2

21.7 %

21.9 %

21.8 %

21.4 %

22.1 %

21.8 %

22.8 %

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

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

Net earnings

$ 228,574

$ 242,239

$ 470,813

$ 226,153

$ 289,618

$ 515,771

$ 286,026

$ 263,579

$ 1,065,376

Provision for income taxes

57,716

57,784

115,500

49,550

45,738

95,288

67,007

59,834

222,129

Earnings before provision for income taxes

286,290

300,023

586,313

275,703

335,356

611,059

353,033

323,413

1,287,505

Interest income

(2,091)

(2,653)

(4,744)

(775)

(949)

(1,724)

(1,244)

(1,462)

(4,430)

Interest expense

34,214

33,804

68,018

26,552

26,989

53,541

29,789

33,126

116,456

Corporate expense / other 1,7

40,072

33,922

73,994

37,404

27,967

65,371

27,876

42,033

135,280

Loss on dispositions 2

—

—

—

194

—

194

—

—

194

Restructuring and other costs 3

14,053

18,143

32,196

10,552

7,944

18,496

8,613

11,881

38,990

Purchase accounting expenses 4

42,679

40,200

82,879

53,286

47,019

100,305

40,526

40,272

181,103

Total segment earnings 6

415,217

423,439

838,656

402,916

444,326

847,242

458,593

449,263

1,755,098

Add: Other depreciation and amortization 5

35,073

37,090

72,163

35,654

33,058

68,712

33,957

35,119

137,788

Total adjusted segment EBITDA 6

$ 450,290

$ 460,529

$ 910,819

$ 438,570

$ 477,384

$ 915,954

$ 492,550

$ 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, exit costs, and other asset 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

Q2

Q2 YTD

Organic

Engineered Products

(7.7) %

(2.3) %

Clean Energy & Fueling

(9.3) %

(6.1) %

Imaging & Identification

0.3 %

4.2 %

Pumps & Process Solutions

0.9 %

(3.1) %

Climate & Sustainability Technologies

4.0 %

9.9 %

Total Organic

(3.0) %

(0.1) %

Acquisitions

0.9 %

0.9 %

Currency translation

(0.6) %

(1.5) %

Total*

(2.7) %

(0.7) %

* Totals may be impacted by rounding.


2023

Q2

Q2 YTD

Organic

United States

(8.6) %

(3.2) %

Other Americas

13.9 %

15.3 %

Europe

(0.9) %

(0.6) %

Asia

1.9 %

(1.0) %

Other

33.0 %

26.7 %

Total Organic

(3.0) %

(0.1) %

Acquisitions

0.9 %

0.9 %

Currency translation

(0.6) %

(1.5) %

Total*

(2.7) %

(0.7) %

* Totals may be impacted by rounding.

Adjusted EPS Guidance Reconciliation

Range

2023 Guidance for Earnings per Share (GAAP)

$          7.68

$          7.83

Purchase accounting expenses, net

0.91

Restructuring and other costs, net

0.26

2023 Guidance for Adjusted Earnings per Share (Non-GAAP)

$          8.85

$          9.00

* 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

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

Net Cash Flows Provided By (Used In):






Operating activities

$ 241,284

$ 195,254

$ 436,538

$   23,683

$ 178,773

$ 202,456

$ 264,625

$ 338,643

$ 805,724

Investing activities

(43,556)

(42,454)

(86,010)

(46,963)

(68,890)

(115,853)

(286,208)

(138,863)

(540,924)

Financing activities

(306,565)

(137,924)

(444,489)

(75,204)

120,469

45,265

(178,844)

(126,686)

(260,265)

Quarterly Free Cash Flow (Non-GAAP)


2023

2022

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

Cash flow from operating activities

$  241,284

$  195,254

$  436,538

$  23,683

$  178,773

$  202,456

$  264,625

$  338,643

$  805,724

Less: Capital expenditures

(48,375)

(40,079)

(88,454)

(50,381)

(50,196)

(100,577)

(65,462)

(54,923)

(220,962)

Free cash flow

$  192,909

$  155,175

$  348,084

$ (26,698)

$  128,577

$  101,879

$  199,163

$  283,720

$  584,762











Cash flow from operating activities as a percentage of revenue

11.6 %

9.3 %

10.4 %

1.2 %

8.3 %

4.8 %

12.3 %

15.8 %

9.5 %











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

88.5 %

67.8 %

77.9 %

8.6 %

57.8 %

34.6 %

81.7 %

111.1 %

66.4 %











Free cash flow as a percentage of revenue

9.3 %

7.4 %

8.3 %

(1.3) %

6.0 %

2.4 %

9.2 %

13.3 %

6.9 %











Free cash flow as a percentage of adjusted net earnings

70.7 %

53.9 %

62.1 %

(9.7) %

41.6 %

17.4 %

61.5 %

93.1 %

48.2 %

DOVER CORPORATION

PERFORMANCE MEASURES

(unaudited)(in thousands)


2023

2022

Q1

Q2

Q2 YTD

Q1

Q2

Q2 YTD

Q3

Q4

FY 2022

BOOKINGS




















Engineered Products

$    536,472

$    489,131

$ 1,025,603

$    541,035

$    452,668

$    993,703

$    512,374

$    498,249

$ 2,004,326

Clean Energy & Fueling

454,526

440,137

$    894,663

501,491

487,861

989,352

432,259

399,414

1,821,025

Imaging & Identification

290,712

262,092

$    552,804

307,104

292,136

599,240

281,789

273,170

1,154,199

Pumps & Process Solutions

464,297

394,317

$    858,614

459,790

471,693

931,483

415,253

362,468

1,709,204

Climate & Sustainability Technologies

300,014

345,363

$    645,377

444,852

403,574

848,426

422,820

388,527

1,659,773

Intersegment eliminations

(1,530)

(1,917)

(3,447)

(2,295)

(1,207)

(3,502)

(423)

(1,391)

(5,316)

Total consolidated bookings

$ 2,044,491

$ 1,929,123

$ 3,973,614

$ 2,251,977

$ 2,106,725

$ 4,358,702

$ 2,064,072

$ 1,920,437

$ 8,343,211











BACKLOG




















Engineered Products

$    755,442

$    771,888

$    830,135

$    759,589

$    742,766

$    720,114

Clean Energy & Fueling

337,116

339,322

426,342

411,350

368,050

312,142

Imaging & Identification

236,215

227,646

243,411

255,255

241,896

232,812

Pumps & Process Solutions

742,890

676,191

704,935

715,646

679,955

686,512

Climate & Sustainability Technologies

899,379

797,307

1,218,155

1,186,180

1,139,737

1,068,644

Intersegment eliminations

(1,083)

(1,594)

(1,756)

(1,839)

(1,439)

(1,893)

Total consolidated backlog

$ 2,969,959

$ 2,810,760

$ 3,421,222

$ 3,326,181

$ 3,170,965

$ 3,018,331

2023

Q2

Q2 YTD

BOOKINGS GROWTH FACTORS






Organic


Engineered Products

8.4 %

4.3 %

Clean Energy & Fueling

(8.4) %

(7.2) %

Imaging & Identification

(8.5) %

(5.1) %

Pumps & Process Solutions

(19.4) %

(10.4) %

Climate & Sustainability Technologies

(13.7) %

(22.5) %

Total Organic

(8.3) %

(8.0) %

Acquisitions

0.7 %

0.9 %

Currency translation

(0.8) %

(1.7) %

Total*

(8.4) %

(8.8) %

* 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

[email protected]

[email protected]

SOURCE Dover

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