01—Abstract
Summary
Summary of the 10-K filed February 20, 2009. Cited figures are marked; the original filing is the authoritative source.
Dover Corporation's (DOV) 2008 10-K filing highlights a company navigating a challenging economic environment.
Revenue saw a modest increase of 3% year-over-year to $7.57 billiona, driven by growth in Fluid Management and Industrial Products segments, partially offset by a decline in Engineered Systems. Despite revenue growth, net earnings decreased from $661 million in 2007 to $591 million in 2008, equating to diluted EPS of $3.12, down from $3.26 in the prior year. This decline is partly attributed to a significant loss from discontinued operations.
The company's outlook for 2009 is cautious, with management projecting a revenue decline of 11-13% and diluted EPS in the range of $2.75 to $3.05b, reflecting expectations of continued economic weakness. Dover is actively managing costs, including workforce reductions, and focusing on maintaining strong free cash flow, which was robust at $834.6 million in 2008. The company's financial condition remains solid, with a decreasing net debt to total capitalization ratio and ample liquidity through its revolving credit facility.
02—Key points
Key Highlights
- Revenue grew 3% to $7.57 billion in 2008, driven by acquisitions and growth in Fluid Management and Industrial Products.
- Net earnings decreased to $591 million ($3.12 diluted EPS) in 2008 from $661 million ($3.26 diluted EPS) in 2007, impacted by a loss from discontinued operations.
- The company anticipates a challenging 2009, forecasting an 11-13% revenue decline and diluted EPS between $2.75 and $3.05.
- Free cash flow remained strong at $834.6 million in 2008, reflecting effective working capital management.
- Dover made significant share repurchases in 2008, completing its $500 million program.
- The company is implementing cost reduction measures, including workforce reductions of approximately 6% in 2008 and plans for further reductions in 2009.
- The net debt to total capitalization ratio improved to 24.9% in 2008 from 27.3% in 2007.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, Dover Corp kept $0.08.
- Revenue$7.57B100.0%
- Cost of revenue−$4.84B63.9%
- Gross profit$2.73B36.1%
- Operating costs−$1.70B22.5%
- Operating income$1.03B13.6%
- Interest, other & tax−$438.5M5.8%
- Net income$590.8M7.8%
04—Financials
Financial Highlights
Figures from 10-KFY2008filed February 20, 2009Financial Statements
FY2008 against FY2007
| Line item | FY2008FY2007 | Change |
|---|---|---|
| Revenue | $7.57B$7.32B | +3.4% |
| Cost of Revenue | $4.84B$4.70B | +3.0% |
| Gross Profit | $2.73B$2.62B | +4.2% |
| R&D Expenses | $189.22M— | — |
| SG&A Expenses | $1.70B$1.61B | +5.4% |
| Operating Income | $1.03B$1.01B | +2.4% |
| Interest Expense | $130.15M— | — |
| Net Income | $590.83M$661.08M | −10.6% |
| EPS (Basic) | $3.13$3.28 | −4.6% |
| EPS (Diluted) | $3.12$3.26 | −4.3% |
| Shares Outstanding (Basic) | 188.48M201.33M | −6.4% |
| Shares Outstanding (Diluted) | 189.27M202.92M | −6.7% |
05—Questions
Frequently Asked Questions
What was Dover's financial performance in 2008?
In 2008, Dover Corporation reported a 3% increase in revenue to $7.57 billion. However, net earnings decreased to $591 million, or $3.12 per diluted share, compared to $661 million, or $3.26 per diluted share, in 2007. This decrease was partly due to losses from discontinued operations.
What is Dover's outlook for 2009?
Dover's management provided a cautious outlook for 2009, anticipating an 11-13% decline in revenue and projecting diluted earnings per share to be in the range of $2.75 to $3.05, reflecting the ongoing global economic downturn.
How did Dover manage its financial resources in 2008?
Dover maintained a strong financial position in 2008, generating robust free cash flow of $834.6 million. The company reduced its debt levels, with the net debt to total capitalization ratio improving to 24.9% from 27.3% in the prior year, and completed its $500 million share repurchase program.
What segments drove revenue and earnings in 2008?
The Fluid Management segment saw significant revenue growth (16%) and earnings improvement (27%) driven by strong performance in oil, gas, and power generation markets. The Industrial Products segment also experienced revenue growth (2%), but earnings declined due to weakness in construction and automotive markets. Engineered Systems saw a revenue decline, while Electronic Technologies' revenue was flat.
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