10-KPeriod: FY2017

DOVER Corp Annual Report, Year Ended Dec 31, 2017

Filed February 9, 2018For Securities:DOV

Summary

Dover Corporation's 2017 10-K filing reveals a strong year of revenue growth, primarily driven by acquisitions and organic expansion across its key segments. The company reported consolidated revenue of $7.8 billion, a 15.2% increase over the prior year, with notable organic growth in the Energy and Engineered Systems segments. Management highlighted improvements in gross profit margin and a positive book-to-bill ratio, indicating healthy demand. A significant strategic move announced was the planned spin-off of its upstream energy businesses ('Wellsite') in May 2018, which is expected to streamline operations and allow for capital allocation to shareholders. The company also made strategic divestitures of non-core businesses within the Engineered Systems segment and continued its practice of increasing dividends and repurchasing shares, underscoring a commitment to shareholder returns.

Financial Highlights

55 data points
Beta

Revenue

$6.82B

37.1% Gross Margin

Net Income

$811.66M

11.9% Net Margin

EPS (Diluted)

$5.15

Total Assets

$10.66B

Cash & Equivalents

$753.96M

Free Cash Flow

$569.34M

Financial Statements
Beta
Revenue$6.82B
Cost of Revenue$4.29B
Gross Profit$2.53B
R&D Expenses$130.54M
SG&A Expenses$1.72B
Operating Income$806.89M
Interest Expense$144.95M
Net Income$811.66M
EPS (Basic)$5.21
EPS (Diluted)$5.15
Shares Outstanding (Basic)155.69M
Shares Outstanding (Diluted)157.74M

Key Highlights

  • 1Consolidated revenue increased by 15.2% to $7.8 billion in 2017, driven by 7.8% organic growth and 9.7% acquisition-related growth.
  • 2The company announced plans to spin off its upstream energy businesses (Wellsite) in May 2018, which will be treated as discontinued operations upon separation.
  • 3Significant divestitures were made in the Engineered Systems segment, including the sale of the consumer and industrial winch business of Warn Industries and Performance Motorsports International.
  • 4Bookings increased by 17.0% to $8.0 billion in 2017, with a book-to-bill ratio of 1.02, indicating strong future demand.
  • 5Dover continued its commitment to shareholder returns by repurchasing approximately $105 million of its common stock and increasing its annual dividend for the 62nd consecutive year.
  • 6The company recorded a net tax benefit of $50.9 million in Q4 2017 primarily related to the U.S. Tax Cuts and Jobs Act.
  • 7Restructuring charges of $59.2 million were incurred in 2017, primarily related to rightsizing efforts in preparation for the Wellsite separation.

Frequently Asked Questions

Dover is focusing on growth in its core segments, leveraging organic growth and strategic acquisitions. The planned spin-off of its energy business (Wellsite) aims to create a more focused portfolio and allow for capital allocation back to shareholders. The company is also emphasizing innovation, operational excellence, and disciplined capital allocation, including returning capital through dividends and share repurchases.

In 2017, Dover experienced significant revenue growth, reaching $7.8 billion, an increase of 15.2% over 2016. This growth was fueled by strong organic performance across multiple segments and strategic acquisitions. Earnings from continuing operations also saw a substantial increase of 59.5% to $811.7 million.

Dover operates in four key segments: Engineered Systems, Fluids, Refrigeration & Food Equipment, and Energy. Engineered Systems and Fluids showed strong revenue growth in 2017. The Energy segment also saw significant revenue growth, driven by improved market conditions in oil and gas. Refrigeration & Food Equipment experienced a slight revenue decrease, partly due to divestitures, but saw organic growth in its refrigeration business.

The spin-off of the Wellsite business is a significant strategic move to create two more focused, publicly traded companies. This is expected to unlock shareholder value by allowing each entity to pursue its distinct growth strategies and capital allocation priorities more effectively. Dover anticipates using proceeds from related debt to fund share repurchases.