01—Abstract
Summary
Summary of the 10-K filed February 9, 2018. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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.
02—Key points
Key Highlights
- Consolidated revenue increased by 15.2% to $7.8 billion in 2017, driven by 7.8% organic growth and 9.7% acquisition-related growth.
- The company announced plans to spin off its upstream energy businesses (Wellsite) in May 2018, which will be treated as discontinued operations upon separation.
- Significant 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.
- Bookings increased by 17.0% to $8.0 billion in 2017, with a book-to-bill ratio of 1.02, indicating strong future demand.
- Dover 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.
- The company recorded a net tax benefit of $50.9 million in Q4 2017 primarily related to the U.S. Tax Cuts and Jobs Act.
- Restructuring charges of $59.2 million were incurred in 2017, primarily related to rightsizing efforts in preparation for the Wellsite separation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Dover Corp kept $0.12.
- Revenue$6.82B100.0%
- Cost of revenue−$4.29B62.9%
- Gross profit$2.53B37.1%
- Operating costs−$1.72B25.2%
- Operating income$806.9M11.8%
- Interest, other & tax$4.8M0.1%
- Net income$811.7M11.9%
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 9, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $6.82B$6.04B | +12.9% |
| Cost of Revenue | $4.29B$3.82B | +12.5% |
| Gross Profit | $2.53B$2.23B | +13.5% |
| R&D Expenses | $130.54M$115.84M | +12.7% |
| SG&A Expenses | $1.72B$1.52B | +13.4% |
| Operating Income | $806.89M$708.97M | +13.8% |
| Interest Expense | $144.95M$135.97M | +6.6% |
| Net Income | $811.66M$508.89M | +59.5% |
| EPS (Basic) | $5.21$3.28 | +58.8% |
| EPS (Diluted) | $5.15$3.25 | +58.5% |
| Shares Outstanding (Basic) | 155.69M155.23M | +0.3% |
| Shares Outstanding (Diluted) | 157.74M156.64M | +0.7% |
05—Questions
Frequently Asked Questions
What is the strategic outlook for Dover Corporation based on this filing?
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.
How did the company perform financially in 2017?
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.
What are the key segments of Dover Corporation and how did they perform?
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.
What is the significance of the planned spin-off of the Wellsite 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.
06—Continue