01—Abstract
Summary
Summary of the 10-K/A filed February 16, 2018. Cited figures are marked; the original filing is the authoritative source.
Dover Corporation's 2017 10-K filing shows a strong year with a 15.2% revenue increase to $7.8 billiona, driven by a combination of organic growth (7.8%) and strategic acquisitions (9.7%).
The company's diversified business segments—Engineered Systems, Fluids, Refrigeration & Food Equipment, and Energy—each contributed to this growth, with notable expansion in the Energy and Fluids segments. Significant divestitures were also completed in 2017, including Performance Motorsports International and the consumer and industrial winch business of Warn Industries, which contributed to the company's gains. A major strategic initiative highlighted is the planned tax-free spin-off of the upstream energy businesses ('Wellsite') into a standalone company, expected to be completed in May 2018.
This separation aims to allow Dover to focus on its core industrial manufacturing businesses. The company also announced a new share repurchase authorization and continued its long history of increasing dividends, demonstrating a commitment to returning capital to shareholders. The company's financial position remains strong, with a decrease in its net debt to net capitalization ratio.
02—Key points
Key Highlights
- Dover Corporation reported a 15.2% increase in revenue to $7.8 billion for 2017, driven by robust organic growth and strategic acquisitions.
- The company announced plans to spin off its upstream energy businesses ('Wellsite') into a standalone public company, expected in May 2018.
- Significant divestitures were completed in 2017, including Performance Motorsports International and the consumer and industrial winch business of Warn Industries, contributing to substantial gains on sale.
- The company's commitment to shareholder returns is evidenced by a new share repurchase authorization and a consistent history of increasing annual dividends.
- Bookings increased by 17.0% to $8.0 billion in 2017, with a book-to-bill ratio of 1.02, indicating strong demand.
- The net debt to net capitalization ratio improved to 39.1% at year-end 2017, reflecting a stronger financial leverage position.
- The company made substantial investments in research and development, totaling $125.0 million in 2017, to drive product innovation.
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-K/AFY2017filed February 16, 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 main strategic initiative announced by Dover Corporation in this filing?
The main strategic initiative is the planned tax-free spin-off of its upstream energy businesses, referred to as the 'Wellsite' business, into a separate, publicly traded company. This separation is expected to occur in May 2018 and aims to allow Dover to sharpen its focus on its core industrial manufacturing operations.
How did Dover Corporation's revenue perform in 2017?
Dover Corporation experienced a strong year with a 15.2% increase in consolidated revenue, reaching $7.8 billion. This growth was driven by a 7.8% organic revenue increase and a 9.7% increase from acquisitions, alongside a modest 0.4% favorable impact from foreign currency translation. Dispositions had a 2.7% negative impact.
What is Dover Corporation's approach to returning capital to shareholders?
Dover Corporation demonstrates its commitment to returning capital through two primary methods: consistent dividend payments, which have increased annually for 62 consecutive years, and share repurchases. The company approved a new standing share repurchase authorization in February 2018 to repurchase up to 20 million shares of its common stock through December 31, 2020.
How did the company's segments perform in 2017?
All four segments showed positive performance. Engineered Systems revenue grew 8.9%, Fluids revenue increased significantly by 32.4% (driven by acquisitions), Refrigeration & Food Equipment revenue saw a slight decrease of 1.3% (impacted by dispositions but with organic growth), and the Energy segment revenue grew by 26.9%, fueled by increased drilling and production activity.
06—Continue