10-QPeriod: Q1 FY2014

DOVER Corp Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 17, 2014For Securities:DOV

Summary

Dover Corporation (DOV) reported its first-quarter 2014 financial results, demonstrating solid revenue growth driven by contributions from acquisitions and organic expansion across key segments, particularly Fluids and Engineered Systems. The company successfully completed the spin-off of its Knowles Corporation business, a significant event impacting its financial statements by reclassifying Knowles' historical results as discontinued operations. This strategic move, along with a realignment of its business segments into four core areas, positions Dover for future growth and operational efficiencies. Despite a decline in free cash flow due to increased working capital investment and capital expenditures, the company maintained a strong liquidity position and provided an optimistic outlook for the full year, projecting revenue growth and stable segment margins.

Financial Highlights

46 data points
Beta

Revenue

$1.80B

39.3% Gross Margin

Net Income

$160.14M

8.9% Net Margin

EPS (Diluted)

$0.93

Total Assets

$8.66B

Cash & Equivalents

$486.04M

Free Cash Flow

-$4.33M

Financial Statements
Beta
Revenue$1.80B
Cost of Revenue$1.09B
Gross Profit$707.86M
SG&A Expenses$433.40M
Operating Income$274.46M
Net Income$160.14M
EPS (Basic)$0.94
EPS (Diluted)$0.93
Shares Outstanding (Basic)169.75M
Shares Outstanding (Diluted)172.01M

Key Highlights

  • 1Consolidated revenue for Q1 2014 increased by 6.8% to $1.88 billion compared to Q1 2013, driven by a 3.9% organic revenue increase and a 3.0% contribution from acquisitions.
  • 2The company completed the spin-off of Knowles Corporation on February 28, 2014, reclassifying its historical results as discontinued operations.
  • 3Net earnings for Q1 2014 were $160.1 million ($0.93 diluted EPS), a decrease from $210.0 million ($1.20 diluted EPS) in Q1 2013, largely due to the reclassification of Knowles as discontinued operations.
  • 4Earnings from continuing operations increased by 5.4% to $176.3 million ($1.02 diluted EPS) in Q1 2014.
  • 5The Fluids segment showed strong revenue growth of 26.1%, and the Engineered Systems segment revenue grew by 7.3%.
  • 6Free cash flow for Q1 2014 decreased to $6.4 million from $31.4 million in Q1 2013, primarily due to higher investments in working capital and capital expenditures.
  • 7Dover repurchased $292.6 million of its common stock in Q1 2014 as part of a completed $1.0 billion share repurchase program.

Frequently Asked Questions

The spin-off of Knowles Corporation on February 28, 2014, resulted in the reclassification of Knowles' historical results of operations, cash flows, and related assets and liabilities to discontinued operations for all periods presented. This significantly impacted net earnings, showing a decrease from the prior year, while earnings from continuing operations showed growth.

Dover reported a consolidated revenue increase of 6.8% to $1.88 billion for the first quarter of 2014 compared to the same period in 2013. This growth was driven by a combination of organic expansion (3.9%) and contributions from recent acquisitions (3.0%).

Dover expects full-year 2014 organic revenue growth of 3.0% to 4.0%, complemented by acquisition growth of 3.0%, resulting in total revenue growth of 6.0% to 7.0%. The company anticipates its full-year 2014 segment margin to be approximately 18.0%, with diluted EPS projected to be in the range of $4.60 to $4.80.

Following a realignment in Q1 2014, Dover operates under four key segments: Energy, Engineered Systems, Fluids, and Refrigeration & Food Equipment.