10-QPeriod: Q1 FY2021

DOVER Corp Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 20, 2021For Securities:DOV

Summary

Dover Corporation reported a strong first quarter for 2021, with revenue increasing by 12.8% year-over-year to $1.9 billion, driven by broad-based organic growth across all segments, particularly in Pumps & Process Solutions and Refrigeration & Food Equipment. Net earnings saw a significant 32.0% increase to $232.8 million, translating to diluted earnings per share of $1.61, up from $1.21 in the prior year. This performance reflects a robust recovery from the impacts of COVID-19 in 2020, with improved demand, favorable pricing, and successful productivity initiatives contributing to a 17.9% rise in gross profit and an expansion in gross profit margin to 38.6%. The company also demonstrated strong free cash flow generation, up significantly to $145.9 million from $35.7 million in the prior year, underscoring operational efficiency and effective working capital management. Bookings also surged by 30.7%, indicating a healthy demand pipeline for the upcoming quarters, with backlog reaching $2.2 billion. A subsequent event notes the completion of the AvaLAN Wireless Systems acquisition on April 19, 2021, for approximately $40.0 million, further strengthening the Fueling Solutions segment.

Financial Highlights

47 data points
Beta

Revenue

$1.87B

38.6% Gross Margin

Net Income

$232.77M

12.5% Net Margin

EPS (Diluted)

$1.61

Total Assets

$9.27B

Cash & Equivalents

$536.51M

Free Cash Flow

$145.92M

Financial Statements
Beta
Revenue$1.87B
Cost of Revenue$1.15B
Gross Profit$721.55M
SG&A Expenses$409.00M
Operating Income$312.55M
Interest Expense$26.82M
Net Income$232.77M
EPS (Basic)$1.62
EPS (Diluted)$1.61
Shares Outstanding (Basic)143.76M
Shares Outstanding (Diluted)144.94M

Key Highlights

  • 1Revenue increased by 12.8% to $1.9 billion, driven by an 8.8% organic growth.
  • 2Net earnings rose by 32.0% to $232.8 million, with diluted EPS of $1.61.
  • 3Gross profit margin improved by 160 basis points to 38.6% due to strong organic growth and operational efficiencies.
  • 4Bookings increased by 30.7% to $2.3 billion, indicating strong future demand, and backlog grew to $2.2 billion.
  • 5Free cash flow generation was robust, increasing to $145.9 million from $35.7 million in the prior year period.
  • 6The company completed the acquisition of AvaLAN Wireless Systems for approximately $40.0 million, enhancing its Fueling Solutions segment.

Frequently Asked Questions

The primary driver of revenue growth was broad-based organic growth of 8.8% across all segments, particularly in the Pumps & Process Solutions and Refrigeration & Food Equipment segments. This was supplemented by a favorable impact from foreign currency translation (3.1%) and acquisitions (1.2%), partially offset by dispositions (0.3%).

Dover Corporation improved profitability through a combination of factors including organic revenue growth, favorable operating leverage, a beneficial product mix, and the positive impact of productivity and cost reduction actions. Selling, general, and administrative expenses as a percentage of revenue decreased due to the increased revenue base, despite a modest increase in absolute dollar terms.

The company demonstrated strong free cash flow generation, increasing to $145.9 million from $35.7 million in the prior year. Dover expects operating cash flow, its existing credit facility, and access to capital markets to satisfy its cash flow requirements, including acquisitions, capital expenditures, and share repurchases, indicating a strong liquidity position.

There were no acquisitions during the three months ended March 31, 2021. However, the company reported the sale of the AMS Chino branch in the prior year's comparable quarter. A subsequent event notes the completion of the AvaLAN Wireless Systems acquisition on April 19, 2021.