10-QPeriod: Q3 FY2022

DOVER Corp Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 20, 2022For Securities:DOV

Summary

Dover Corporation (DOV) reported a 6.9% increase in revenue for the third quarter of 2022 compared to the prior year, reaching $2.2 billion. This growth was driven by a combination of organic revenue increases (9.0%) and contributions from recent acquisitions (4.4%), though partially offset by unfavorable foreign currency translation (4.8%). The company effectively utilized pricing strategies to counter rising material, logistics, and labor costs, which impacted gross profit margin, causing a slight decrease to 35.8% from 37.4% year-over-year. Net earnings for the quarter rose by 8.4% to $286.0 million, translating to $2.00 per diluted share, up from $1.81 in the prior year. This growth was attributed to increased volumes, productivity initiatives, favorable business mix, and pricing actions. The company also noted a significant increase in cash used for investing activities, primarily due to acquisitions, and a decrease in cash from operating activities compared to the prior year, largely driven by higher working capital investments. The company maintained compliance with its debt covenants and has sufficient liquidity for its operational and strategic needs.

Financial Highlights

47 data points
Beta

Revenue

$2.16B

35.8% Gross Margin

Net Income

$286.03M

13.3% Net Margin

EPS (Diluted)

$2.00

Total Assets

$10.65B

Cash & Equivalents

$306.00M

Free Cash Flow

$199.16M

Financial Statements
Beta
Revenue$2.16B
Cost of Revenue$1.39B
Gross Profit$772.75M
SG&A Expenses$402.34M
Operating Income$370.41M
Interest Expense$29.79M
Net Income$286.03M
EPS (Basic)$2.01
EPS (Diluted)$2.00
Shares Outstanding (Basic)142.51M
Shares Outstanding (Diluted)143.26M

Key Highlights

  • 1Revenue increased by 6.9% to $2.2 billion in Q3 2022, driven by organic growth and acquisitions.
  • 2Net earnings rose by 8.4% to $286.0 million, with diluted EPS at $2.00.
  • 3Gross profit margin declined to 35.8% from 37.4% due to increased cost of goods and services.
  • 4Selling, general and administrative expenses decreased by 2.5% year-over-year, partly due to foreign currency impacts and lower accrued expenses.
  • 5The company completed the acquisition of Malema Engineering Corporation for $220.8 million.
  • 6Cash used in investing activities increased significantly due to acquisitions.
  • 7Cash provided by operating activities decreased compared to the prior year, impacted by higher working capital investments, particularly in inventory.

Frequently Asked Questions

Revenue growth was primarily driven by a 9.0% increase in organic revenue, supported by pricing initiatives and strong demand in segments like Engineered Products and Climate & Sustainability Technologies. Acquisitions also contributed positively, adding 4.4% to revenue growth.

Dover continues to experience cost inflation in materials, energy, freight, and labor. While pricing initiatives have helped offset these costs and maintain margins, the company anticipates these pressures to continue throughout the remainder of 2022.

Dover has actively pursued acquisitions, notably the acquisition of Malema Engineering Corporation in Q3 2022. These acquisitions have contributed to revenue growth but also increased cash used in investing activities and are a factor in purchase accounting expenses.

The company reported cash and cash equivalents of $306.0 million as of September 30, 2022. While cash from operations decreased year-over-year due to working capital investments, Dover maintains a strong financial position with sufficient liquidity and is in compliance with its debt covenants.