EX-99.1 2 y26201exv99w1.htm EX-99.1: PRESS RELEASEE EX-99.1
 

Exhibit 99.1
(DOVER CORPORATION LOGO)
     
CONTACT:
  READ IT ON THE WEB
Paul Goldberg
Treasurer & Director of Investor Relations
(212) 922-1640
  www.dovercorporation.com


October 24, 2006
DOVER REPORTS THIRD QUARTER 2006 RESULTS
New York, New York, October 24, 2006 — Dover Corporation (NYSE: DOV) announced that for the third quarter ended September 30, 2006, it had earnings from continuing operations of $156.3 million or $0.76 diluted earnings per share (“EPS”), compared to $123.0 million or $0.60 EPS from continuing operations in the prior-year period, representing increases of 27% and 26%, respectively. Revenue for the third quarter of 2006 was $1,651.9 million, an increase of 21% over the prior-year period. Earnings from continuing operations for the third quarter of 2006 included $0.02 EPS related to the expensing of stock options and stock appreciation rights.
Net earnings for the third quarter of 2006 were $167.5 million or $0.82 EPS, including earnings from discontinued operations of $11.2 million or $0.05 EPS, compared to net earnings of $122.7 million or $0.60 EPS for the same period of 2005, which included a loss from discontinued operations of $0.4 million and no EPS impact.
Earnings from continuing operations for the nine months ended September 30, 2006 increased 38% to $446.3 million, or $2.17 EPS, compared to the prior year, and included $0.06 EPS related to the expensing of stock options and stock appreciation rights. Net earnings were $443.3 million or $2.16 EPS, compared to $394.0 million or $1.93 EPS in the prior year.
Commenting on the third quarter results, Dover’s President and Chief Executive Officer, Ronald L. Hoffman, stated: “Dover continues to post very positive comparative results with a 27% earnings increase on a 21% increase in sales for the third quarter. We also had a positive book to bill in the quarter. These results reflect continued strong performances at a number of Dover’s key platforms, particularly the Oil and Gas, Electronic Components, Product Identification, Mobile Equipment and Process Equipment Groups. We continue to generate strong, double-digit organic growth and have also realized a significant positive impact from our recent acquisitions. Quarterly free cash flow of $240 million was 15% of quarterly sales and 154% of quarterly net earnings. Our robust cash generation reflects Dover’s focus on working capital improvements in our operating companies. This is driven by the Dover metrics and the Performance Counts initiatives and validates our rebalanced portfolio of higher margin operating companies. We are also excited about the addition of Paladin Brands to the Dover family. Paladin serves a broad array of construction, demolition, utility and forestry customers with an extensive line of specialty attachments and tools sold primarily through a diverse distribution network.
Looking ahead, Dover enters the fourth quarter with record backlogs and demand remains strong in the Oil and Gas, Electronic Components, Product Identification and Process Equipment Groups. However, light construction and automotive markets continue to decline and semiconductor markets remain soft. Overall, we anticipate a solid fourth quarter, well ahead of prior year results, but moderating somewhat from the third quarter of 2006

 

 

2

given the effects of acquisition accounting costs at Paladin and Markem as well as the normal impact of the holiday season.”
Dover will host a Webcast of its third quarter 2006 conference call at 9:00 AM Eastern Time on Wednesday October 25, 2006. The Webcast can be accessed at the Dover Corporation website at www.dovercorporation.com. The conference call will also be made available for replay on the website and additional information on Dover’s third quarter 2006 results and its operating companies can also be found on the Company website and in the Company’s Form 10-Q filed after this release.
Dover Corporation makes information available to the public, orally and in writing, which may use words like “anticipates,” “expects,” “believes,” “indicates,” “suggests,” “will,” “plans” and “should,” which are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. This press release contains forward-looking statements concerning future events and the performance of Dover Corporation that involve inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, failure to achieve expected synergies, the impact of continued events in the Middle East on the worldwide economy, economic conditions, increases in the cost of raw materials, changes in customer demand, increased competition in the markets served by Dover Corporation’s operating companies, the impact of natural disasters, such as hurricanes, and their effect on global energy markets and other risks. Dover Corporation refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as its reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause its actual results to differ materially from its current expectations and from the forward-looking statements contained in this press release. Dover Corporation undertakes no obligation to update any forward-looking statement.
TABLES FOLLOW

 

3

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (in thousands, except per share figures)
                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2006     2005     2006     2005  
Revenue
   $ 1,651,927     $ 1,364,597     $ 4,813,554     $ 3,922,771  
Cost of goods and services
     1,070,569       882,538       3,067,317       2,540,453  
 
                        
Gross profit
     581,358       482,059       1,746,237       1,382,318  
Selling and administrative expenses
     355,264       301,005       1,059,130       900,364  
 
                        
Operating earnings
     226,094       181,054       687,107       481,954  
 
                        
Interest expense, net
     17,186       16,250       57,932       47,606  
Other expense (income), net
     2,609       (957 )     9,583       (9,398 )
 
                        
Total interest/other expense, net
     19,795       15,293       67,515       38,208  
 
                        
Earnings before provision for income taxes and discontinued operations
     206,299       165,761       619,592       443,746  
Provision for income taxes
     49,991       42,719       173,276       119,622  
 
                        
Earnings from continuing operations
     156,308       123,042       446,316       324,124  
 
                        
Earnings (loss) from discontinued operations, net
     11,217       (362 )     (3,054 )     69,891  
 
                        
Net earnings
   $ 167,525     $ 122,680     $ 443,262     $ 394,015  
 
                        
 
                                
Basic earnings (loss) per common share:
                                
Earnings from continuing operations
   $ 0.77     $ 0.61     $ 2.19     $ 1.60  
Earnings (loss) from discontinued operations
     0.06       —       (0.01 )     0.34  
Net earnings
     0.82       0.61       2.18       1.94  
 
                                
Weighted average shares outstanding
     203,682       202,572       203,629       203,057  
 
                        
 
                                
Diluted earnings (loss) per common share:
                                
Earnings from continuing operations
   $ 0.76     $ 0.60     $ 2.17     $ 1.59  
Earnings (loss) from discontinued operations
     0.05       —       (0.01 )     0.34  
Net earnings
     0.82       0.60       2.16       1.93  
 
                                
Weighted average shares outstanding
     205,313       203,918       205,294       204,236  
 
                        
 
                                
Dividends paid per common share
   $ 0.19     $ 0.17     $ 0.53     $ 0.49  
 
                        
The following table is a reconciliation of the share amounts used in computing earnings per share:
                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2006     2005     2006     2005  
Weighted average shares outstanding — Basic
     203,682       202,572       203,629       203,057  
Dilutive effect of assumed exercise of employee stock options
     1,631       1,346       1,665       1,179  
 
                        
 
                                
Weighted average shares outstanding — Diluted
     205,313       203,918       205,294       204,236  
 
                        
 
                                
Anti-dilutive shares excluded from diluted EPS computation
     1,837       3,755       2,252       4,537  

 

4
DOVER CORPORATION
MARKET SEGMENT INFORMATION
(unaudited)(in thousands)
                                                                                 
    2005     2006  
                            Q3             Q4                             Q3  
    Q1     Q2     Q3     YTD     Q4     YTD     Q1     Q2     Q3     YTD  
         
REVENUE
                                                                                
Diversified
   $ 185,058     $ 196,969     $ 185,050     $ 567,077     $ 182,006     $ 749,083     $ 199,864     $ 208,148     $ 196,360     $ 604,372  
Electronics
     116,980       121,700       112,781       351,461       194,582       546,043       199,495       222,751       225,469       647,715  
Industries
     193,955       210,450       206,274       610,679       207,267       817,946       208,571       215,338       221,387       645,296  
Resources
     356,307       377,135       390,249       1,123,691       395,247       1,518,938       425,162       435,341       463,853       1,324,356  
Systems
     155,871       177,735       197,076       530,682       174,695       705,377       181,285       234,124       217,543       632,952  
Technologies
     219,084       252,005       275,612       746,701       287,151       1,033,852       294,941       343,367       330,768       969,076  
Intramarket eliminations
     (2,400 )     (2,675 )     (2,445 )     (7,520 )     (3,352 )     (10,872 )     (3,088 )     (3,672 )     (3,453 )     (10,213 )
         
Total consolidated revenue
   $ 1,224,855     $ 1,333,319     $ 1,364,597     $ 3,922,771     $ 1,437,596     $ 5,360,367     $ 1,506,230     $ 1,655,397     $ 1,651,927     $ 4,813,554  
         
 
                                                                                
NET EARNINGS
                                                                                
Segment Earnings:
                                                                                
Diversified
   $ 20,424     $ 22,975     $ 23,121     $ 66,520     $ 20,770     $ 87,290     $ 22,676     $ 23,037     $ 23,061     $ 68,774  
Electronics
     9,227       12,259       5,208       26,694       20,194       46,888       20,754       29,862       31,618       82,234  
Industries
     21,918       24,418       28,180       74,516       29,764       104,280       27,328       30,208       31,389       88,925  
Resources
     62,747       65,545       65,077       193,369       67,302       260,671       82,797       80,919       76,641       240,357  
Systems
     22,037       26,910       29,221       78,168       21,920       100,088       26,971       38,341       24,920       90,232  
Technologies
     17,591       33,284       44,591       95,466       39,264       134,730       47,712       60,684       52,257       160,653  
         
Total segments
     153,944       185,391       195,398       534,733       199,214       733,947       228,238       263,051       239,886       731,175  
Corporate expense/other
     (15,197 )     (14,797 )     (13,387 )     (43,381 )     (14,906 )     (58,287 )     (18,558 )     (18,692 )     (16,401 )     (53,651 )
Net interest expense
     (16,115 )     (15,241 )     (16,250 )     (47,606 )     (24,603 )     (72,209 )     (21,480 )     (19,266 )     (17,186 )     (57,932 )
         
Earnings from continuing operations before provision for income taxes
     122,632       155,353       165,761       443,746       159,705       603,451       188,200       225,093       206,299       619,592  
Provision for income taxes
     31,023       45,880       42,719       119,622       40,250       159,872       56,850       66,435       49,991       173,276  
         
Earnings from continuing operations
     91,609       109,473       123,042       324,124       119,455       443,579       131,350       158,658       156,308       446,316  
Earnings (loss) from discontinued operations, net
     6,525       63,728       (362 )     69,891       (3,328 )     66,563       72,476       (86,747 )     11,217       (3,054 )
         
Net earnings
   $ 98,134     $ 173,201     $ 122,680     $ 394,015     $ 116,127     $ 510,142     $ 203,826     $ 71,911     $ 167,525     $ 443,262  
         
 
                                                                                
SEGMENT OPERATING MARGIN                                                                        
Diversified
     11.0 %     11.7 %     12.5 %     11.7 %     11.4 %     11.7 %     11.3 %     11.1 %     11.7 %     11.4 %
Electronics
     7.9 %     10.1 %     4.6 %     7.6 %     10.4 %     8.6 %     10.4 %     13.4 %     14.0 %     12.7 %
Industries
     11.3 %     11.6 %     13.7 %     12.2 %     14.4 %     12.7 %     13.1 %     14.0 %     14.2 %     13.8 %
Resources
     17.6 %     17.4 %     16.7 %     17.2 %     17.0 %     17.2 %     19.5 %     18.6 %     16.5 %     18.1 %
Systems
     14.1 %     15.1 %     14.8 %     14.7 %     12.5 %     14.2 %     14.9 %     16.4 %     11.5 %     14.3 %
Technologies
     8.0 %     13.2 %     16.2 %     12.8 %     13.7 %     13.0 %     16.2 %     17.7 %     15.8 %     16.6 %
QUARTERLY EPS
(unaudited) (in thousands)
                                                         
    2005                             2006              
    1 Qtr.     2 Qtr.     3 Qtr.     4 Qtr.     1 Qtr.     2 Qtr.     3 Qtr.  
     
Basic earnings (loss) per common share:
                                                        
Continuing operations
   $ 0.45     $ 0.54     $ 0.61     $ 0.59     $ 0.65     $ 0.78     $ 0.77  
Discontinued operations
     0.03       0.31       (0.00 )     (0.02 )     0.36       (0.43 )     0.06  
Net earnings
     0.48       0.85       0.61       0.57       1.00       0.35       0.82  
 
                                                        
Diluted earnings (loss) per common share:
                                                        
Continuing operations
   $ 0.45     $ 0.54     $ 0.60     $ 0.59     $ 0.64     $ 0.77     $ 0.76  
Discontinued operations
     0.03       0.31       (0.00 )     (0.02 )     0.35       (0.42 )     0.05  
Net earnings
     0.48       0.85       0.60       0.57       0.99       0.35       0.82  

 

 

5
DOVER CORPORATION MARKET
SEGMENT INFORMATION
(continued)
(unaudited) (in thousands)
                                                                                 
    2005     2006  
                            Q3             Q4                             Q3  
    Q1     Q2     Q3     YTD     Q4     YTD     Q1     Q2     Q3     YTD  
         
BOOKINGS
                                                                                
Diversified
   $ 231,308     $ 199,741     $ 184,191     $ 615,240     $ 194,965     $ 810,205     $ 214,317     $ 216,659     $ 203,986     $ 634,962  
Electronics
     122,960       117,234       118,484       358,678       213,304       571,982       223,559       219,784       231,527       674,870  
Industries
     196,455       209,887       214,973       621,315       224,942       846,257       219,423       232,185       251,017       702,625  
Resources
     387,122       375,164       394,567       1,156,853       393,148       1,550,001       454,669       441,761       471,625       1,368,055  
Systems
     156,181       221,709       201,360       579,250       176,185       755,435       231,036       229,633       210,132       670,801  
Technologies
     233,611       275,436       261,722       770,769       288,104       1,058,873       339,124       325,101       307,885       972,110  
 
                                                                                
BOOK-TO-BILL
                                                                                
Diversified
     1.25       1.01       1.00       1.08       1.07       1.08       1.07       1.04       1.04       1.05  
Electronics
     1.05       0.96       1.05       1.02       1.10       1.05       1.12       0.99       1.03       1.04  
Industries
     1.01       1.00       1.04       1.02       1.09       1.03       1.05       1.08       1.13       1.09  
Resources
     1.09       0.99       1.01       1.03       0.99       1.02       1.07       1.01       1.02       1.03  
Systems
     1.00       1.25       1.02       1.09       1.01       1.07       1.27       0.98       0.97       1.06  
Technologies
     1.07       1.09       0.95       1.03       1.00       1.02       1.15       0.95       0.93       1.00  
 
                                                                                
BACKLOG
                                                                                
Diversified
   $ 294,605     $ 296,607     $ 296,561       —     $ 308,587       —     $ 321,310     $ 327,943     $ 339,159       —  
Electronics
     83,269       78,197       93,459       —       141,102       —       165,253       163,182       169,151       —  
Industries
     197,043       196,445       205,286       —       222,793       —       234,174       251,301       282,234       —  
Resources
     167,810       165,087       169,580       —       167,561       —       196,379       203,757       249,040       —  
Systems
     125,037       170,238       172,806       —       174,402       —       223,843       218,360       211,939       —  
Technologies
     90,426       109,210       102,232       —       102,232       —       147,984       141,526       123,416       —