EXHIBIT 99.1
[DOVER CORPORATION LOGO]
FOR IMMEDIATE RELEASE
CONTACT: READ IT ON THE WEB
Robert G. Kuhbach http://www.dovercorporation.com
Vice President Finance &
Chief Financial Officer
(212) 922-1640 JANUARY 26, 2004
DOVER REPORTS FOURTH QUARTER AND FULL YEAR 2003 RESULTS
New York, New York (January 26, 2004). Dover Corporation (NYSE: DOV) earned
$285.2 million or $1.40 diluted earnings per share (EPS) from continuing
operations for the full year 2003, compared to $207.8 million or $1.02 EPS from
continuing operations in the comparable period last year, an increase of 37%.
Net earnings before the cumulative effect of accounting changes for the full
year of 2003 were $292.9 million or $1.44 EPS, including $7.7 million of
earnings or $.04 EPS from discontinued operations compared to $171.8 million or
$0.84 EPS, for the same period of 2002, which included $36.1 million or $.18 EPS
in losses from discontinued operations. Sales for the full year of 2003 were
$4,413.3 million, an increase of 9% as compared to $4,053.6 million for the
comparable period last year.
For the fourth quarter, Dover's earnings more than doubled to $80.7 million or
$.39 EPS from continuing operations, compared to $38.8 million or $.19 EPS from
continuing operations in the comparable period last year. Net earnings before
the cumulative effect of accounting changes for the fourth quarter of 2003 were
$76.3 million or $.37 EPS, which included $4.4 million of losses from
discontinued operations or $.02 EPS, compared to net earnings of $15.0 million
or $.07 EPS for the fourth quarter of 2002 which included $23.7 million or $.12
EPS in losses from discontinued operations. Sales in the fourth quarter of 2003
were $1,198.0 million, an increase of 19% as compared to $1,007.8 million for
the fourth quarter last year.
Commenting on the results and the current outlook, Thomas L. Reece, Chairman and
CEO, said: "Dover's performance in 2003 generated the second highest sales and
third highest net earnings in our history. This is a strong indication that we
are finally emerging from the manufacturing recession of the past three years.
These results are also a testament to the ability of Dover's operating
management to increase our operating leverage in a very difficult environment.
Our ongoing efforts to optimize operations and reduce costs while continuing to
invest in innovative new products, processes and solid R&D have enhanced our
competitive position in the marketplace. Going forward, we will be
well-positioned to capitalize on the increase in demand in the markets we serve.
"While we are very pleased with our full year results, I am particularly
encouraged by the overall trends coming out of the fourth quarter, which suggest
that 2004 will be even better. Resources, our most profitable segment, reported
record profits of $136.9 million, and we expect last year's Warn acquisition and
further improvements in many of Resource's energy and
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fluids handling businesses to drive an even stronger performance in 2004.
Diversified also showed positive improvements in sales, earnings and margins for
the fourth quarter compared to both the third quarter and prior year and posted
strong bookings in December. In particular, Hill Phoenix continues to gain
market share by providing its customers with innovative products while
increasing its overall operating leverage. Strong fourth quarter bookings at
Sargent, Tranter PHE and Crenlo also were encouraging as they suggest continued
improvements at Diversified. At Industries, while full year results were down
compared to 2002, the trends over the past three quarters have been positive,
and bookings, particularly late in the year, and year end backlog were both up
significantly. There are particularly encouraging signs at key Industries
companies like Rotary Lift, Heil Environmental, PDQ, Tipper Tie and Triton.
"At Technologies, the story is quite positive overall, although we believe some
caution is warranted in projecting the rate of further improvements in CBAT and
SEC results. As we said a year ago, we expected to achieve a solid "single
digit" earnings margin by the end of 2003 in CBAT and SEC. CBAT hit that target
in the third quarter and now must reinvest to support important new product
introductions. SEC would have met that target in the fourth quarter had it not
been for the loss experienced by K & L Microwave when it exited China and
refocused its business. Imaje had its best earnings year in 2003 and strongest
bookings quarter on record in the fourth quarter, aided only in part by a
favorable foreign exchange environment. Imaje continues to gain market share by
offering an ever more complete line of marking and coding products.
Technologies' CBAT equipment companies that serve the "early recovery" sector
of the industry have all seen meaningful improvements in sales, bookings and
backlog in the third and fourth quarters with modestly improved margins. The
balance of the CBAT companies, particularly Universal, are bringing exciting
new products to market, utilizing new Chinese assembly operations and sourcing
arrangements and optimizing efficiencies under extremely competitive market
conditions. It will take several months for these companies to absorb the
higher infrastructure costs and the inherent inefficiency related to
commercialization of new products. We fully expect that these efforts will be
successful, as recent bookings and year-end backlogs are up at both CBAT and
SEC sequentially for the past two quarters."
SEGMENT RESULTS
DIVERSIFIED
Three Months Ended December 31, Twelve Months Ended December 31,
(in thousands, unaudited) 2003 2002 % Change 2003 2002 % Change
- --------------------------------------------------------------- -------------------------------------
Net sales $302,215 $270,188 11.9% $1,168,256 $1,115,776 4.7%
Earnings 33,207 24,515 35.5% 131,867 127,454 3.5%
Operating margins 11.0% 9.1% 11.3% 11.4%
Bookings 302,648 264,082 14.6% 1,161,012 1,082,316 7.3%
Book-to-Bill 1.00 0.98 0.99 0.97
Backlog 334,349 331,234 0.9%
Diversified's fourth quarter results were a significant improvement over the
prior year, with positive earnings comparisons at eight of its eleven operating
companies. The significant contributors were SWEP, Hill Phoenix, SWF, Waukesha
and Mark Andy, all of which had favorable comparisons to prior year performance,
somewhat offset by Belvac which produced solid results, but earnings comparisons
were down due to a very strong prior year's quarter. Hill Phoenix was the
largest contributor to earnings on the strength of its display case and
refrigeration system business units. SWEP delivered the largest year-over-year
improvement, driven primarily by increased sales volume, improved productivity
and favorable currency rates. Both Mark Andy's and Waukesha's earnings and
margins doubled from the prior year's quarter, as recent cost cutting and
restructuring initiatives took effect. Although SWF continued to struggle with
a weak market, the comparison to prior year was favorable. Overall, total
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bookings at Diversified were up 15% in the fourth quarter particularly at
Sargent, which set a record based on new submarine ship set orders. SWEP,
Tranter PHE, Mark Andy and Crenlo also registered strong increases.
For the year, Hill Phoenix leveraged productivity gains and cost reductions to
increase margins and produce record sales, earnings and cash flow, while gaining
additional market share through the continued expansion of several of its key
customers. Sargent's earnings were down slightly compared to prior year, as its
strong military business and a successful acquisition in Canada were offset by
the extended commercial aerospace downturn. Performance Motorsports' earnings
declined for the first time since being acquired in 1998, as they dealt with
acquisition integration, several production issues and a weak powersports
market. The weak power generation market also continued to negatively impact
Waukesha, and a charge to close a manufacturing facility further reduced
earnings. Order intake increased in the second half of the year at SWEP, fueling
a 60% earnings increase over the prior year. Current backlog and bookings remain
high at SWEP, supporting continued strong performance for the first half of
2004. Benefiting from strong machine sales to Russia and Australia, Belvac
improved earnings 64% over the prior year on a six point margin increase.
Tranter PHE, despite lower earnings, saw significant growth in non-U.S. markets
as brisk order intake from Europe and Asia produced record bookings. The
remaining operating companies did not have a meaningful impact on segment
results.
INDUSTRIES
Three Months Ended December 31, Twelve Months Ended December 31,
(in thousands, unaudited) 2003 2002 % Change 2003 2002 % Change
- -------------------------------------------------------------------- --------------------------------
Net Sales $278,543 $253,839 9.7% $1,039,930 $1,034,714 0.5%
Earnings 36,132 30,514 18.4% 121,200 137,547 -11.9%
Operating margins 13.0% 12.0% 11.7% 13.3%
Bookings 320,174 221,046 44.8% 1,105,046 995,552 11.0%
Book-to-Bill 1.15 0.87 1.06 0.96
Backlog 201,866 119,881 68.4%
Industries' fourth quarter results were much improved over the prior year's
quarter, with positive earnings comparisons at seven of its twelve operating
companies, particularly PDQ, Heil Environmental and Rotary. The largest
contributor to quarterly earnings was PDQ, due to a record sales performance,
driven by successful new product introductions coupled with productivity
improvements. Heil Environmental also had increased earnings and was able to
maintain its market leading position as it experienced a 39% increase in
bookings. Rotary Lift's earnings improved, driven by strong overseas
performance. Chief Automotive's sales of computerized measuring products
increased earnings, while DI Foodservice's earnings decreased slightly due to
ongoing merger costs and weak end markets. The remaining operating companies
reported relatively flat earnings despite increased sales volumes.
For the full year, Industries earned 12% less on essentially flat sales,
reflecting plant closing costs and margin pressure from earlier in the year.
Nevertheless, quarterly sales and earnings improved sequentially as the year
progressed, culminating in fourth quarter results topping the three previous
quarters, reflecting market share increases across the majority of companies.
The biggest contributors were PDQ, resulting from strong new product sales as
mentioned above, and Tipper Tie, which benefited from strong overseas
performance, capitalizing on the opening of the Eastern European markets.
Kurz-Kasch, DovaTech and Somero showed modest improvements.
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Offsetting these positive contributors were a number of companies whose
performance declined significantly versus last year, primarily as a result of
continued market weakness. Specifically, Heil Environmental's earnings were down
30% as markets contracted for the third consecutive year. However, full year
bookings and backlog were up, reflecting favorable year over year comparisons
for the last two quarters. Heil Trailer closed two facilities, which negatively
impacted earnings, but full year bookings were up 50% and backlog tripled as
strong military shipments are expected to lead to improved performance in 2004.
Weak institutional markets contributed to DI Foodservice's performance, along
with ongoing costs to integrate the Groen, Randell and Avtec businesses.
Marathon's margins declined during 2003 due to pricing pressures driven by
market weakness and strong competition. Strength in Chief Automotive's
computerized measuring products was more than offset by market contraction in
their frame-straightening product line. Triton's revenues were the highest in
their history, driven by successful new product introductions, although earnings
were relatively flat due to new product start-up costs. The remaining companies
had a modest positive impact on full year sales.
RESOURCES
<Table>
<Caption>
Three Months Ended December 31, Twelve Months Ended December 31,
(in thousands, unaudited) 2003 2002 % Change 2003 2002 % Change
- ---------------------------------------------------------------- --------------------------------
Net sales $284,195 $219,670 29.4% $982,658 $872,898 12.6%
Earnings 34,918 30,117 15.9% 136,851 124,380 10.0%
Operating margins 12.3% 13.7% 13.9% 14.2%
Bookings 280,205 207,351 35.1% 990,057 867,155 14.2%
Book-to-Bill 0.99 0.94 1.01 0.99
Backlog 104,362 70,876 47.2%
</Table>
Resources' results for the fourth quarter improved over the prior year, with
positive earnings comparisons at eight of twelve operating companies. Most
businesses benefited from stronger markets worldwide, as well as management-led
initiatives to reduce cost and grow market share. Key positive contributors to
the quarterly results were Warn, the Energy Products Group and OPW Fueling
Components. Warn, acquired on October 1, 2003, was a significant driver of
Resources' revenue and earnings growth in the quarter even after the impact of
purchase accounting. However, the positive operating leverage at these
companies was partially offset by unfavorable comparisons at Blackmer, which
absorbed costs related to manufacturing realignments, Texas Hydraulics, and a
loss at RPA reflecting significant restructuring costs in France. The result of
these unfavorable quarterly events reduced Resources' quarterly margin
comparison to the prior year. Most Resources companies with strong global
positions benefited from the weaker dollar and improved business activity,
particularly in Asia and Europe.
For the full year, all 12 Resources operating companies increased bookings, 10
increased sales, and eight improved earnings as compared to prior year. In
2003, the Energy Products Group and C. Lee Cook provided much of the earnings
gain. These businesses were favorably impacted by demand generated by increased
prices for oil and gas. The long-term view of this market continues to be very
positive. The OPW companies both had an exceptionally strong year as a result
of new environmental regulations, global growth initiatives, global sourcing
and continued focus on cost reductions. They opened new facilities in China and
Brazil, strengthening their global reach. De-Sta-Co Industries had improved
sales and earnings as it expanded its served markets, patented new products and
refined distribution channels globally. The pump companies, Blackmer and
Wilden, faced various challenges in 2003 which hurt their earnings, although
both made strides to improve their product lines, global reach and
competitiveness and had full year positive increases in bookings and backlog.
Texas Hydraulics was down significantly due to the continued slow down in
construction equipment demand, but both it and Tulsa Winch showed some signs of
improvement as the year ended with increased
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bookings trends and strong backlog. Hydro Systems generated positive
comparisons to prior year due to its expansion into Asia and Latin America, as
well as significant contributions from new product introductions in Europe. RPA
Process Technologies experienced a very difficult year on a global basis due to
continued weakness in its primary markets -- pulp, paper, and refining --
resulting in a significant loss.
TECHNOLOGIES
<Table>
<Caption>
Three Months Ended December 31, Twelve Months Ended December 31,
(in thousands, unaudited) 2003 2002 % Change 2003 2002 % Change
- ---------------------------------------------------------------- --------------------------------------
Net sales $ 335,679 $ 265,588 26.4% $ 1,231,241 $ 1,036,472 18.8%
Segment earnings (losses) 23,741 (27,688) -- 84,763 (30,339) --
Operating margins 7.1% -10.4% 6.9% -2.9%
Bookings 354,176 261,417 35.5% 1,275,598 1,046,903 21.8%
Book-to-Bill 1.06 0.98 1.04 1.01
Backlog 182,427 127,752 42.8%
</Table>
The fourth quarter saw continued growth in bookings at all three Technologies
platforms, reporting a 7% sequential increase and a 36% increase over the
fourth quarter of 2002. While quarterly sales and earnings were up 26% and
$51.4 million over the fourth quarter of 2002, respectively, sales growth
slowed in the fourth quarter to 2% sequentially and earnings decreased $6.1
million to $23.7 million, reflecting $4.1 million in foreign exchange losses.
There were positive quarterly earnings comparisons at 10 of the 13 operating
companies. Both full year and fourth quarter results for 2002 include
inventory, restructuring and other pre-tax charges of $35.2 million and $25.1
million, respectively.
For the full year, all businesses except the two SEC microwave companies had
significant positive sales and earnings improvements, reflecting substantial
internal operating improvements, plus better external market conditions.
CIRCUIT BOARD ASSEMBLY AND TEST (CBAT)
<Table>
<Caption>
Three Months Ended December 31, Twelve Months Ended December 31,
(in thousands, unaudited) 2003 2002 % Change 2003 2002 % Change
- ---------------------------------------------------------------- --------------------------------------
Net sales $199,270 $152,579 30.6% $731,749 $598,646 22.2%
Segment earnings (losses) 12,406 (28,984) -- 43,691 (55,722) --
Operating margins 6.2% -19.0% 6.0% -9.3%
Bookings 212,478 148,463 43.1% 760,923 615,522 23.6%
Book-to-Bill 1.07 0.97 1.04 1.03
Backlog 107,036 72,166 48.3%
</Table>
For the fourth quarter, CBAT companies showed modest bookings growth over the
third quarter with significant increased demand for back end semiconductor
products at Everett Charles Technologies and Alphasem, and improvements at all
other companies except DEK and Universal. Although sales were down slightly
over the third quarter due to the timing of bookings, book to bill was 1.07.
This resulted in lower earnings in the quarter compared to the prior quarter,
including modest losses at Universal and Hover-Davis, as overall CBAT margins
dropped from 10% to 6%. While Universal's long-term prospects continue to
improve with a stronger backlog and positive book-to-bill, it is experiencing
increased infrastructure costs as it transitions to new products and expands
its Chinese assembly operation, which is not expected to reach full
commercialization until the second half of 2004.
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SPECIALTY ELECTRONIC COMPONENTS (SEC)
<Table>
<Caption>
Three Months Ended December 31, Twelve Months Ended December 31,
(in thousands, unaudited) 2003 2002 % Change 2003 2002 % Change
- -------------------------------------------------------------------------- ------------------------------------
Net sales $57,210 $49,946 14.5% $211,575 $205,635 2.9%
Segment earnings (losses) 1,696 (4,828) - 7,316 (12,070) -
Operating margins 3.0% -9.7% 3.5% -5.9%
Bookings 60,391 46,036 31.2% 221,145 199,255 11.0%
Book-to-Bill 1.06 0.92 1.05 0.97
Backlog 53,074 42,740 24.2%
</Table>
Vectron, the largest company in this group, showed positive results with sales
growing 23% from the same quarter last year and 11% sequentially, with
operating margin reaching 10% in the quarter, up from a loss last year and 7%
in the third quarter. Bookings at Vectron increased 30% for the quarter as
compared to the prior year. K&L Microwave continued to restructure its
operations, exiting completely from Asian manufacturing. As a result, K&L
reported a loss for the quarter and the year. Excluding this loss, the other
SEC business reported a $9.9 million improvement in earnings over the fourth
quarter of 2002 and reported fourth quarter operating margins of 10%.
Improvements came from continued successes in the military, space, medical and
industrial markets, and increased orders from their major telecom and datacom
customers. With a renewed focus on military and industrial markets, K&L
Microwave should return to profitability in 2004. Excepting K&L, all other SEC
companies experienced sequential sales and earnings growth in the quarter.
IMAJE
For the fourth quarter, Imaje's sales increased 26% over the same period in
2002. This reflects improved execution of Imaje's logistics and distribution
networks coupled with continued focus on new product development. Sales for
2003, as compared to 2002, were positively impacted by a 20% strengthening of
the Euro against the dollar. However, margins continue to be pressured as the
majority of Imaje's product costs are incurred in Euros. Consequently, Imaje is
in the process of expanding its production and delivery platforms in both China
and North America. These efforts should be accomplished by mid-2004. Imaje's
strategy of product diversification is taking hold as sales of other than small
character ink jet products grew to 21% of sales from 17% in 2002, while at the
same time ink jet unit sales grew 17% year over year. Bookings in the quarter
were up 22% from the prior year and the book-to-bill ratio for the quarter was
1.03. Ending backlog increased 74% from the end of last year. Full year
bookings increased 26% from last year, and the full year book-to-bill ratio was
1.02.
OTHER INFORMATION:
Discontinued operations losses for the quarter were $4.4 million compared to
$23.7 million for the same period last year. In the fourth quarter of 2003,
Dover discontinued five businesses in the Diversified, Industries and Resources
segments. Comparatively, during the fourth quarter of 2002, Dover discontinued
six businesses in the Resources and Technologies segments. 2003 operational
earnings from discontinued operations of $2.4 million or $.01 EPS for the fourth
quarter and $5.3 million or $.03 EPS for the year were offset by the write-down
of the discontinued businesses to their estimated fair value. Discontinued
operations earnings for the year were $7.7 million compared to losses of $36.1
million last year, and were primarily from the favorable resolution of certain
outstanding litigation and tax matters, as well as tax benefits related to
losses on sales of businesses. These items were partially offset by charges
related to
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contingent liabilities from the entities sold and the write-down of the
businesses discontinued to their estimated fair value.
For the full year of 2002, the impact of the adoption of the Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets",
resulted in a net loss of $121.3 million or $.60 EPS. The adoption resulted in a
goodwill impairment charge of $345.1 million ($293.0 million net of tax or $1.44
EPS). The adoption discontinued the amortization of goodwill effective January
1, 2002.
The effective tax expense rate for continuing operations for the fourth quarter
of 2003 was 20.8% compared to last year's fourth quarter tax benefit rate of
27.0%. The 2003 fourth quarter rate benefited from the utilization of net
operating loss carry forwards related to international locations. For the full
year of 2003, the effective tax rate for continuing operations was 23.3%,
compared to 21.1% for last year. The low effective tax rates are largely due to
the continuing benefit from tax credit programs such as those for R&D combined
with the benefit from U.S. export programs, lower effective foreign tax rates
and the recognition of certain capital loss benefits. During the fourth quarter,
the Company received tax refunds of approximately $151.5 million related to
federal tax return filings. The proceeds from the tax refund were used to pay
down commercial paper borrowings and for other general corporate purposes.
Net debt levels decreased $63.5 million during 2003 and the net debt to total
capitalization ratio decreased by approximately 4 percentage points during the
period. The following table provides a reconciliation of net debt to total
capitalization with the GAAP information found in the attached financial
statements.
<Table>
<Caption>
December 31, December 31,
Net Debt to Total Capitalization Ratio (in thousands, unaudited) 2003 2002
- ---------------------------------------------------------------------------------------------------------
Short-term debt and commercial paper $ 63,669 $ 23,761
Long-term debt 1,003,915 1,030,299
Less: Cash, equivalents and marketable securities 371,397 294,335
-------------------------------
Net debt 696,187 759,725
Add: Stockholders' equity 2,742,671 2,394,834
-------------------------------
Total capitalization $3,438,858 $3,154,559
Net debt to total capitalization 20.2% 24.1%
- ---------------------------------------------------------------------------------------------------------
</Table>
Free cash flow for the twelve months ended December 31, 2003 increased
significantly as cash generated from operations improved $236.5 million
compared to last year. The 2003 improvement in free cash flow reflects improved
net earnings, lower tax payments and tax refunds, offset slightly by an
increase in working capital. Year-to-date discretionary contributions to the
defined benefit pension plans were approximately $48.5 million. Dover did not
repurchase shares of its common stock on the open market during the quarter.
The following table is a reconciliation of free cash flow with cash flows from
operating activities.
<Table>
<Caption>
Twelve Months Ended December 31,
Free Cash Flow (in thousands, unaudited) 2003 2002
- ---------------------------------------------------------------------------------------------------------
Cash flow provided by operating activities $ 593,666 $ 357,144
Less: Capital expenditures (96,400) (96,417)
Dividends to stockholders (115,504) (109,436)
---------------------------------
Free cash flow $ 381,762 $ 151,291
- ---------------------------------------------------------------------------------------------------------
</Table>
During 2003, corporate expenses increased $9.7 million compared to the prior
year due to higher insurance and compensation costs, and costs incurred for
Sarbanes-Oxley compliance, various tax planning projects and other corporate
initiatives.
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On October 1, 2003, Dover acquired Warn Industries Inc. for approximately
$325 million in cash. Warn, located in Portland, Oregon, is the industry leader
in the design, manufacture and marketing of high-performance vehicular winches.
The Warn acquisition, after purchase accounting, was accretive to Dover's
earnings during the fourth quarter of 2003. Warn, with annual sales in excess
of $150 million, is a stand alone operating company within the Resources
segment. The acquisition was originally financed with existing cash on hand and
commercial paper borrowings. During the fourth quarter, all the commercial
paper borrowings associated with the acquisition were repaid.
Also during the fourth quarter, Dover acquired two small add-ons, one in each
of the Industries and Technologies market segments. Neither of these
acquisitions had a material impact on the quarterly financial results. For the
full year Dover invested $372.4 million in acquisitions compared to $100.1
million last year, on an economic cost basis.
In an effort to provide investors with additional information regarding the
company's results as determined by generally accepted accounting principles
(GAAP), the company also discloses non-GAAP information which management
believes provides useful information to investors. Free cash flow, net debt and
capitalization are not financial measures under GAAP, should not be considered
as a substitute for cash flows from operating activities, debt and equity, as
determined in accordance with GAAP and may not be comparable to similarly
titled measures reported by other companies. Management believes the net debt
to capitalization ratio and free cash flow are important measures of liquidity
and operating performance because they provide both management and investors a
measurement of cash generated from operations that is available to fund
acquisitions and repay debt.
The Dover website will host a Webcast of the fourth quarter and full year 2003
conference call at 9:00 AM Eastern Time on Tuesday, January 27, 2004. The
conference call will also be made available for replay on the website.
Additional information on Dover's fourth quarter and full year 2003 results and
its operating companies can be found on the company website,
(http://www.dovercorporation.com).
Dover Corporation makes information available to the public, orally and in
writing, which may use words like "expects" and "believes", which are
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. This press release contains forward-looking statements regarding
future events and the performance of Dover Corporation that involve risks and
uncertainties that could cause actual results to differ materially including,
but not limited to, failure to achieve expected synergies, failure to
successfully integrate acquisitions, the impact of continued events in the
Middle East on the worldwide economy, economic conditions, customer demand,
increased competition in the relevant market, and others. 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, which contain additional important factors that could cause its actual
results to differ from its current expectations and from the forward-looking
statements contained in this press release.
####TABLES TO FOLLOW
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DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE FIGURES)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
2003 2002 2003 2002
----------- ----------- ---------- -----------
Net sales $ 1,198,014 $ 1,007,817 $4,413,296 $ 4,053,593
Cost of sales 787,046 684,784 2,892,874 2,722,674
----------- ----------- ---------- -----------
Gross profit 410,968 323,033 1,520,422 1,330,919
Selling and administrative expenses 289,893 270,045 1,076,664 996,209
----------- ----------- ---------- -----------
Operating profit 121,075 52,988 443,758 334,710
----------- ----------- ---------- -----------
Interest expense, net 14,578 15,680 62,166 64,787
All other (income) expense, net 4,609 6,788 9,700 6,554
----------- ----------- ---------- -----------
Total 19,187 22,468 71,866 71,341
----------- ----------- ---------- -----------
Earnings from continuing operations, before taxes on income 101,888 30,520 371,892 263,369
Federal and other taxes on income 21,186 (8,250) 86,676 55,523
----------- ----------- ---------- -----------
Net earnings from continuing operations 80,702 38,770 285,216 207,846
----------- ----------- ---------- -----------
Net earnings (losses) from discontinued operations (4,383) (23,741) 7,711 (36,058)
----------- ----------- ---------- -----------
Net earnings before cumulative effect of change in accounting
principle 76,319 15,029 292,927 171,788
----------- ----------- ---------- -----------
Cumulative effect of change in accounting principle, net of tax -- -- -- (293,049)
----------- ----------- ---------- -----------
Net earnings (losses) $ 76,319 $ 15,029 $ 292,927 $ (121,261)
=========== =========== ========== ===========
Net earnings (losses) per common share:
Basic
- - Continuing operations $ 0.40 $ 0.19 $ 1.41 $ 1.02
- - Discontinued operations (0.02) (0.12) 0.04 (0.18)
----------- ----------- ---------- -----------
- - Total net earnings before cumulative effect of change in
accounting principle 0.38 0.07 1.45 0.85
- - Cumulative effect of change in accounting principle -- -- -- (1.45)
----------- ----------- ---------- -----------
- - Net earnings (losses) $ 0.38 $ 0.07 $ 1.45 $ (0.60)
=========== =========== ========== ===========
Diluted
- - Continuing operations $ 0.39 $ 0.19 $ 1.40 $ 1.02
- - Discontinued operations (0.02) (0.12) 0.04 (0.18)
----------- ----------- ---------- -----------
- - Total net earnings before cumulative effect of change in
accounting principle 0.37 0.07 1.44 0.84
- - Cumulative effect of change in accounting principle -- -- -- (1.44)
----------- ----------- ---------- -----------
- - Net earnings (losses) $ 0.37 $ 0.07 $ 1.44 $ (0.60)
=========== =========== ========== ===========
Weighted average number of common shares outstanding during
the period:
Basic 202,773 202,345 202,576 202,571
Diluted 204,361 202,829 203,614 203,346
DOVER CORPORATION
MARKET SEGMENT RESULTS
(UNAUDITED) (IN THOUSANDS)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
------------------------------- --------------------------------
SALES 2003 2002 2003 2002
----------- ----------- ----------- -----------
Diversified $ 302,215 $ 270,188 $ 1,168,256 $ 1,115,776
Industries 278,543 253,839 1,039,930 1,034,714
Resources 284,195 219,670 982,658 872,898
Technologies 335,679 265,588 1,231,241 1,036,472
Intramarket eliminations (2,618) (1,468) (8,789) (6,267)
----------- ----------- ----------- -----------
Net sales $ 1,198,014 $ 1,007,817 $ 4,413,296 $ 4,053,593
=========== =========== =========== ===========
EARNINGS
Diversified $ 33,207 $ 24,515 131,867 127,454
Industries 36,132 30,514 121,200 137,547
Resources 34,918 30,117 136,851 124,380
Technologies 23,741 (27,688) 84,763 (30,339)
----------- ----------- ----------- -----------
Subtotal continuing operations 127,998 57,458 474,681 359,042
Corporate expense (11,532) (11,258) (40,623) (30,886)
Net interest expense (14,578) (15,680) (62,166) (64,787)
----------- ----------- ----------- -----------
Earnings from continuing operations, before taxes on
income 101,888 30,520 371,892 263,369
Federal and other taxes on income 21,186 (8,250) 86,676 55,523
----------- ----------- ----------- -----------
Net earnings from continuing operations $ 80,702 $ 38,770 $ 285,216 $ 207,846
=========== =========== =========== ===========
DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET AND STATEMENT OF CASH FLOWS
(UNAUDITED) (IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
BALANCE SHEET 2003 2002
----------- -----------
ASSETS:
Cash and cash equivalents $ 370,379 $ 293,824
Receivables, net of allowances for doubtful accounts 747,567 641,824
Inventories 639,339 573,540
Prepaid expenses & other current assets 117,300 95,776
Property, plant & equipment, net 717,875 676,196
Goodwill 1,844,701 1,627,865
Intangibles, net 349,328 202,446
Other assets 208,069 167,516
Assets of discontinued operations 164,139 158,398
----------- -----------
$ 5,158,697 $ 4,437,385
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY:
Short term debt $ 63,669 $ 23,761
Payables and accrued expenses 705,702 571,917
Taxes payable and other deferrals 568,854 353,117
Long-term debt 1,003,915 1,030,299
Liabilities of discontinued operations 73,886 63,457
Stockholders' equity 2,742,671 2,394,834
----------- -----------
$ 5,158,697 $ 4,437,385
=========== ===========
TWELVE MONTHS ENDED DECEMBER 31,
--------------------------------
CASH FLOWS 2003 2002
----------- -----------
OPERATING ACTIVITIES:
Net earnings (loss) $ 292,927 $ (121,261)
Cumulative effective of change in accounting principle -- 293,049
(Earnings) loss from discontinued operations, net of tax (7,711) 36,058
Depreciation and amortization 151,309 156,946
Net change (increase) decrease in assets, liabilities and other 205,621 36,352
Contributions to defined benefit pension plan (48,480) (44,000)
----------- -----------
Net cash from (used in) operating activities 593,666 357,144
----------- -----------
INVESTING ACTIVITIES:
Capital expenditures (96,400) (96,417)
Proceeds from sale of property and equipment 9,862 16,676
Acquisitions, net of cash (362,062) (99,710)
----------- -----------
Net cash from (used in) investing activities (448,600) (179,451)
----------- -----------
FINANCING ACTIVITIES:
Increase (decrease) in debt 13,524 (21,538)
Cash dividends to stockholders (115,504) (109,436)
Purchase of treasury stock and proceeds from exercise of stock options 3,699 (9,096)
----------- -----------
Net cash from (used in) financing activities (98,281) (140,070)
----------- -----------
Effect of exchange rate changes on cash 33,671 23,521
Net cash from (used in) discontinued operations (3,901) 60,720
Net increase (decrease) in cash & equivalents 76,555 121,864
Cash & cash equivalents at beginning of period 293,824 171,960
----------- -----------
Cash & cash equivalents at end of period $ 370,379 $ 293,824
=========== ===========
Dover Corporation
RESTATED MARKET SEGMENT DATA FROM CONTINUING OPERATIONS
(unaudited) (in thousands, except per share figures)
OPERATIONAL PROFIT (LOSS) DDI DII DRI DTI DOVER
- ------------------------- ---------- ---------- -------- ----------- ----------
2003
First Qtr $ 31,238 $ 26,363 $ 32,486 $ 10,497 $ 100,584
Second Qtr 36,769 27,797 32,254 20,731 117,551
Third Qtr 30,653 30,908 37,193 29,794 128,548
Fourth Qtr 33,207 36,132 34,918 23,741 127,998
---------- ---------- -------- ----------- ----------
YTD - 2003 $ 131,867 $ 121,200 $136,851 $ 84,763 $ 474,681
---------- ---------- -------- ----------- ----------
2002
First Qtr $ 29,554 $ 39,413 $ 28,964 $ (6,933) $ 90,998
Second Qtr 38,855 36,320 32,459 3,030 110,664
Third Qtr 34,530 31,300 32,840 1,252 99,922
Fourth Qtr 24,515 30,514 30,117 (27,688) 57,458
---------- ---------- -------- ----------- ----------
YTD - 2002 $ 127,454 $ 137,547 $124,380 $ (30,339) $ 359,042
---------- ---------- -------- ----------- ----------
SALES DDI DII DRI DTI DOVER*
- ------------------------- ---------- ---------- -------- ----------- ----------
2003
First Qtr $ 276,171 $ 241,062 $223,106 $ 260,042 $ 998,373
Second Qtr 301,392 255,688 232,829 306,207 1,094,000
Third Qtr 288,478 264,637 242,528 329,313 1,122,909
Fourth Qtr 302,215 278,543 284,195 335,679 1,198,014
---------- ---------- -------- ----------- ----------
YTD - 2003 $1,168,256 $1,039,930 $982,658 $ 1,231,241 $4,413,296
---------- ---------- -------- ----------- ----------
2002
First Qtr $ 270,269 $ 254,982 $210,091 $ 228,846 $ 962,800
Second Qtr 294,724 261,378 225,356 272,682 1,052,715
Third Qtr 280,595 264,515 217,781 269,356 1,030,261
Fourth Qtr 270,188 253,839 219,670 265,588 1,007,817
---------- ---------- -------- ----------- ----------
YTD - 2002 $1,115,776 $1,034,714 $872,898 $ 1,036,472 $4,053,593
---------- ---------- -------- ----------- ----------
* Total continuing sales after intramarket eliminations.
Dover Corporation
RESTATED QUARTERLY DATA FROM CONTINUING OPERATIONS
(unaudited) (in thousands, except per share figures)
PER SHARE
NET NET ------------------------
QUARTER SALES EARNINGS BASIC DILUTED
- ------------ --------- --------- --------- ---------
2003
First $ 998,373 $ 57,688 $ 0.28 $ 0.28
Second 1,094,000 71,591 0.35 0.35
Third 1,122,909 75,235 0.37 0.37
Fourth 1,198,014 80,702 0.40 0.39
--------- --------- --------- ---------
YTD - 2003 $4,413,296 $ 285,216 $ 1.41 $ 1.40
--------- --------- --------- ---------
2002
First $ 962,800 $ 47,882 $ 0.24 $ 0.23
Second 1,052,715 64,200 0.32 0.32
Third 1,030,261 56,994 0.28 0.28
Fourth 1,007,817 38,770 0.19 0.19
--------- --------- --------- ---------
YTD - 2002 $4,053,593 $ 207,846 $ 1.02 $ 1.02
--------- --------- --------- ---------
Dover Corporation
RESTATED QUARTERLY DATA FROM DISCONTINUED OPERATIONS
(unaudited) (in thousands, except per share figures)
PER SHARE
NET NET ------------------------
QUARTER SALES EARNINGS (LOSS) BASIC DILUTED
- ------------ --------- --------------- --------- ----------
2003
First $ 36,601 $ 1,782 $ 0.01 $ 0.01
Second 35,281 1,191 0.01 0.01
Third 31,612 9,121 0.05 0.05
Fourth 42,615 (4,383) (0.02) (0.02)
--------- -------- --------- ----------
YTD - 2003 $ 146,109 $ 7,711 $ 0.04 $ 0.04
--------- -------- --------- ----------
2002
First $ 50,005 $ (2,766) $ (0.01) $ (0.01)
Second 48,669 (8,999) (0.04) (0.04)
Third 51,236 (552) 0.00 0.00
Fourth 47,487 (23,741) (0.12) (0.12)
--------- -------- --------- ----------
YTD - 2002 $ 197,397 $ (36,058) $ (0.18) $ (0.18)
--------- -------- --------- ----------
DOVER CORPORATION
QUARTERLY MARKET SEGMENT INFORMATION (1)
DOVER DIVERSIFIED
-----------------
2002 2003
1 QTR. 2 QTR. 3 QTR. 4 QTR. 1 QTR. 2 QTR. 3 QTR. 4 QTR.
-------- -------- -------- -------- -------- -------- -------- --------
Sales $270,269 $294,724 $280,595 $270,188 $276,171 $301,392 $288,478 $302,215
Segment Earnings 29,554 38,855 34,530 24,515 31,238 36,769 30,653 33,207
Bookings 278,660 278,591 260,983 264,082 278,884 291,608 287,872 302,648
Backlog 370,243 355,946 337,279 331,234 334,701 333,758 333,408 334,349
Book to Bill 1.03 0.95 0.93 0.98 1.01 0.97 1.00 1.00
Margin 10.9% 13.2% 12.3% 9.1% 11.3% 12.2% 10.6% 11.0%
DOVER INDUSTRIES *
------------------
2002 2003
1 QTR. 2 QTR. 3 QTR. 4 QTR. 1 QTR. 2 QTR. 3 QTR. 4 QTR.
-------- -------- -------- -------- -------- -------- -------- --------
Sales $254,982 $261,378 $264,515 $253,839 $241,062 $255,688 $264,637 $278,543
Segment Earnings 39,413 36,320 31,300 30,514 26,363 27,797 30,908 36,132
Bookings 244,645 271,509 258,352 221,046 257,844 254,927 272,101 320,174
Backlog 144,080 157,885 152,882 119,881 137,826 141,007 149,236 201,866
Book to Bill 0.96 1.04 0.98 0.87 1.07 1.00 1.03 1.15
Margin 15.5% 13.9% 11.8% 12.0% 10.9% 10.9% 11.7% 13.0%
DOVER RESOURCES *
-----------------
2002 2003
1 QTR. 2 QTR. 3 QTR. 4 QTR. 1 QTR. 2 QTR. 3 QTR. 4 QTR.
-------- -------- -------- -------- -------- -------- -------- --------
Sales $210,091 $225,356 $217,781 $219,670 $223,106 $232,829 $242,528 $284,195
Segment Earnings 28,964 32,459 32,840 30,117 32,486 32,254 37,193 34,918
Bookings 214,254 236,471 209,079 207,351 232,830 232,368 244,654 280,205
Backlog 77,161 89,974 81,492 70,876 80,068 81,744 84,445 104,362
Book to Bill 1.02 1.05 0.96 0.94 1.04 1.00 1.01 0.99
Margin 13.8% 14.4% 15.1% 13.7% 14.6% 13.9% 15.3% 12.3%
DOVER TECHNOLOGIES
------------------
2002 2003
1 QTR. 2 QTR. 3 QTR. 4 QTR. 1 QTR. 2 QTR. 3 QTR. 4 QTR.
---------- -------- -------- --------- -------- -------- -------- --------
Sales $ 228,846 $272,682 $269,356 $ 265,588 $260,042 $306,207 $329,313 $335,679
Segment Earnings (6,933) 3,030 1,252 (27,688) 10,497 20,731 29,794 23,741
Bookings 240,059 287,827 257,600 261,417 276,497 312,692 332,233 354,176
Backlog 119,074 138,213 128,365 127,752 146,415 157,821 158,146 182,427
Book to Bill 1.05 1.06 0.96 0.98 1.06 1.02 1.01 1.06
Margin -3.0% 1.1% 0.5% -10.4% 4.0% 6.8% 9.0% 7.1%
(1) Excludes discontinued operations.
* Segment information has been restated for the move of Texas Hydraulics from
Industries to Resources.
DOVER CORPORATION
DOVER TECHNOLOGIES -- QUARTERLY MARKET SEGMENT INFORMATION (1)
CBAT
----
2002 2003
1 QTR. 2 QTR. 3 QTR. 4 QTR. 1 QTR. 2 QTR. 3 QTR. 4 QTR.
--------- --------- --------- --------- -------- -------- -------- --------
Sales $ 124,797 $ 158,686 $ 162,585 $ 152,579 $148,883 $179,171 $204,425 $199,270
Segment Earnings (13,256) (10,175) (3,307) (28,984) 1,637 10,151 19,497 12,406
Bookings 138,745 175,830 152,485 148,463 160,495 181,804 206,146 212,478
Backlog 65,216 84,101 74,587 72,166 84,953 91,153 90,553 107,036
Book to Bill 1.11 1.11 0.94 0.97 1.08 1.01 1.01 1.07
Margin -10.6% -6.4% -2.0% -19.0% 1.1% 5.7% 9.5% 6.2%
SEC
---
2002 2003
1 QTR. 2 QTR. 3 QTR. 4 QTR. 1 QTR. 2 QTR. 3 QTR. 4 QTR.
--------- --------- --------- --------- -------- -------- -------- --------
Sales $ 53,755 $ 56,148 $ 45,786 $ 49,946 $ 50,315 $ 52,081 $ 51,969 $ 57,210
Segment Earnings (2,657) (1,139) (3,446) (4,828) 3,009 1,865 746 1,696
Bookings 51,304 53,999 47,916 46,036 53,856 51,850 55,048 60,391
Backlog 43,356 42,128 45,650 42,740 46,427 46,304 49,246 53,074
Book to Bill 0.95 0.96 1.05 0.92 1.07 1.00 1.06 1.06
Margin -4.9% -2.0% -7.5% -9.7% 6.0% 3.6% 1.4% 3.0%
(1) Excludes discontinued operations.