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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: May 29, 1998
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 53-0257888
(State of Incorporation) (I.R.S. Employer Identification No.)
280 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 922-1640
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
See Item 5.
ITEM 5. OTHER EVENTS.
a. On May 7, 1998, the Company issued a news release announcing its
intention to pursue a plan to spin off its elevator business ("Elevator Spin")
to Company stockholders as an independent publicly traded company, a copy of
which was filed as an exhibit to a report on Form 8-K dated May 7, 1998 which
report was filed with the Securities and Exchange Commission on May 8, 1998. Pro
forma Condensed Financial Information showing the effect of the Elevator Spin is
included in Item 7.
b. In connection with a proposed offering of notes and debentures by
the Company under the Registration Statement on Form S-3 which was declared
effective by the SEC on March 24, 1998 (the "Notes and Debentures Offering"),
the Company intends to note in the Prospectus (and in a supplement thereto)
relating to the Notes and Debentures Offering that the Company emphasizes growth
and strong internal cash flow. It has a long-standing and successful acquisition
program pursuant to which, from January 1, 1993 through December 31, 1997, the
Company made 60 acquisitions at a total acquisition cost of $1.375 billion.
These acquisitions have had a substantial impact on the increase in the
Company's sales and earnings since 1993. The Company's acquisition program
traditionally focused on acquiring new or stand-alone businesses. However, since
1993, increased emphasis has been placed on acquiring businesses which can be
added to existing operations. Approximately 35% of the $1.375 billion mentioned
above was spent on this type of acquisition. In 1997, the Company completed two
"stand-alone" and 15 "add-on" acquisitions at a total cost of about $261
million. In the three months ended March 31, 1998, the Company completed two
"stand-alone" acquisitions and three "add-on" acquisitions at a total cost of
$120 million. The Company has completed additional acquisitions since March 31,
1998. The Company has no target or budget for annual acquisition spending and is
constantly seeking businesses marked by growth, innovation, higher than average
profitability, and market leadership. Based on acquisitions completed, and
discussions in progress, the Company expects acquisition spending in 1998 will
exceed that of 1997 and is likely to exceed, possibly by a significant amount,
the previous record level of $323 million (in 1995). There can be no assurance,
however, that the Company will find this level of appropriate acquisition
opportunities and be able to acquire them on acceptable terms. The Company
believes that the total 1998 acquisition cash requirements will be funded from
internal cash flow, commercial paper backed by existing bank lines of credit,
the expected dividend from the Elevator Spin and the proposed Notes and
Debentures Offering. No assurances can be given that the proposed Notes and
Debentures Offering of debt securities will be consummated.
FORWARD LOOKING STATEMENTS
This Report on Form 8-K contains forward looking statements within the
meaning of the Securities Act of 1933 (as amended) and the Securities Exchange
Act of 1934 (as amended). Forward-looking statements are subject to inherent
uncertainties and risks, and could be affected by general industry and market
conditions and growth rates, and general domestic and international economic
conditions including interest rate and currency exchange rate fluctuations. In
light of these risks and uncertainties, actual events and results may vary
significantly from those included in or contemplated or implied by such
statements. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Pro forma Condensed Financial Information.
Pro forma Condensed Balance Sheet at March 31, 1998.
Pro forma Condensed Statement of Earnings for the three months ended
March 31, 1998.
Pro forma Condensed Statement of Earnings for the year ended
December 31, 1997.
Pro forma Condensed Notes to Financial Information.
DOVER CORPORATION
PRO FORMA CONDENSED FINANCIAL INFORMATION
The following presents unaudited pro forma condensed financial information of
the Company, as adjusted to give effect to the Elevator Spin as of the beginning
of the earliest period presented for statement of earnings purposes and as of
the end of the period presented for balance sheet purposes. The unaudited pro
forma condensed financial information assumes that Dover Elevator will borrow
$175 million from external sources and use it, together with excess cash on hand
to pay a dividend of $200,000 (see Note 1) and settle its intercompany
obligations, however, these financing arrangements are not finalized. The $175
million represents the mid-point in a 150-200 million range, which will occur
based on Dover Elevator's financial position at the spin-off date. The
historical financial information for Dover Elevator has been derived from the
historical financial statements of the Company and is intended only for
presentation of the Company's pro forma financial information. This data is
presented for illustrative purposes only and is not necessarily indicative of
the financial position or results of operations of the Company or Dover Elevator
which would have occurred had the spin-off actually been consummated as of such
dates, nor is this information indicative of the future financial position or
results of operations of the Company or Dover Elevator. The information set
forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
the Prospectus and the Consolidated Financial Statements and Notes thereto of
the Company incorporated herein by reference.
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DOVER CORPORATION
PRO FORMA CONDENSED BALANCE SHEET (UNAUDITED)
AT MARCH 31, 1998
(IN THOUSANDS)
Dover Dover Dover
Corporation Elevator Pro Forma Corporation
Historical Historical Adjustments Pro Forma
------------ ---------- ----------- ------------
Assets:
- -------
Current Assets:
Cash & cash equivalents $ 106,282 $ 28,353 $ -- $ 77,929
Marketable securities 24,267 -- 24,267
Receivables, net of allowance for doubtful accounts 804,726 200,567 604,159
Inventories 610,016 68,556 541,460
Prepaid expenses 65,293 5,487 59,806
---------- -------- --------- ----------
Total current assets 1,610,584 302,963 -- 1,307,621
---------- -------- --------- ----------
Property, plant & equipment (at cost) 1,311,111 140,157 1,170,954
Accumulated depreciation 724,410 85,522 638,888
---------- -------- --------- ----------
Net property, plant & equipment 586,701 54,635 -- 532,066
---------- -------- --------- ----------
Intangible assets, net of amortization 1,151,726 33,341 1,118,385
Other intangible assets 10,368 3,009 7,359
Deferred charges & other assets 38,815 2,254 36,561
---------- -------- --------- ----------
$3,398,194 $396,202 $ -- $3,001,992
========== ======== ========= ==========
Liabilities:
- ------------
Current Liabilities
Notes payable $ 508,530 $ 2,423 $(193,589)(1) $ 312,518
Current maturities of long-term debt 960 -- 960
Accounts payable 223,825 29,231 194,594
Accrued compensation & employee benefits 118,249 24,241 94,008
Accrued insurance 114,547 76,565 37,982
Other accrued expenses 237,108 51,041 186,067
Income taxes 45,096 (2,248) 47,344
---------- -------- --------- ----------
Total current liabilities 1,248,315 181,253 (193,589) 873,473
---------- -------- --------- ----------
Long-term debt 261,647 261,647
Receivables from Dover Corporation (1,411)
Deferred taxes 44,604 (8,701) 53,305
Deferred compensation 69,181 11,981 57,200
Stockholders' equity:
- ---------------------
Common stock 234,927 234,927
Subsidiary common stock 200
Additional paid-in surplus 7,972 7,972
Subsidiary additional paid-in surplus 2,425
Cumulative translation adjustments (39,239) (10,480) (28,759)
Unrealized holding gains (losses) 2,472 -- 2,472
---------- -------- --------- ----------
Accumulated other comprehensive earnings (36,767) (10,480) -- (26,287)
Retained earnings 1,772,155 (28,560)(2) 1,743,595
Subsidiary Retained earnings 220,935 200,000 (1)
Less: Treasury stock 203,840 -- 203,840
---------- -------- --------- ----------
Total stockholders' equity 1,774,447 213,080 171,440 1,756,367
---------- -------- --------- ----------
$3,398,194 $396,202 $ (22,149) $3,001,992
========== ======== ========= ==========
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DOVER CORPORATION
PRO FORMA CONDENSED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Dover Dover Dover
Corporation Elevator Pro Forma Corporation
Historical Historical Adjustments Pro Forma
Net sales $1,148,584 $218,575 $486 (3) $930,495
Cost of sales 752,450 154,565 486 (3) 598,371
---------- -------- ---- --------
Gross profit 396,134 64,010 -- 332,124
Selling and administrative expenses 253,408 38,905 214,503
---------- -------- ---- --------
Operating profit 142,726 25,105 -- 117,621
---------- -------- ---- --------
Other deductions (income):
Interest expense 11,926 87 11,839
Interest income (5,314) (134) (5,180)
Foreign exchange 1,499 420 1,079
All other, net (1,756) (412) (1,344)
---------- -------- ---- --------
Total 6,355 (39) -- 6,394
---------- -------- ---- --------
Earnings before taxes on earnings 136,371 25,144 -- 111,227
Federal & other taxes on earnings 46,376 8,992 37,384
---------- -------- ---- --------
Net earnings $ 89,995 $16,152 $ -- $ 73,843
========== ======== ==== ========
Net earnings per common share:
-Basic $ 0.40 $ 0.33
-Diluted $ 0.40 $ 0.33
Weighted average number or common shares
outstanding during the period:
-Basic 222,775 222,775
-Diluted 224,822 224,822
DOVER CORPORATION
PRO FORMA CONDENSED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Dover Dover Dover
Corporation Elevator Disposition of Pro Forma Corporation
Historical Historical(4) European Elevator(4) Adjustments Pro Forma
Net sales $4,547,656 $852,871 $ 27,386 $2,170 (3) $3,669,569
Cost of sales 2,975,920 613,735 22,087 2,170 (3) 2,342,268
---------- --------- -------- ------ ----------
Gross profit 1,571,736 239,136 5,299 -- 1,327,301
Selling and administrative expenses 959,067 146,544 4,729 807,794
---------- --------- -------- ------ ----------
Operating profit 612,669 92,592 570 -- 519,507
---------- --------- -------- ------ ----------
Other deductions (income):
Interest expense 46,888 331 394 46,163
Interest income (9,918) (731) (77) (9,110
Foreign exchange (4,566) 165 295 (5,026)
All other, net (36,571) 415 (32,577) (4,409)
---------- --------- -------- ------ ----------
Total (4,167) 180 (31,965) -- 27,618
---------- --------- -------- ------ ----------
Earnings before taxes on earnings 616,836 92,412 32,535 -- 491,889
Federal & other taxes on earnings 211,405 36,066 8,113 $ 167,226
---------- --------- -------- ------ ----------
Net earnings $ 405,431 $ 56,346 $ 24,422 $ -- $ 324,663
========== ========= ======== ====== ==========
Net earnings per common share:
-Basic $ 1.82 $ 1.45
-Diluted $ 1.79 $ 1.43
Weighted average number or common shares
outstanding during the period:
-Basic 223,181 223,181
-Diluted 226,815 226,815
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DOVER CORPORATION
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS)
1. - Represents the net result of a dividend received from Dover Elevator prior
to the Elevator Spin, settlement of an intercompany balance owed to Dover
Elevator, and payment of spin-off expenses.
The proceeds have been assumed to be utilized as follows: MARCH 31, 1998
Dividend declared by Dover Elevator $ 200,000
Less: settlement of intercompany balance owed to
Dover Elevator (1,411)
spin-off expenses (5,000)
---------
Net change in Notes payable $ 193,589
=========
2. - Represents a dividend to Dover Corporation stockholders' calculated as
follows:
Dover Corporation's equity in Dover Elevator
Subsidiary common stock $ 200
Subsidiary additional paid-in surplus 2,425
Subsidiary retained earnings 220,935
Dividend declared by Dover Elevator (200,000)
---------
Dover's remaining equity in Dover Elevator 23,560
Spin-off expenses 5,000
---------
$ 28,560
=========
3. - Intercompany sales between Dover Elevator and Dover Corporation previously
eliminated.
4. - Effective June 1997 Dover sold its European elevator operations. The
amounts reported in the disposition column include the results of
operations of the European elevator operations up to the sale date and
the gain on those sales and applicable taxes. The historical statement of
earnings of Dover Elevator for the year ended December 31, 1997 does not
include earnings attributable to operations of Dover Elevator which were
disposed of during 1997 because they will not be included in the Elevator
Spin.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DOVER CORPORATION
Date: May 29, 1998 /s/John F. McNiff
------------------------------------
John F. McNiff, Vice President
and Treasurer