DOV - Earnings call transcript Q1 2018

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Operator

Good morning and welcome to the Dover's First Quarter 2018 Earnings Conference Call.

Speaking today are Bob Livingston, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and CFO; and Paul Goldberg, Vice President of Investor Relations. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions] As a reminder, ladies and gentlemen, this conference call is being recorded and your participation implies consent to our recording of this call.

If you do not agree with these terms, please disconnect at this time. you. Thank like conference now to turn to would over the Mr. I Goldberg. Paul Mr. may Goldberg, ahead. you go

Paul Goldberg

Good to from Thanks, earnings and with operating morning Jennifer. welcome and performance, call on first follow begin and Brad financial call. XXXX Dover's will with and comments guidance. Bob our Dover's quarter Today's quarter first

the open then questions. will up for We call

law. as exclude reporting results supplement adjusted As amortization, adjusted for that after-tax EPS with can a A question Please adjustments a to yourself and EPS one associated forma We amortization. analysis we Dover supplement. courtesy, for separation code, following which uncertainties. to We XXX-XXX-XXXX. Form And and related related pro our you'll our that statements dovercorporation.com. certain included by as with Dover's for statements such facilitates remind acquisition guided or kindly investor is the factors be of this note call statement. website the be to obligation is acquisition any in telephone core portion forward-looking where on GAAP as this be basis today, reflecting supplement that, companies. our on publicly could referring release, to your of differ we can EPS rightsizing better we a access archived on update offers to attention and will providing believe to call easy caution those will reflects our in that results earnings months. audio in comments playback by website to subject website, And revise The your limit guidance cost costs, full direct and peer are XXXXXXX. to cause playback, aforementioned be undertake with investor get contain required Also, our When available to our understanding through Dover, and found accessing inherently like forward-looking forecasted ask We may everyone I'd that list measures, XX of presentation our except operating to their number current I'd everyone turn XX-K that replay Bob. the call reconciliation between are our This the any three before more our supply information you from results intended forward-looking of started, transparency like adjusted need the more found. comparability May and that to considerably for follow-up. to no also would be over well anticipated

Bob Livingston

Thanks call. Paul. and morning's us you conference Good this thank morning for joining for everyone

year-over-year for and factory cost done inflation segments. than quarter energy Our nice margin volume. and line service whereas temporary strength organic in teams lower were X% expected to revenue turned on comp upstream exchangers well job other was growth equipment particular, in four fluids and strong reflects With in reflecting businesses. this performance performances and delivered regarding organic inefficiencies first three in in A a and equipment. basis especially have improvement margin, fueling Refrigeration material In in Food broad of regard equipment pricing and XX generated businesses below Europe with points further our industrial performed our expectations margin some our industrial had steel. all printing through quarter, Retail energy. was markets. delivered we number retail refrigeration environmental Pumps, vehicle into in also improvement in a consolidation expectations growth conditions. heat lower market solutions, in to engineer south reflecting off increases especially Fluids slightly pushing quarters systems we of expect in ventures. based including their tough solid identification, was coming our continued refrigeration and We our offset and of We

in We during progress the the also on team will bookings had quarter. independent organic the segments made well and we second off as on become Engineer fully strong The quarter spin Xth company. Systems Fluids great these and a May move Apergy through positioning

we management joined him During on also us very the to see quarter, I'm the begin transition. Xst, announced Rich and put will stamp Rich Tobin on President and has I'm May excited CEO a company. his his pleased

happening cover the to moment company. a take several things across me Let other

continued digital our to developing offerings environmental and remote customers, business. have have us and productivity. help improved progress and actively to win monitoring fueling enabled significant IOT to new focused our We manage efforts, our solutions retail We're make and cost on solutions several

developing is Our nicely. pipeline

bolt-on deliver global take advantage have of the organic or target pro add And provided that had is companies energy guidance, either solid our We our areas forma macro excludes year. existing this to multiple as are environment most booking are are to which in which our business. businesses we upstream growth to complementary and in business. well market presence poised well We lastly, technology XXXX of positioned constructive

We through some the will expect of take back come our solid first now comments. revenue growth specifics will and you our I closing and and strong for EPS growth. then guidance, quarter Brad performance

Brad Cerepak

Thanks Bob. Good morning, everyone.

inclusive please of few you through there slides, upstream being the our energy businesses. As take presented I note next

segment. of our strong led Fluids, international and organic are reflect had can-shaping our the quarter, within broad business, out growth, retail several performance cost we bookings across in U.S, Europe our parts we year-over-year. also business. and initiatives, market year-over-year revenue adjusted growth in and the to including perspective, There efficiencies based including conditions improvement three Equipment, quarter; bookings mentioned, pharma, And Systems, and benefits Leverage pumps, bookings organic and China productivity based and fueling grew margin. highlights Bob with retail the and in than our and in markets a had industrial operating in Engineered in broad From revenue all weaker as refrigeration. in experienced of results well four issues segments. the growth geographic the this and temporary retail In combined availability fueling growth growth solid we heat As exchanger Refrigeration Food on within strong expected

go and Today, growth the through we deck. X revenue our impact from reflect cost, a of related investor includes XX basis point can quarter margin over organic X% was X% X% growth. a adjusted was these growth of associated Apergy, in of of X.XX. to Slide X% excluding by Engineered reported reconciliation announced in first strong overall. on increased from Systems starting XX% book-to-bill X% as X.XX supplement. result Apergy, excludes of the acquisitions. last A FX XX.X%, bookings details costs which as increased also a initiatives, Adjusted Let's provided increased acquisition results segment at X%, costs. no on related offsetting presentation EPS and dispositions. EPS $X.XX. organic separation with includes Fluids which and benefit. be right-sizing amortization was This previously Adjusted well This finished X% primarily margin driven improvement organic excluding year, X%. Bookings increased organic our found incremental results growth, Book-to-bill Partially

continued expected, free capital Overall, a are increase was with payments. capital. progress Our our on higher in and as flow slight cash we working compensation first working pleased quarter adjusted reflecting

XXX trailing in XX.X%, as was from Specifically XX working revenue percent of down a month points last basis capital year.

to Now let's turn X. Slide

were and driven broad-based Fluids Energy. international in retail and Pumps flat largely by was was growth refrigeration growth organic lower tough Systems offset X% both was Engineered mentioned by markets. in essentially Organic activity and E&P revenue and decrease industrial Refrigeration on comps in the retail came as fueling previously of soft spending X% capital U.S. which expected. Food primarily Equipment As combination

the on chart, a X% revenue while X%. dispositions benefit seen exchange As impacted was foreign

the Now, year Slide and representing XX% earnings organically, X% a material adjusted up cost through the basis improvement. ability to increasing pricing. conversion volume mitigate prior on results to broad-based X. was growth. reflect margin revenue was turning Adjusted over XXX point Engineered Systems solid These increased reflecting XX.X%, and

Our based Identification Industrial Waste print - in Book-to-bill very businesses. and reflecting coding the printing Handling organically, platform X% and increased marking very and X.XX increased overall. XX% other and and strong X.XX strong a overall, X.XX both of organic solid Bookings growth solid reflects growth including continued increased growth In was industrials, businesses. Organic revenue activity Printing strong and by identification, platform, for in digital segment. X%. shipments driven activity broad the and for continued across X% revenue bookings organically, across

largely the Of offset a basis. strong Slide earnings number Organic growth fueling. growth. fueling points bookings including FX. XX.X%. revenue including on X.XX. no, consolidation a will largely acquisition organic supply second revenue in factory was shortages chain E&P X%, increased market This solid completed improve temporary X%, Organic growth driven Adjusted grew including is sequential U.S. pump reflects Now substantially Fluids volume activity. reflecting increased by X% activity on used inefficiencies X. Book-to-bill components was to and and XX volume basis quarter improve fueling performance broad on a margin of margin increased by pharma retail in was in XX% growth. strong Adjusted resulting of and X% based. offset overall, was from as retail principally productivity Bookings international retail earnings flat, X% by

was well whereas refrigeration lower equipment. new quarter to expected our we by volume. strong contracted from retail retail energy efficiency DOV The X%. to Last front impact softness that turn bill is the in XX% year regulations. Earnings businesses revenue capital knew the heat timing decreased Now comps and largely in than of decline X.XX. in can-shaping prior Bookings X, very food let in and exchanger in spending decreased year activity can-shaping wouldn't Slide and seasonally performed driven points large this the order of declined weaker XX% organically in repeat organically refrigeration us of first largely reflecting in XX tough reflected Book basis quarter. We refrigeration. equipment market XXXX, volume saw the

continued count Now finished revenue activity in both improved bill on reflecting and completion Bookings solid U.S Slide winch XX% business. segment increased at X, and Book and increased to last industrial year. growth includes X.XX. well significantly in rig over were year-over-year. margin Earnings energies it our to XX% results up organic

Apergy a growth. As Bob quarter business organic our with strong mentioned, had XX%

$X Going sizing included million. expense excluding separation cost these corporate on X, was first Interest Slide $XX expense our to cost, $XX overview the million was quarter million $XX and right corporate expenses million. cost of

XX.X% our benefits. $XX was repurchase discrete rate billion completed previously quarter share repurchases with the expectations as part excluding announced tax when million In we of line in plan. first first quarter, $X Our of

XX, Our cost Further is and updated forma right basis, discussed separation related guidance acquisition which pro as Now moving and updated sizing last amortization year. for Slide to full a guidance? now XXXX adjusting incurred. for the presented shows excludes as quarter, we're on adjusted on our cost updated guidance Apergy

of part energy be reported Winch was within our also was which segment in reported which our updated bearing of Lastly, And guidance be Tulsa the and compression part Engineered within fluids. will will energy Systems.

increase the a X% add summary, XXXX we adjusted is expect expected Further, to be X%. approximately growth impact. total to to to All to improve to forecast Moving basis X%. Acquisition expect FX segments and XXXX segment have $X.XX the we should about revenue are about XX.X% to are full XX%. organically. organic over year adjusted of expected this In we X% expected add Within revenue will at EPS to points expected $X.XX. guide, grow XX Dispositions midpoint. to X%

that, quarter Apergy call With of I approximately to for Further the the Bob, costs some comments. this exclude second over over XXXX at guidance final an guidance increase back to turn will the XX% represents midpoint. separation. Our related

Bob Livingston

Brad. Thanks

bookings Going to and bill Fluids forward in book forecast. Engineered Systems revenue are supports strong strong and organic our the

waste marking In and printing Fluids, expected we digital to growth and another Additionally, pumps well. handling to expect very in pharma businesses. continue our year perform of we and strong coding,

and and bearings under expect growth we organic retail In to tough regard Fluids the will can-shaping in quarter, markets. Equipment, up second we equipment, and exchangers quarter while performance softer to year they step to Refrigeration and With ship overall improve. be as comps and both activity. shipments impacted the in several also strong will to refrigeration Systems second solid continued in deliver and related order remodel to expect customers heat improve year the last refrigeration strong fueling Retail We books. back sequentially to half as be retail solid the continue Food Engineered strong and compression expect of by

and to refrigeration would expect on sequential especially equipment in a improved segments. I I Dover also future. been Dover's just continued as serve to is success closing, fluids at segments have years to Dover like employee our nine it basis that pleasure well XXXX. and success. three all past food wish in positioned We In that believe contributing want and all our CEO I well honor see am to sure great these margin that has you and say for personally I I a and you'll every thank to the

Now questions. some do Paul let's

Paul Goldberg

we Thanks queue up, questions to we'll Bob, in right to analysts limit take handle that want question everybody that to one I if yourself can a remind the able before follow XX be now. just are better you with

Jennifer So question. the with take let's first that

Operator

question come first will Jeff Vertical Your Research. with from Sprague

Jeff Sprague

Thank the you, guy that but congrats we're things, good at Rich and his you world know and we're it. is safe the stamp your given to the all good today retirement views I morning conforms on today everyone. getting it of over also? speak enjoy you your to of kind this made Hey, his Board want he's for Bob don't putting assume outlook comment run; for appreciate getting that that a him the years on help that the much about on thanks

Bob Livingston

inherent He can not the guide is Jeff. providing you of that, today guarantee I

the visibility quarter. we quarter. I say say would think with shared the third respect for the would them second with forecast strong guide I have systems you also engineered have respect we reflects in with very the today to to the And I and

with we improvements comments order were fluids in quarter, especially in the the raise the It don't a as bit to guidance I And with thing activity didn't Rich this --I want it's and it in pleased the necessary we last With as pretty the think quarter, retail Jeff very-very is comments, segment this going our board margin do today. would strong we would shared tell in confidence on be in on see the you, quarter, to fueling outlook the being but year. are through because engineered that have would we both the I and build will in are prepared to fourth in this we here platform first move sequential as I revenue coming I think is and conservative through systems. be think

activity for if strong the to change Rich respect October to I guidance our there's I'm any with that call. to to about and on July in think going to Brad going the you be speak leave and

Jeff Sprague

then that could for refrigeration a the to grocers and I and bit wonder price among just lot to bit little sort in capital of in they on in obviously want of spend Do cost drill more a channel? there's you then see we influenced particular you in provide particular up perhaps you're thing. that there later uncertainty understood a Can the spend they Great, CapEx just on the is margins if a moment freeing and want and more what refrigeration any the from in year the quarter? spend detail dynamics little hearing what

Bob Livingston

one. deal first let me with So the

activity very-very by as second in half result is driven going construction. name have year the customers, be customers capital enter have having conversations tell we that we're to of well. in a will I sharing new not the spending couple half Jeff confidence the with much customers And But think see year. second books of as order without we the spending that the new of a that will I it store is increased the we of you remodel the growing and a of there input

what I We on it refrigeration. are just as I all above inflation, and of response year outlook labeled important as tailwind I'll refrigeration million now of we you we I we Jeff. the we pricing, evaporated, the it's with has give So for cost thought cost tailwind right have for XXXX - and of Dover. pretty good feel the give what for we think thought about material pricing pricing $XX with but a entered that Material some

were we larger users right increases would the steel that pricing been And feel now start inflation during orders I our has say $XX $XX implemented taking million price year have pushing quarter, million think But have have and that this we of our especially last across I million our now much many we year much increases on this guide border in quicker throughout get them. of increases than covering are have better our dissipated. year we and I'd yes. the of price prices last assumes the on the the in through got and that new call we companies year, first like forecast the January the $XX cost material a with did than number

Operator

Julian is Mitchell question next from Barclays. with Your

Julian Mitchell

I wish the would And and Bob all just you. like Thank best. congratulations you

looking about and been sort year, the EPS buyback slide spend in of On the had that wondered number just spending any spin dollar dividend if tally what from this $X.XX in coming that incremental on this talk just at all buybacks repurchase to the you aspiration the the of the appendix, year? too, share there change of

Bob Livingston

a provide you and Well, response can bit on or comment I'll detail. headline Brad give that, more a

activity. I nickel our The nickel is actually the It the to on activity our with not allocated to activity. That Julian, allocated, any occurs. fully repurchases make could as from Board will can will is on an as following share to guide to assume it does does be and conservative of tell Rich we balance on the repurchases make share to to during said assume repurchase dividend those the I respect guide increase we with feathered that early spin guide to respect I'll the to repurchase in Apergy change So the in share XXXX. the Brad Apergy. repurchases; sort respect our But to spin how year share decision be occur you with repurchase leave the it ASR of XXX% the will in conservative myself. share of repeat not shares and nickel final more their received

Brad Cerepak

So, year. let or Remember different the me facts there, XXX.X shares couple into $XXX actually I see the is forward spending of that But could timing where about of for range million opening into weighted XXX just so power of shares, nickel lots those XXXX in add guess up on ways our - I forward XXX type assuming XXX, point. of of to it be done Bob's mean that XXX, XXXX, forecast we comes a the is to share the average million million. goes

So carryover into you have XXXX. this benefit going

Julian Mitchell

Very up follow But helpful, then cost, be thank $XXX excluding corporate revenue run that that revenue feel now. think down number the go you. rate mostly stranded you about my of Apergy I And because how coming the guidance should remainco away were and when then has guess at gone the are sort what guess million $X that's base just think in million? Apergy guess that would base? around be the stranded should do lower for costs of about corporate I be the up be based should that also than of cost some costs would smaller the much you that I

Bob Livingston

why spin. did the know of ready we sizings and Well, that's you call last rightsizing, it Apergy right we getting one the as year, for

that of building it. this go through away corporate. that details will the but on to shown believe it $XXX the say But We're will million lot some go work a million. we're You're Apergy correct instance we some of was guide we details it. been that that infrastructure doesn't of on Little, XXXX it here almost previous got active top away. in $X now is of a I have it we've Of for of working million million cost into $XXX fixed would that of our $X of stranded one I go through away

I We the bit expect and down to cost continue continue to XXXX. come work would into to number corporate it down expect to a

Operator

America Andrew Merrill is Lynch. question Obin Bank with next of Your from

Andrew Obin

on thanks and the good retirement work And hard years. Bob congratulations your morning. for Yes, over the

IT. one given any you what all macro drill businesses, by geography signs orders specific wanted into both businesses, question seeing you a one provide the Just drill if to geography? you down any detail specifically of Could just to on end-markets on of market or more specific the and of printing seeing on the in and concerns slowdown and sales one are

Bob Livingston

in the were first though I and Okay. IT I with in I the would There have extremely me, activity detail order growth is order no. detail was that rates raise first the And don't do concerns, the printing don't rates the the have globe. any activity nothing answer know in specific unusual geographic on know quarter that numbers. the quarter I balanced around for but order

book the of activity solid no we We at evidence business. build quarter. double-digit order Markem-Imaje fairly the just opposite at sign; another And the our have no print would actually in question XXXX growth seen speak a order that digital and are rate our booking through your in did

Andrew Obin

be And to point for just but flat quarter given at to in Or of do saying with the to get sort much substantial organic segment year. actually a orders, in the has you a orders first pickup follow the up feel forecast? of on you is weakness there this How the to the refrigeration visibility you pickup? and have are orders for comfortable pickup the seeing you this order enough uncertainty on revenues that basically about fairly food equipment question, are

Bob Livingston

changes in were guys significantly there we factories. in, think dealing as this XXXX this times nine to in speak would tell so half months we the in one over Anthony. were you the say customers first here number our and PHOENIX making I and are six shorter our I the lead months within me let's is that than Well retail of and maybe help that refrigeration, it business, recognize many XXXX would last I was Hill our what

well this nature cycle our the it's by today. customers So business of recognized very is short

new respect they or those be mean for those have yet, strong customers with I been and awarded. signed we're the awards hinted to not are that I We waiting earlier half in from to very have anticipated not input spending to referenced second the

Andrew Obin

your well Fantastic much Bob very enjoy and you thank deserved. retirement

Operator

Your next is question JP with Steve Morgan. from Tusa

Steve Tusa

Congratulations morning, Livingston. congrats guys, well. to Hey, Mr. good as

on just expect strong XQ with good So perhaps XQ and not and than as XQ. a obviously because quarter very this refrigeration first business was the it's in XQ historically stronger been half performance of we base a back XQ three maybe - a a mentioned expect about of in should should sub-seasonal bit just in in bit we deliveries, you kind we XQ? is as before XQ. but seasonal the being seasonal in Should think book-to-bill all How better

Bob Livingston

you the Yes quarters the year stronger see will is relative a quarter I other think the this third historically that seasonal year third have much of we quarter to shown. three that

If with being second behind quarter, quarter quarter that recently. quarter, third different part the we We now the back the see period I shipment expect we the refrigeration strong XXXX. the being trailing the that for the June to but look this again September little the going quarter. in fourth has retail And been organic history, bit in many show been I'm awards right typically business new are issue. booked for years do quarter through strongest have mean of you being to a second And the the see in strongest reference third growth business.

Steve Tusa

for specifically Refrigeration? you've but far expect for would not the And I'm just that margin that color as you on Right, okay. as play how given out sure maybe for some year, the segment, its guidance

Bob Livingston

don't by I it have quarter Steve. can't, I Well,

Steve Tusa

the for just color just year. the no, No, year, for

Bob Livingston

seating XXX for year. margin of we're the improvement bps think I

Steve Tusa

start first the quarter down? with being Even Okay.

Bob Livingston

Even first with start. the quarter

Operator

Joe Ritchie Your with next Goldman question is Sachs. from

Joe Ritchie

Thanks congratulations and Bob.

Steve touching maybe there question for So second on just on refrigeration.

so were the expecting but are like have sure make got sounds to year? this like right. lot I've a that we're or want The I this So awards down this booked, it been quarter booking just

Bob Livingston

No, no, wins. I customer referenced two new

But they contracts know but house. of the half do in we We releases will want be those the have shipped, there shipped and have product actually second the in the when we year. don't yet

Joe Ritchie

will So in or the awards backlog your XQ? booked in XQ be sometime then

Bob Livingston

the into balance it in be that some yes. I and of would flowing QX, expect to of QX

Joe Ritchie

a points That's talking it. the guys on made expansion. I then may comment you refrigeration last And have Got basis specifically? on about Are good clarification. you margin missed XXX

Bob Livingston

segment. The

Joe Ritchie

segment. The

Bob Livingston

Yes.

Joe Ritchie

XQ? start to Okay. perspective And in Acadian that's from pick up

Bob Livingston

QX.

Joe Ritchie

EMV, then one question Okay, great. on softness quarter. this And saw you some

One of it as bit of a little competitors to forward move to the well. night talk about that last Maybe how year? large your it's about rest you for talked expect the

Bob Livingston

speaking activity than have here think was is EMV incorrectly the differ our first in but true. Well, don't what I Brad, I'm expected you any we and if to quarter statement clarify my

Brad Cerepak

true. That's

Bob Livingston

if actually It interesting the commercial the first is new retail first stronger see rates quarter quarter board of that get it EMV we it launches to going is then you the or did in here are we the is anticipated. China and in quarter, stronger the dispensers. into in and normal most for activity, commercial we notably in actually order new had like it. were especially board booking referring India are I rate board, And had We first in across seeing retail for increases the the fueling. for see across I'm just Asia, we're Europe, but order not to the market. also our U.S. The rates Across

for - the So, in EMV U.S. are a dispenser confidence going fourth dispenser, so the selling especially would completed, just as we or quarter our in even quarter that here new the the are growing strong that EMV are be also sites the orders we second for kits. year increased is some we of into that purchase we the get we're half saw activity. see of to we year, we of know in as last the But and of more getting was absent, applications especially first that

very going order in the we're first we we've growing that not quarter U.S. activity there to globally. with pleased - retail had confidence in fueling actually quite and in is here year So, solid just the but we're have our a

Operator

Deane Your RBC from Capital is next question with Markets. Dray

Deane Dray

I Hey, your timed to farewell did would Bob at thought appearance one include you, have morning not have last happen? would you Thank how everyone. good does that EPG, that

Bob Livingston

I made a mistake.

Deane Dray

a perspective try Could so consolidation you second supply we'll in in on the happened toast in just fluids Europe, us what about it will be issues chain second disruptions, completed and we in still the talk will be you is in the your quarter, it give Alright, quarter? disrupted factory absence. just

Bob Livingston

to So, Segment, Deane, fluid it you're it's is the specific be But within more retail correct. within fueling. actually

Scotland factory I right, I So which Wayne, plan move completed completed production the May, Am actually Tokheim the believe in was Brad? think process gets in the we Wayne it we the into as are that gets two the Tokheim-- part Tokheim activity factory factory. Its And Swedish I the in with it from and integration of believe moving factory is Dundee, weeks. actually which of to was and two weeks. I incur costs overtime in our some the didn't four And it just chain, March have that supply was February we some it - and to we components really and and respect all in that and don't February. restricted January move four we parts did additional with supply call had I let's With it forecast. call remember would interruption in frankly the

quarter. fairly and we I first them think two but this exited much the resolved behind a time of were

quarter. And quarter. time significant as improvement second in The now other in some going on second for resolved segment but are are be to think right see non-issue two will I exit the and margins Deane we we being stone the you're a this this a fairly

Deane Dray

these can handling They talk Got on other your it of follow-up, the for and base much those businesses you broad then get about be moment businesses industrial? but about if time, comment in a that'll here growth beyond the the within business, just touch don't maybe systems usually for having helpful? highlighted you could engineered waste industrial

Bob Livingston

And the material was platform. first broad that will first based did the but growth vehicle out the again in industrial across the and outstanding they it it industrial will it each I saw I of was broad script mention called That forward solid platform I quarter and was in based; I handling, businesses going said which you services the in that very an ventures be was job. engineered led most, did Well rates that Company growth the we quarter. systems, tell think at in

Operator

is Kaplowitz Citigroup. question next Your from with Andrew

Andrew Kaplowitz

luck. Hey, good congratulations and guys. morning, good Bob

Brad Cerepak

am because two I leaving have you Okay, at X:XX. minutes,

Andrew Kaplowitz

then. quick be I'll Okay,

change as marginal a in conversion. to XX% terms late the in but you know guidance, year little free last about talk you can Bob of to cash from So, XX% in came cash XX% just

just into the year? and read So at start a of the maybe being more movement around you capital or little sort bit conservative of working could

Bob Livingston

systems first of some increased and and capital but engineered working you every percentage in Brad increase in have this, revenue Working it's indicated quarter the did dollar to a rates. year. through in metric, and and the quarter, had inventory pretty to detail that strongly, as fluids again first capital first as to the as strong the week, order working the some capital in in increase rates this on of really and absolute response some see working dollar growth working I we a working rates to every came quarter. result rates. the you're quarter, But I balance again of as - will amount totally look capital think every connected absolute down. are continue growth the was growth capital We of and a down I give capital an But going month,

add that? clarify You to or want to

Brad Cerepak

years that Apergy XX:XX. last just clarify I I'll first add Not looked but both would and negative; X%, when call we And the points, Dover our about in what nothing I'll slightly quarter, same few you always in levels meaning X%. last over same reiterate, about in there. for year, expected if low about at, Again splits between year companies, With that's look came the a respect we again, about at as splits bit to we quarter, little we're perhaps the go first characterize first traditionally, quarter, forward XX% as a I'd to little early single-digits reasonable we've forward unusual at think five we so somewhat our on number basis Apergy. seen trends, bit ex we to a now, but, going conservative now called Dover little it's say days, so, negative

So, good we feel a for like guide it's us.

Andrew Kaplowitz

he business? you if that the gets significant obviously, might there come the in are in market in expect, into seat Okay, the but, view when which that's actions a helpful if color. as - do you you can restructuring And that back more can weakness take it any more persist, refrigeration, have different doesn't then

Bob Livingston

of PHOENIX about I and within was but employment and sizing Hill was, we were one, March the stopped. in haven't XXX remember taken, the positions month don't I it gosh I'd I a I don't right March count, remember first Anthony. I it coming number tell number the in Well, know steps you think reduced think were the that April, that additional but there early of and into part April.

for lot I factories a of the has bit the work and the going think team I pop the reducing out margins the last business little you this about to, couple really a from the volume at and the Anthony job reflect continue in the of team business has last you're in very of tell will say that done. year, Relaying Hill we that done half years. the here the confidence, and have good think, positive business very will So see of I to leadership second couple I of PHOENIX we well, factories, growth this actually over years. I done they've over feel all footprint, manage work

Operator

is question with next UBS. from Your Steve Winoker

Steve Winoker

good and congrats Bob. your on Thanks retirement morning, and

equipment sense think cetera a about lot still priority that So it? at a how very of quarter, secondly, deals whether a there, hold pipeline give in just guess of a others transition us forward, space that the is active recent food on closed M&A do et just extend bit questions And have for then what richness is been the now, of the I seen spoke little the given you suppose to couple about I in one is Middleby, going we've a right that bit leadership you and all?

Bob Livingston

richness. something, that didn't you correct me used let the Well, use word I word.

at significant from you pipeline of I think active, quarters or last they're call to with opportunities our to I am nothing the couple any on last more I And fairly especially current topic the three transition and over over the think months you'll is these sure. time, couple in that of I it myself respect I deals pursuit they're bolt-on all would mid-size hear is few this announced slowdown the the absent and weeks Rich fairly, or Rich. next our all tell has with and them small deals, we've as large

Steve Winoker

margins, in that you've timing on and basis your kind those margin those points XXX long-term achievability kind but food bit Okay. map of sense of place, refrigeration talked fluid the to of it of Fair that a comments. just now, targets little equipment. about And and now? in XXX to for is What on road the

Bob Livingston

I engineered think to in a achieve in and good we're in position fluids. targets those systems

As I see I second commented of need first you'll here little volume the in of earlier see with half team we leadership the margins as respect the this and well. pickup are achievable over year, a think to bit to refrigeration, have those half

Operator

is Capital Your next question Markets. from Graham Scott BMO with

Scott Graham

else, targets Those question morning everyone - and think XXXX a good prefaced congratulations of enjoy revisit was and really re-echo right? term retirement. that and your I'm because are characterization. luck go Hi, with a and to just I'd like Bob, back good it I last long

Bob Livingston

Correct.

Scott Graham

can XXXX? that get feel do second refrigeration in the targets you to with half So strong you your

Bob Livingston

year. referring half another second strong of We're have the still XXXX, to we

Scott Graham

there see that to at hit anything ask but question just broader it and is the directly you like guess won't there I right in now those is of sounds end least low targets my but where not you Right, XXXX?

Bob Livingston

feel of this very bow-end No, no. the target. with confident I

Brad Cerepak

a want set want a second. have something make about to back; basis that back here become forma the I you inject want up to to I we're I I maybe know a will maybe just here for lot go on something here. But don't Yes. - XXXX half pro talking because I sure

Bob Livingston

yet. Not

Brad Cerepak

X-K see we're year give on have all But Not we're did going basis XXXX that you restated our half yet, year no about you provide way - basis. a The think year, the but setting data up the the an This of guiding It's comparable after was I'm the half we in setting and today up, when adjusted the was you'll on right But you'll actually this going spin that XX% now. our forma to information. to and we'll XXXX delta way, an it back to guide to $X.XX first see XX%. pro you different. the file

Bob Livingston

identical. actually It's

Brad Cerepak

when said about on will the builds been going second talking a is I'm the well good so and matching your in QX bookings half, piece big awesome thing, heat a market. with and that half exchange and that way back we and this we equipment an food some same challenging won which better. about yes, identical half equipment's DR, business about feel Middleby, up we we you think food It's into have QX have really FE the of the business trajectory make expect business business, By we first to even year.

last data And so would just this about we out. The coming good I feel you that. say piece again it's have

is And way Our be. pace quarter on look first want ex-Apergy basis $X.XX where forma on quarter, we first we're versus our the right the to a $X.XX. pro will

Our changed. changed; ex guide guide hasn't paused hasn't Apergy Dover for our

X% up on the is core Our revenue growth side.

Our we bit a a of in segment a talked There's about, we margin that expectation offset changed. little little basis of corporate a guide hasn't of as bit in shares. bit And due savings and to paid the And up. guide benefit first by a quarter. down on change pro debt forma of tax on how million sets guide little our interest the that's $XXX

here feels the So really is the of sitting we as today fundamentally with first shift the quarter to And us. the within business good different mix we're the trajectory segments. expected

Bob Livingston

And I echo strongly. that

Scott Graham

is obviously complex you're was metals here that assume $XX a positive correctly of your that Brad which price to you so that was million certain I first and remember thanks little and I out inflation if the understand I where price need want left commodities bit cost significant. just maybe that $X about helpful prices said increasing triangulate go quarter usually million million, you. maybe there back was I $XX to try to pretty cost do because

price saying are positive an you today? that basis million are $X So cost you annualized on

Bob Livingston

inflation, further yes. without Yes,

Scott Graham

will increases make price then in So cost your price you XXXX? positive

Bob Livingston

Slightly, slightly.

Scott Graham

that's Very I good, thanks, had. all

Brad Cerepak

see still where impacts we the Yes, and we that's as at but marginally said, yes, ahead margin of on curve rate this ourselves Again, the bit this a positive got point. price Bob again.

Bob Livingston

position increases, than weren't was I what they the quarters. are with the to exist it we for on here day, across pricing the or but the all fairly first the the companies same their with say it all board and quarter third done last pursue year. Dover, second this we we experienced during feel in respect comfortable And price different would as today

Scott Graham

Very there good. your to good responses I luck comprehensive and you, again appreciate Bob.

Operator

Susquehanna. Your final Robert is with question Barry from

Robert Barry

Good to morning, taking also Bob. Good Thanks guys. the congrats echoing I everyone. conclude question. Hey, with luck. the for will

the fueling was a on Just in few point, that that how a much say also you follow-ups because you the can retail revenue ship? headwind And you at couldn't in quarter? this cost inefficiencies

Bob Livingston

some slight a revenue wasn't big cost I may cause don't revenue headwind. on was or a deal additional It $X million, and been million, changer. some It want have to of overtime. but $X it make It have I additional $X freight a it been. did us express mean the game may to million incur

Robert Barry

is Brad think feeling show been end - you there is and traction? that for something a little challenging finally good to Equipment do that said Got up business know that's of Food those it. Got kind about starting particularly some it. And market up about following well build Middleby. I on lines while earlier

Bob Livingston

I spotty. would it's say

last year, it's for books. I part are within special or I think it's but tell they And all - looking also say the on But the of business broad based. the some We're buying not actually with we customers they at projects were see special orders. year. I this all customers some buying that you that would growth more around would and

the But house. growth rate this second fairly in We half in we of the part year. in have the the a see of orders good business

Robert Barry

it. Got

new big from one or of you savings at to guy past customers about this up Just investments hearing anything question. using rules picture Are step point? depreciation kind last

Bob Livingston

to difficult changes. taxable pin We as And to order that asking internally the in keep question difficult. It's it's well.

Robert Barry

it. Got

clear not that So it's yet helping?

Bob Livingston

Correct

Operator

like That closing does the remarks. period. Thank turn for back I you. would now Mr. our conclude his over to question-and-answer to Goldberg call

Paul Goldberg

Yes.

next forward you Thanks call. Bye. in with you thank again And interest. our we continued again conference this concludes for Dover. we look that, interest So quarter. to your With your speaking for

Operator

Call. does Thank you, conclude Dover today's and gentlemen. First Quarter This ladies Earnings XXXX Conference

your day. this disconnect have wonderful And now lines at may time. You a

Dover (DOV) 27 Apr 182018 Q1 Earnings call transcript