DOV - Earnings call transcript Q1 2020

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Andrey Galiuk

Hello. Good morning. And welcome to Dover's First Quarter 2020 Earnings Conference Call.

Speaking today will be Richard Tobin, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and Chief Financial Officer; and myself Andrey Galiuk, Vice President of Corporate Development and Investor Relations. [Operator Instructions] As a reminder, this conference call is being recorded and participation implies consent on recording of this call.

available this through on call for months. be audio XX our will three of portion will call for May playback and website This be archived

measures and presentation and which are website. GAAP Dover investor our materials, reconciliations on non-GAAP in our information and provides adjusted are available included supplement between

anticipated our subject operations, that on our including risks to the any liquidity of undertake Covid-XX We obligation remind factors referring We first today could as flow. forward-looking quarter to everyone Form contain and want a no or revise law. everyone by publicly We to employees, forward-looking Form except in to by those uncertainties may global customer economy XX-Q statements, that and for to the any in XX-K cash be and and the comments required results Dover forward-looking cause statement. business, of their our statements suppliers, list that our update are caution of analysis for from impact differ guided

I With Rich to Tobin. this over call turn will that,

Richard Tobin

Good everyone. Andre. Thanks morning,

we take the And urgency to through partners, going and are with get And of resolve we not read environment. us. employees, these of some where magnitude sheet balance straight to I mentioned the communities and our and extremely from cost to sense local responsibility with ourselves where this going advice that demand present go through slide a times am working and where to challenging shareholders we what quarter lost was customers, to challenges are operate. We next are market the are structure and we a on and our what not we briskly actions solid perspective. first sage operations, taking to adapt

the role as therapy projects removal as outbreak many critical our fighting to directly aimed our many a retail, into waste development. others. and and functions commercial ventilator hospital cleaning, fueling, like biopharmaceutical businesses well masks, packaging supply as at food supplier bed and such We as Moreover, societal understand production

of Let's the are rearview results assured looking Slide the of given few pace first solid in the that QX. change weeks; recognized complacency X the into go summary despite mirror to rest we have the quarter given of these last We results. the results challenging into quick progressively zero outlook QX

in to in To more remain largely initiative in headwinds which with QX, the largely Italy work coupled beginning businesses Covid-XX the ability than the sum our and we cost quarter. operational, up of structure China and offset our did our impacted productivity

waste in grow in strong the in volume containment backlog, cost margins up a pricing to has at sales X% nearly products, as Let's up segment. down. Europe adjusted the EBIT business response and facilities. X lower result points as for productivity operational look were Xx interruptions auto go Slide briefly segment slowed exposed in to continue handling Waste declined demand China business aftermarket businesses also well based experienced vehicle basis, higher XXX basis Engineer organic a in actions their The on performance. digital year-over-year to and as sales

saw chain declined Asia and out America due production for deferrals. North to whereas related robust Moving fueling solution EMV Europe and compliance the by activity supply solutions and driven project Covid demand in interruptions

to as as the geographic and basis favorable of Additionally, well as a was points in cost local XXX wash mandates. improvement US shut in product mix, and segment manufacturing delivered down our pricing. due controls Segment and productivity government vehicle and March actions result

and all business In offset volumes Asia had surge impact crisis and consumer additions of digital sudden declined which by in exasperated textile QX? brunt as and declined consumables of in only operations printing ID our of organically the of and offset Imaging was containment are bore the points goods. the the region significant the mixed for which March, the Our quarter. in Margin as in cost quarter the Marketing strong This consumables XX on of Covid-XX. drop to our Lombardy in was basis favorable apparel impact the coding the approximately in our printing actions X% demand segment and volume markets. further flat of production a due significant business. in the Italy global textile difficult largely challenging digital

Strong conditions another and systems improvement of organically. in and well polymer hygienic biopharma containment and impact as Covid than offset oil solutions performance and downstream slowing components translation. FX pumps delivered and in pumps market segment The complex. industrial plastic and and top-line strong margin Process Pumps declined as X% cost in and well our actions, more as as negative inflation offsetting restructuring quarter of gas driven by largely pricing

business result and organic weaker postpone both And food around SWEP of the related due declined in Covid Covid to margin production by actions driven Europe heat volume reduction primarily Core retail demand and finally, food as than in as less declined X% grocers to to the refrigerators projects quarter. in a in curtailments service equipment, later began food equipment, Segment declined in governmental world. sales the food exchangers X% and equipment. combat as remodel for Asia

to it there From on pass Brad. I'll

Brad Cerepak

Rich. right. All Thanks

X. top Slide bridge. Let is revenue me go On the to

by world. geography Performance was by also currencies. and by FX Chinese reducing will similarly FX up or Swedish Brazilian, coronavirus headwind the negatively appreciating the and reflects were impacted X% X% the quarter's outbreak you driven dollar know around positively the a top-line euro were Bookings by QX unfortunately supported and million meaningful acquisitions. by $XX against organically in primarily and As

XX% declined decline mid-quarter XX% to Asia, organically within posted a due Asia significant while disruption. of China All

by growth. of principally five organically X% largest driven our down Products. out X% US, grew was posting Solutions and Europe Fueling with organic segments four Engineered market

stabilization been some cautiously China, drop We expanded expect in the in in relative to Covid startup we're April. in Europe for has a US reflect Also, QX markets. as demand and year-over-year although into watching slow

margin on reduce refrain into on I'll helped the digit improvement. segments Further bridges expenses. with to detail going corporate three from X. the five posting go these by basis of for Slide quarter earnings triple Let's bridge

addition margins actions, by volumes, of FX lower generally were associated Outside and foremost pricing would by start operational negatively and In inefficiencies and inflation. fabrications first supported to positive. steel disruption, impacted cost with mixed and trend it to

material seen quarter. have cost in the We inflation

quarter on flow quarter the quarter is of the flow Now improvement of top as million flow. cash $XX move traditionally mind cash first with quarter Slide generating million, typically free shows negative lowest our the QX. a We're X. for year. first generation Cash pleased with is Recall into cash $XX last over and we cash

into second done free in flow quarter. expect managing to have job proactively good working more the we environment teams Our and a manage to actively cash this capital uncertain continue

Capital expenditures versus productivity in capital increased these projects of were projects Most and the for started as quarter million comparable period continue we slated the growth in in-flight for $XX XXXX. to quarter. completion are our slightly execute second

Lastly, financial our X. financial us let Dover's and me on believe on standing the of positions strong position you update uncertainty. well is We unfolding navigate Slide period to

prudent comfortably EBITDA rating First, leverage a capital of grade and safety. the we us in targeting our structure with have investment places at margin X.Xx been a

maturities effort last in debt the reduced long-term we until and shifted out QX which the expense. year, XXXX, undertook have our maturities don't we thanks Second, to refinancing interest

of Proceeds $XXX $X another March. out volatility consists paper in experienced of caution We late paper. drew revolver million of of in quarter million million of our revolver when first which with current were commercial approximately Lastly, we billion the abundance markets pay and of off cash $XXX operating about to capacity. principally unused $XXX are of maturing commercial used liquidity,

the in paper if and back stable. the commercial in potentially program are remain We the revolver, to use cash April from will market pay conditions

remain for into we the the at company flow cash quarter. to summary expect strong second move as So free in this time, we

With that to going to back pass Rich. I'm it

Richard Tobin

Okay.

on not to try mute. other put Let's each

to the on about current footprint XX, projected the we'll year And mid-April and that, suspended outlook current our Slide deeper the status Since slides. over of we've of full for Brad. will next dive guidance, Sorry few and demand conditions operating quarter. we our Slide XX. cover let's as trading into actions go

Engineered Products. First,

As after and deceleration with industrial our as and winch vehicle slowed January markets as are automation February. in March previewed material aftermarket, and industrial weak trending QX in positive results, well continued

We customers volumes, operate fleet these capital. right-size continues to businesses cost businesses handling and actions waste our essential our which management capacity intensive. Waste working are across municipal taking in as as more in seeing residential QX truck to are increases and be constructive large are

traffic. price is been and have sequential solution a generally spot. trends volume business margins Customer retail fueling saw EMV the in offset fuel the good US worldwide of and with in some Solutions, trends April. robust record high and on Ordered Fueling operational In essential base slowing is on reduction oil fuelling a bit in help operators considered low as March bright is business

On this near-term to transportation markets during is see uncertainty. in vehicle outlays of the downside, wash likely capital delays

up We dispenser except and few in and in a sites in and smaller segment Michigan are largely India. vehicle Italy one wash Brazil, the running facility

unprecedented visitation of in in plan sale, QX to as as globally. In Imaging fast-moving of sales home-based which and printer strong sustain utilization production XXXX coating customers with apparel, apparel March. consumables directly goods. at service restrictions. our and the we XX% with surged Parts as in not February Marking, and peak printing relatively markets in will consumption shift to And industrial fashion notably in be or and this sales of maintenance business and due immune are end resilient up tied to current textile to challenged packaged volumes consumer travel QX goods, by shutdown and deal consumers driven are should markets and/or ID, is digital orders an retail expected be held of delay

We delayed time. at expect a later recover sales to such

of segment. for backlog if Systech with is are in we majority responsible We the see increase the integration progressing the which the

and and Pumps power in sequential oil business, are market the components while a revenue In trends seen has nearly constructive material growth. base. served appear Process half and chemicals, verticals, biopharma to and polymer hygiene by not food Solutions, generation solid beverage, that precision backlog and with and slowdown gas plastics continues our project and their military, we of cancellation in while equates areas equipment industrial seeing strong annual of some primarily are Mod operating

supportive solid, factors. headwind this revenue derived is These base should is segment within from substantial is We large projects In And largest the restrictions this our and in contractors its timing facing but access. remodeling segment. in orders construction. demand parts across the equipment, and peak this in and inability share forced and postpone in the refrigeration site capital but retail be and business, to portfolio fit the local trended or to consumables of and retailers March, businesses construction The are and and starting uncertain. business first replacement gain March in technicians retail spread positive traffic versus business in backlog have February food remains near-term due segment several spare shipment core installed food many a volumes, to

of will expect be to store will a comes. when volume frozen increased wear of will the We and create equipment demand substantial we result and surge refrigerator pent-up that of tear products sold rebound it being a well-positioned capture in

several business. mix Overall, quarters variable we this of in potentially performance expect to

Exchanger to HVAC businesses material in reduction disruptions both customers but we Backlog the in for Heat face Our operational in in we with industry must our uncertainty see back demand and do sequential here is March. as online. improved slowing globally, quarter, come wait Asia

the hiding segment service in in manage with capacity through trends no institutional in the Our March challenges will begun demand restaurant significant by is commercial in unprecedented business facing opportunities It's market. only curtailments has significant aggressively already seen QX. year the decline order here; partially offset food

next to slide. the go Let's

QX. a have proactive We early cost in containment taken stance

our I'll the compensation on actions in travel can in see QX declined next you which lower in has costs. absolute QX And quantum driven and accelerates of slide. cost As incentive mainly a SG&A by terms curtailment these cover

items. are million on out in variety primarily center $XX from as achieved other led $XX our program progressing We IT cost QX planned million a with cost and

the both include charts see are you For not at as footnote. can additives the clarity from SG&A fully sake,

of CapEx in which billion scale shows the and spend, by the We cutting management. should primarily million On over in a capital non-discretionary which with business, view downturn we be flow flex additional demand environment. inventory side, have we longer committed as or have expected. in the driven we better $X deeper light than cash We carry down are revenue you we $XXX working

large driven in we going slide government that, all is After curtailing most let's to sugarcoat this. to on proportion a tough not some or get companies let's important a from operating. by prevent the In portfolio the our will a capacity despite across locations be of be us the adjusting healthy QX down mandates deck, backlog; following.

this that end the capacity. can in I see You on touched markets impacts weak that In demand curtailed earlier, most. several warrants the business

our retailers to food In contractor executing project we of proactive in portion weaker continue access. as working expect by to their And capital is shift of against operational four inability retail, demand management result forecast. category of facing and in a a backlog significant challenges and hedge HX heavy and environment as driven traffic

We up catch deferred half. in have the to production second the capacity

in slide previous million In addition had approximately lower the flow-through to capacity fixed the curtailments on reduction $XX the $XX back quarter, levers cost in the million will that programs of variable and and loss approximately offsets year-over-year comparative our to would estimate that contribute cost take QX. revenue, reductions million quarter. margin we you cause on in the inflate these $XX to We which of positively under material absorption will

cash the pay do inventory schedule June QX. dividend management the of Em-tec quarter. acquisition we'll of the expect we to to and both in flow in intend of bolt-on positively in On contribute side, the We fund

but in unfold in there to almost directional scenarios, for of the unknown year a variety The magnitude. So will can of guideposts let's be change up, formal the revenue with put yet guidance. of wrap certainly year absence some negative out different it

on under to can costs. a we of offset focus our of will of We variety control margin full-year what We volume which decremental best to we have actions absorption. target XX% XX%

and a prepared arsenal slides full levers in prior the for year. You two saw the remainder the of actions of we the of glimpse a

side, with flexibility flow capital will cash defer to the reduce On we our spend more.

targeting are year. of conversion for flow a adjusted the cash We excess in XXX% of earnings

but opportunistic. suspended to posture lastly paying intend our and remains repurchases, We a our have continue share dividend M&A

perseverance acquisitions Q&A. at I these valuations. And continue everyone difficult In Dover in to to it thank We pursuing summation, their logical at will bolt-on let's rational open times. want for up

Operator

Instructions] [Operator

Jeff comes Research. Sprague question the of line first from Your with Vertical

Jeffrey Sprague

or Good Thank the through faring Hope just missed things. a is I everyone. of call, couple okay the so you. minutes situation. XX everyone morning, Richard, I'm this but wondering first

station mind, refrigeration the situations I any budgeted. on if perhaps opposite? have the seeing less actually to fueling first sense the jobs this the accelerate get where work there's comment question. where Are it's getting and done difficulty an it other capitals already and been gas just the up. you makes done. to Your to some traffic mean That's of I follow comes at

Richard Tobin

or way Well, them of side, that Okay. flexibility fact it the industry can't I it. more describe that there's you I the first as fueling answer guess the what I outdoor is and stated question, so mean matter is an they is any better work, forget is than retail the the important essential. I it that's

see everything side, the retail in no restrictions slowdown issues of it's refrigeration And material So any on fueling terms absolutely more seen going on. you traffic work on and a because is and we've or real the in indoor side. supermarket

I happening understandable what's there. think it's

Jeffrey Sprague

you're on Then saying restructuring. just on what be to clear

$XX and increasing the not and speak. on restructuring actions actually may table these scope But had XXXX of pull to or you're kind like. on and correct forward to your you Is buckets beyond? variable million the So the doing stepping for what's you that cost are so actions other you're have up G&E active

Richard Tobin

solid. $XX is the Well, Okay. million

it in think was I benefit QX. the saw you So $XX million

to quarters that of through expect the be four We even relatively the year.

not curtailing the we're If costs containment its the operations. and the of -- actions of of do direct cost labor when you it furloughing our variable unfortunately to costs then want and balance mathematics is restructuring,

volume out. bucket to opposed restructuring put permanent wouldn't I more take because in related costs as So it's the

Jeffrey Sprague

those in on back volume things along maybe to other in with you're things come thing? side There's that should or of those not the or view then going way things that are recovery. And we the savings other sorts also on travel do of of lines all doing kind corporate to good swing your volume get this expect those other we when related future

Richard Tobin

Hard say. to

happens forward probably from I than would here, expect XXXX. be I going would XXXX lower with think what but travel that

are opinion up that establish working this to We'll cost immediate see is for year. you we another deal that if million it, fact -- everybody that longer-term because opposed next plans when home; the to $XX on at million we've matter for on $XX an with every want we year here give plans to for of as of you mentioned building progress actions we little on the bit turret how If had the our we, we turn productivity some the difficult. as we're become a And ones. with has really

your question. understand I So

I and can some that probably get year the around we put that. think think brackets let's further into I

Operator

comes next Gordon line the from Inch Your with question Haskett. of John

Ivana Delevska

This morning, Ivana is on Good guys. John. Delevska for

G&A of cost clarify QX? $XX six that thinking and percentage you So incremental the I cuts. QX would to about be in much would sense how give be could how it you volumes wanted just And the fixed so are to of a that the us cut versus million And decline?

Richard Tobin

would presentation XX going We're QX. corner left-hand slide comment that posted, we of cost on gives your to I in to turn bottom QX the for yet. where you not our the actions it attention

to how see million the model four quarters. the of present, out, Other structural costs into can that QX you take than if fact divide $XX progresses. by you Let's want

Brad Cerepak

into And $XX the on clarity, million down. as just we for inclusive is said chart, X% the

Ivana Delevska

million, I get. $XX okay. The

both variable a structure Okay follow-up. versus sense cost ideally one and give of then breakdown for G&A? your Could us fixed you

Richard Tobin

are because profile. If operating their different It's not in companies a so there's question follow-up the meaningful metric consolidation. in

think questions back for with get recommended you Andre follow-up I there. I some

Operator

Scott of line Davis question Melius next from with the Your comes Research.

Scott Davis

are to of like that. thinking about here M&A equipment it's assets is like guys. particularly food morning, there I know it think Good start impossible perhaps if and but distressed early about Hi.

Richard Tobin

this, impossible hold not really, of that's see to kind looking think in if what the Distressed come a on It's Everybody's first happens assets I go taking were of asset the to don't but assets. to situations things it. we table, distressed last if are year. at know, I'm we values timeline things bailiwick. it for if not going were to v-shaped recovery that the available about is the our are some to like that off of what

attractive have is expectation our to on be something going see like So to Scott. pursue It's really early that, what going us we'll is be to to distressed. for

Scott Davis

and in here it, the that if but said down business Extraordinarily I just much it like orders? Is how equipment or you number like apologize and -- something? high are that or food Yes XX% magnitude

Richard Tobin

material. Yes. very it comments during the size We it its didn't but

Operator

Your of with the comes next Joe question Sachs. Ritchie from line Goldman

Ronny Scardino

guys. for Hi. Scardino Good on morning, Ritchie. This Joe is Ronny

first restructuring, easier some So rolling and out it Thanks to make the services companies? on you just one for backdrop business follow-up. execute Dover just to curious faster operating does

Richard Tobin

go you cost that anytime on the that that into stay think at implementation But that like more a for home. structure situation becomes with it difficult I heightens Well, focus sure. everybody's said this having

little a it's bit more So difficult.

about start to to cost around in people DBS on working our foundational in As our year-over-year that part savings businesses a my mentioned having deploying I of the is some of comments pillar. that. said But

this going to down year. don't into expect question. we --going at So your it And next slow all through the

Ronny Scardino

where your there in across And more you this portfolio could downturn? be do then think resilience

Richard Tobin

performing the and business is gives a what prepared XX our window the that demand is. from I point on of look we how both view you stance slide the you think slide you go back if of at Well, operational and best

we than question. that more answer year an should your speaking comments. think granular I give generally entry That's

Operator

line Mitchell comes from of Barclays. next question Julian Your the with

Julian Mitchell

the The cancellations those QX just extent help much US expecting of maybe morning. way in number, push something Maybe which EMV in seen around you a was you us what's occur? Good understand strength investments solutions. of bookings happening or Have to blip. that the Hi. fueling to outs or

Richard Tobin

now and expect. not have don't We right we

be US side backlog issue we Covid to the at on based beginning the Otherwise that to to because slowing would operations on running we down. curtail our you shut We the expect mostly we and see. had of the some up had April, where plant above-ground can QX the in due

Julian Mitchell

I see.

so demand the in disruption on driven much haven't forth? you and So with seen miles US front, too collapsing the even

Richard Tobin

there I EMV and think upside, material slowdown. into No. last mentioned to I unless year, actually the for that that QX has adoption changes. said we that QX have a as reason that potential close it mean of into stance was We accelerating one we don't that with it been believe at would area that continued any be

it's same and robust a to everything absolutely going quarter now order else, quarter. the going intake go to orders, It's Now based on quarter move but not the we with backlog. into right be by

as mentioned. on have will I QX take think us I we've that's less production in sites but had because performance it to only the down

Julian Mitchell

around Thank us recent my in is second exposure that or European help just There segment cycle Maybe amount understand large would short in globally. trending European you. Then the topic been trends very a demand that past? in of very DII the DII How segment. be have those business. how the

Richard Tobin

Well, that need between and and business side. textile under the textile I to then The we printing is pressure. ID side that enormous the split think

on printing consumer may that it to and are to because had year, the was significant recall printers a I production of that much consumables terms business so the in year-over-year On management taken goods So because ID actual improvement including of would fast-moving It's in maintenance shipping. that on in cost that we have the you and but we actions difficult retail expected full operations Europe productivity a a going side, have in going QX. themselves side, as the of demand? of good just what's a textile amount difficult is that on quarter expect business, and a

Operator

of Your Bank Obin of line with the from comes next America. Andrew question

David Lane

your is the early on What's and Obin. the this then Good recovery David pie Andrew morning. for chain experience in China? recovery of This been demand Ridley-Lane sort on in

Richard Tobin

material issues own not chain side. in I We say have, our would supply

to It earlier of took itself freight little for down. a side the was I in unlock. when it QX bit China that had think manifested

China of some challenges is function. and our they're not recovering, comment insurmountable but and demand a slow recovery terms have it's the but in We

David Lane

of the as on quarter during you think the of trying then or be in could this it. understand large sort about to how And potential margin just meaningful impact for that curtailment other terms

Richard Tobin

right; can't curtailments to us than you give Well, and costs million between between going more and I $XX are gave cost million the XX alone. we fixed information slide $XX on absorption of million estimated $XX

So out going the that give curtailments of in the take of should you idea to an significance QX. capacity we're

going size demand this So We're it are the of going capital the the burning bets impact. we're I'm manage not production to manage and more backlog than proactively working some cases in not that, but in hoping relative to cut certain to make and going not down for, strength on we linearity QX. actually business to

Operator

the of with question comes from Your Coe Research. line Nigel next Wolfe

Nigel Coe

of from expect have sources and and capital guidance flow, plays Can hear how you some free you So year? but not manage no but wondering, year apologize addressed earnings? you what, of do in full calls the right now guys? to two Thanks. perform here, cash I'm through be Look, Good me, to cash working the out trying earnings morning. if cash Rich, expectations versus I these for may full, questions just terms obviously, how that

Richard Tobin

posted on look deck go we a you that the If at we XX. take would

going liquidation is balance be the influenced by expect cash We of sheet. market earnings And of XXX% conditions, that on to of depending adjusted year for net be conversion the free a XXXX. full to

Nigel Coe

QX balance be got that you a think would backend bit And to you more liquidate that's more or do loaded along sheets bit expect with to be Okay. -- that to

Richard Tobin

up loaded you what half the moment beginning because of we're in year. years the Well, second ramp production positive know hopefully not a backend let's in as previous for think to as

So we're it mid-year, capacity because is. utilization which are more usually what we highest bit inverted not our that's a may little generally be cutting production

to in cash working positive more hopefully let's QX. production the generative a two about and from of in ramping up we're capital expected middle we So think view be quarters QX and point

Brad Cerepak

there's earlier, you did and of expectation it we missed our if for as page And on take says further there down this any spending as well. here flex XX, CapEx it year

about flow our against to adjusted to with going we're that through cash this prepared our we continue in So XXX% to year our ability comments free talked earnings. an manage deliver expectation

out we falls will fast liquidate the sheet that how on across how right. So depend balance

Nigel Coe

Thanks Thanks did Brad. CapEx. guys. see I the Right.

in pricing quarter. So terms I'm but not point this completely of you did pricing blind X%

if you in on And if back maybe half can maybe have towards you've of give deflation year. concerns terms across what wondering pricing the pricing? seen just the color the you has Just any of portfolio that

Richard Tobin

we general the marketplace that of concerned kind we in haven't as pricing seen think I it, any about crazy but comment. a are

Operator

question line Kaplowitz next Your comes the from of Andy with Citigroup.

Andrew Kaplowitz

stronger project? Hey. progress that expect the second made year time. morning, in automation the talking results just with [Indiscernible] with respect, guys. does how I seen business some there up you think And Rich just obviously so and like on made, but about the the sort following Good demand, sort of talking you of you the about half of the mixed comment over

vac] into you've of which going here So been the is together [bel the of go all think start sort year? I Has a margins. got good backlog. as good strong second you you half

continuing mixed instead it do is just guess I because can to mid-teens tougher still that this demand business you So ramble or of in environment. of margin the

Richard Tobin

in The answer and benefit a could backlog we we've is At margins the second automation of is, run yet, Andy, the as don't decently these right. to we the do that inventory, based because performance production signals the that fact down of the getting day, I on now half in actually year. sites which our know on of business sense make and in do out advance the all refrigeration But get all in end the the production the the in and right. got It's production. for down doesn't projects, we're principal are from matter inability just to of proactively the get build and it the customers marketplace our performance taking a QX

to So year was the kind of and pent-up a were business. It's put half year. in really has because corner We believe of through hoping unfortunate that there's back this the where we'll the Covid see nail the it. this this demand turn messes in we

to say the than difficult sitting is we going for here to longer term, me that over say So over a but continue XXXX. and we're It's automation, it's think doesn't so to to meaning to even here It's lose demand I the that bet. we're work at point, function happens stop. the with what into hard on very just bleed did this better volume going today quarter

we that loaded. portfolio, we SWEP the some now predict believe out sure, right more HVAC of case. if releases is which to balance the already. are as And that a said second been bel to going difficult ones is be half earnings The be there's vac On the was to

So of on The March in going footprint you what's Europe April. has know been month and the HVAC into of down during industrial largely there.

that we deliveries. can come So so we need to resume back

this And have to business. of in going for a until just food to away restaurant equipment, I think period the that on goes of lockdown retrench of all we're time detrimental because impact the

Andrew Kaplowitz

maybe And comments products, of there. but sort you businesses in of talk engineered I on that's Rich, about can hear lot helpful. your obviously didn't

in lot impacted, difficult in business So it so that's like how is the ways. more business half the you've that of a in about focused for it of this kind instance got that environment, auto VSG Covid sense doing seems some

So about doing. that the the maybe overall retailer difference between talk and how versus business handling is waste some of business

Richard Tobin

Italy. shut QX objective being the significant in of in at a portion VSG Look, had production

said critical in those excellent. home it not whole performance view a this phenomenon. else everything part. shops are from was repair with point QX And that industries is at the and not margin having But of most dealing the for are stay So

capital So expect its down else having that's and business. production aftermarket in proactively miles I to It's management so expectations But we basically our in manage be not second into driven itself. said everything working that bad is That's now. VSG half. right think the taking that would the

a the like going of, winches that's as to goods smaller as like year. businesses that capital tied things of that's more far through Some to kind that's and tough winches, and go

Andrew Kaplowitz

backlog it. good handling relatively I you there. Got side the saw And waste on mean

Richard Tobin

good. is Backlog

our that to down think I we're going QX. manage in capacity

I sight. I get down down to expect a burning performance to that take business comparatively you QX. As little a backlog this we're of until going perform in I mentioned well line year, think about bit production but

Operator

comes the JP with next Baumann Patrick question from Morgan. Your of line

Patrick Baumann

major morning, And reasonable questions. The shut mentioned guys. that taking the of way I of partially for quarter. to your my that curtailments lower capacity. a closed at color a Good low on on more it quickly in second than know it's sales maybe provide facilities X% much that the worse that kind but is Like or the as global than Hi. And XX-Q or could you curious is Real production. April completely are XXth. are second tough Thanks reason? for there organic destock seeing about what any Like for impact quarter think just any down you would of in big channel it be double-digit could that. we're industrial XX%

Richard Tobin

expect said I we a out came the the get the QX the That's bullet it the we so good by Yes. they, down on I'm the going of try at that that for the cut points and to difficult be to going conditions that you. revenue. of size deteriorating quarter be and revenue say first think fact to to fact collage when to that exasperated QX year end clearly not one imply is Look, production would that But we're of most significantly. QX going

Patrick Baumann

if maybe. down out. payments tax areas. the about about in talked we the filings cash Could Maybe flow should things you're of back. all something other when the and coming and some things mean, just Okay. cut that certain you're the on mention, free you revert you CapEx expect of the we deferral Like of CapEx a could few this come better? I then being also capital get pushed side taking if And actions working different the address And managing sustainability to on indicate how

Richard Tobin

I back. CapEx think excess change have the to second year the for the come of half that forecast the for would of environment demand our in to

point year, expected So more during have the up. come demand the in but unless at not CapEx some to way than certain positive, the to re a that I forecast I to hope our environment changes we backup forecast

Brad Cerepak

the think cash the is activity of type the around see deferrals. mean company every and to on Yes I act. related flow that going I

taxes a It's personal number, something big still major a it's it there's even and year. is but So number. on of not there's a timing, within your speak also just not deferral but it's

that be aberration for on free the some going flow year. changes on there's view to but that nothing our cash So

Patrick Baumann

up Okay in underneath to to I reduction then since controllable of the and hits. $XX million the follow XX on that so number fixed and impact. first my on then just, curtailment actions to $XX a you're slide question offset those said that answer. fully taking The XX schedule of million minus sorry so get the absorption an didn't million year-over-year really $XX curtailments, million, costs, net offsetting $XX cost about you Like says think then XX to is XX it

Brad Cerepak

the end you're still with down, days the you At That's Yes. of what's missing it. the got come the up to number revs there.

will So offset. fixed cost the absorption

Patrick Baumann

Yes.

Brad Cerepak

But down income revs lose the you right. obviously, on

Patrick Baumann

Understand. Yes.

Okay.

Brad Cerepak

a that's That -- time. everyday. changes Back point plan, so in

update think to down a or you're something globe. number that if either trying the up depending be on interpolate I a now are So facts any in it'll around I there. we from situations in mean what different geo the week

Operator

Your of next Dray the Markets. Capital question from line comes with Deane RBC

Deane Dray

of capital But I'm morning, structure and about changes that businesses? not heard may We've I I these sure sense and buffer Rich, Thank of it's how from look was be the reshoring, Hey, talk know the might you more emphasis and you. Dover's about so forth. impact you could on it be the but how some early working more some the specifics do carrying commentary and think to inventory. secular hopefully general think ahead mind. you what some of organization makes Any everyone. pandemic the changes still Good come would

Richard Tobin

Yes.

are the by think, medium-sized longest made I that we, that companies collection don't Dean have Dover really a of up chains. supply

that So I benefit way reassuring to for bigger apply really in going to so businesses. of think happen vertical I from us in comments about some the cases hope is our because our that's components industrials the that certain there a anecdotal to don't extent some to of what's of a lot

Deane Dray

on Dover Anything on be well to fronts. behavior changes specifics, commuter food those may a shifting But supermarkets like the as any longer-term for see retail type delivery. fueling more warehouse in then you do operations as on

Richard Tobin

Not crisis. this anything going thought into we different than would have No.

anything think we at other secular going but the I what food I think we've see. on that in always don't there's more into the than the would watching future, been we'll end And I argue would the of we're retail, it's our day. that turning think corner, that that favor the least the

Deane Dray

last associated consideration some surprise me. dividend. expand much buybacks preservation? decision now. buyback And political the a influenced you of for one just backlash you No that Got it. just is stopping liquidity that's And of all at How for maintaining in on the you maybe here? that Are the at on with of

Richard Tobin

It's all liquidity.

Deane Dray

much. very you Thank

Richard Tobin

get a And when next And that quarters these then hopefully to everything's fine. we back to few we can what returns. capital go

Brad Cerepak

We to thing just smart think do, it's right. a

Operator

The from Baird. the line with last question of Dobre Mirc comes

Mircea Dobre

Europe it just now. wondering think whole geographic morning, And Great. business following issue business be Thanks than started would talked westward fair about pattern look growth? some the provided from for line here sort big down the you disclosure US in that is maybe business Rich, to on make in Covid a sort other of operations where expect US started moving you terms the Or similar of or back that the you mean particular there your do squeezing your want me Europe in. geographies? this the detail. US to X guys. Asia offsets to even look Good I hitting When impacting different could or in go at mix you slide to I that are Asia picture there the your of

Richard Tobin

careful the the can I'd in or the But but put travel Covid-XX like expect participation we in quantum we of today our because will QX small the different lockdowns that and watch almost that this using that pattern the follow had we slide in it with regions together, North it's same like exist would to that think are without would the of law would way US you that that only come question were I about and percents late we of the America. same be world numbers. a talking pattern,

Mircea Dobre

understand So sorry better to finalizing a I'm trying if maybe for now pressing US on business Asia right not. is Europe this to but benchmark

Richard Tobin

are because the can't numerator and only You different. all the denominators

XX and So you careful saying, pick which the or the to about using be one X. the well, just I have percentages should

Brad Cerepak

strength is Yes. fueling to shown continues about It's, as show the talked US and we the even business in strength.

of the terms not geo every it's in So -- same in

Richard Tobin

be back I made go I to no is mistake; Make to And the QX before. going comment tough.

Brad Cerepak

Right.

Richard Tobin

I on a going be mean what that's so And the but on can why it's you put Right. base, production to element intervening it, different.

Mircea Dobre

as has worked of that initial X%. terms right of upgrade where out up Thanks. about that our your the orders from just can. And terms is sort We your being wondering we're nicely set the in of sort EMV of of sticking try business to outside up with nicely; you a the you trying to as all in as think do your to understand think X% for expectations just fueling are what best versus penetration. do were we backlog the expectations you numbers up close different get we here, year I'm then to than now cycle up your

Richard Tobin

What we haven't penetration had those run the time numbers. to

put we it the that forecast when XXXX fueling saw because together think there adoption. trends was that to we upside, QX. order said, had I thought of going one that in some QX for we was EMV solutions is about the held we if Clearly, in segment be

that's and always this the driving we rate spent our that year, but to better But So push would was the it's see. But now I it window we'll backlog. as know, but we've adoption the of you it holds been, be forecasts. trying hope seems we what's whether out a year than expect accelerating so, within through to

Mircea Dobre

if wondering in No. third, I adoption the of the the that we're or cycle. this just fifth understand I'm inning part. seventh

Richard Tobin

on haven't whether units times depending all it's haven't just I over or going kits. view, I dispensary we we've map to, point know. a to in as on that's know. a of revenue from it, everything don't don't said I total doing had with time Like you're from the market we size and it said full time numerous

Operator

call. Thank you. question-and-answer XXXX concludes first for That quarter Dover's our period conference earnings

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

Dover (DOV) 21 Apr 202020 Q1 Earnings call transcript