Dover (DOV) 22 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Andrey Galiuk	Vice President of Corporate Development and Investor Relations
Richard Tobin	President and Chief Executive Officer
Brad Cerepak	Senior Vice President and Chief Financial Officer
Andy Kaplowitz	Citigroup
Scott Davis	Melius Research
John Inch	Gordon Haskett
Steve Tusa	JPMorgan
Joe Ritchie	Goldman Sachs
Jeff Sprague	Vertical Research
Julian Mitchell	Barclays
Nigel Coe	Wolfe Research
Andrew Obin	Bank of America
Josh Pokrzywinski	Morgan Stanley
Deane Dray	RBC Capital Markets

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to Dover’s Second Quarter 2020 Earnings Conference Call.

Speaking today are Richard J. Tobin, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and Chief Financial Officer; and Andrey Galiuk, Vice President of Corporate Development and Investor Relations. [Operator Instructions] As a reminder, 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 call now to turn to would over the Mr. I Galiuk. Andrey ahead, Please go sir.

Andrey Galiuk

Good thank X remind playback materials, everyone website. measures uncertainties our GAAP included you, on of impact morning, Thank in Laurie. be will that and customers that provides to and their presentation a and We quarter audio analysis XX-K Dover our call global operations, We and for and employees, supplement, Form update turn our in We Rich. on to flow. archived that, cash adjusted to non-GAAP statements are COVID-XX be this by that second will of and call XX factors website the today call. business, any which With of obligation in from over everyone will you undertake call for and Dover economy forward-looking to guided no between and available August could for forward-looking for through our the publicly those portion comments months. available anticipated This law. joining reconciliations investor are forward-looking XX-Q list to our the Form our caution of revise may except for everyone as want our risks, statement. contain any including our subject I suppliers, by referring be information statements, required cause liquidity to this on or differ results the are

Richard Tobin

morning, Good everyone. Andrey. Thanks,

results with X. the Page begin of the on Let’s summary

cost-out program in and We our earlier reinforced be expect that challenging to we QX in QX. preparation

the a of times set our we operations, in to decremental are out through employees. of in still comprehensive quarter After entered to of to our material Margin steady Thanks not this have carry turbulent and state half. broad-based year. costs we facilities operational operating running what were in XX% the increases was our We line the moving woods quarter of organically From offset saw lower across Trends some control We profitability battle. Revenue in-flight a the quarter So full execution on the cost decremental which safety May. of target. point can importantly, initiatives, fixed of segments backlog quarter margin declined of activity targeted we and considering year. yet, sense the in full That to QX, an view, the sequential performance on achieved actions positive in of manage are the all a prepared focused we and in puts under-absorption to improvement and and majority for significant we which Top entering QX, exceed our with are very initial quarter. and confidence in costs our to and the quarter. year trends expect into a control the XX%. be bookings million for but track $XX to the we efforts and QX trial us compared gains to improved declined strong XX% margin June. is the line as we expectations up acceptable for April the for our XX% for leverage on that with business of second XX% revenue, much

in flow comparable costs, more generated free half. year. working the actions, conversion in of cost our in actions our structural with quarter cash controls and the part than management took resulted both we In We as second $XX cash activities, in capital flow proactive absolute in improvement million terms. the which will cost the last benefit further tight and us Along addition business quarter realignment variable to our cost

solid backlog are share. back have our positive As a backlog, $X.XX strong costs business and half. and proven for reinstating EPS and of as a but to to with be to are annual see in To second result we adjusted our to per our maybe uncertainty manage achieve even in we ability order teams a usual, their of our and operations prepared guidance that to clear, half trends, are and not scenarios recent our performance wide in the $X results demand variety still first markets operate and store we

commendable this in X. decline our This hauling the their and supply defense Waste a that Products to margin we America shorter and quarter more better at showed increase goods decline compliance half solutions, in driven a Slide a and continued margin as versus Marking and and and Lower of XX cost cycle along predominantly backlogs. segment. and had consumables to fashion productivity which decline in due posted pandemic. ongoing demand with in industrial were oil cuts last strong industrial will on gross margin dislocation well basis Identification Let’s recovering quarter, significant by Increased North Europe performance decline markets we activity resilience deferrals due budget resilient structural have year expected driven this our fast-moving digital comparable interruptions for automation strong textile segment take second with particularly is segment, businesses the EMV margin in coding highest vehicle pricing and consumer on the and tough strong very which was aftermarket, Fueling declined its global Engineered to whereas a solutions. aerospace segment strong in a business, and the sales mix actions apparel demand steep and Asia volumes The prices. in the Imaging response in and chain against COVID-related production look point and margin in performance winches. in support actions. to as continued CapEx-levered was on in printing like Solutions saw taken the shipping led volumes.

challenging are decremental So lifting cost containment. on margins and heavy require

achieving business coding job the manage printing in year-over-year good and a proactive we to marking and flat the margin a business. did taken base have actions digital cost Our

a from and comparable Strong last we actions markets. in expected. the challenging medical moderate textiles in in pickup and the these & in was growth line volumes, a of growth and performance consumable result Process applications in Its This slowing offset least quarter. industrial Pumps continued we among our half.X resilience products a segments top despite improve the energy to As record declined second material demonstrated year. colder decline posting biopharma Solutions with by a and the expect applications

in the a second a well expect strong to in half do revenue as it Our declined result backlog. timing, we business off Plastics the quarter Processing of for shipment

second can in a segment declining a performance posting solid you improving row. continued this As see, on for to the margin revenue deliver quarter margin

due segment closures to food the flat expect remodels improved by delay for construction absolute in remains retailers profit Food commercial peak service this to impacted utilization We declined or as Refrigeration the and States. United continued the food restaurant full and deliver year. school Equipment to & severely market

business particularly Our exchanger heat showed applications. resilience, in non-HVAC

side, materially margin and of cost took month drove the absorption structural the we automation paired this margin improved ongoing In which in June. decline. in initiatives QX, productivity the On volumes a actions yield lower performance with segment, margin negative in on

I benefits it growth second margin in half Brad the pass year. in continue expect absolute accruing year-over-year here. these We the expect deliver in and earnings this of will the second to and half to to segment

Brad Cerepak

morning, Thanks, Rich. everyone. Good

Let’s go Slide X. to

the On the is bridge. top revenue

a $XX to As line revenue be year-over-year posting in declines. opening QX, top top by mentioned continued organic impacted his the million. with FX Rich or remarks, reducing line in meaningful X% COVID-XX, adversely was each by segment headwind

expect breakdown relatively our Brazil be We less Asia versus North emerging resilient declines The significant growth by four of by more XX% fueling. geography largest in reflects economies quarter. FX offset offset Mexico. with organic India, more and organically like and of segments trends Europe second effectively Acquisitions market in retail posting impacts revenue a headwind half declined several partially by year. in were the and the America The U.S., the in dispositions to the across

in compared in showed Imaging Identification XX%. half signs decline the a All of stabilization Fueling an China, decline approximately our to equipment Engineered and Europe from the five to was year-over-year an early XX% of QX. posting business in Asia, down & quarter, also second representing declined organic declined Solutions improvement XX% XX% Asia slower replacement all Products of segments. oil up due underground mandate demand the were on expiration in of and while declines the companies. in local national China,

on Moving were the XX% declines across the page, down for there segments, organically all we enter cautious optimism five are bottom as second reasons but to half. the of bookings

segments in June a trough, as on month-over-month May sequential significant First, from the improvement with the saw presented bottom, growth. five the posting double-digit bookings all box

improvement previously well-positioned the We this time to businesses our up cycle by our in backlog longer businesses. shorter the for half year is compared year. intra-quarter cycle are we and our X% the Second, last of driven mentioned second believe

move focuses on efficiency charges X. overall and detail hold annual the declines, EBIT help on going our program, to to the back from $XX containment benefits. restructuring an reduction footprint on office the margins into Let’s too and refrain productivity the to trend much I drove bridges top chart, initiatives will although adverse line but Slide cost which cost up expected at million took quarter, on add the acceptable In we decremental. the IT that delivered and additional offset

under-absorption on additional of to offset cost cost previously $XX well to estimated under-absorbed executed quarter We million fixed also $XX the – in at takeout million. the

recent the Some half XXXX. second and margins of into in will supporting these initiatives continue

slightly declined offset the lower segment quarter permanent on lower Going tax interest first to quarter other the Rightsizing in we unchanged bottom chart, for approximately containment $X adjusted Discrete the were lower tax new million lower several The XXXX. relating effective by pulled excluding due costs year’s approximately earnings forward in to quarter. benefits, or were lower benefits that and is to $XX $XX tax from quarter. the mainly expense second and million taxes million into XX.X% after-tax the prior earnings. rate, initiatives partially the quarter discrete cost earnings than

with pleased in flow million Slide million, a the of moving the with $XXX we first $XXX X, free cash generation last XX% cash Now, year. the of increase or half to are over year, year-to-date

job have in done good a managing teams Our more effectively uncertain this capital environment.

expenditures deferral benefited receivables for second X decline $XX seen the last growth and of payments period million continue inventories We on the and year, operate the quarter. supportive order second an backlog projects months of approximately were of million U.S. in our in-flight into collections strong of Most our accounts million half comparable $XX also year. the tax with were to of $XX the first capital a trends. in the year. completed QX versus from Capital of have productivity

in see declines half. So year-over-year expenditure the continued capital we expect second to

on Slide Lastly, now position X. strong. remains financial Dover’s

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

Second, capacity. operating of approximately million commercial of our we $X outset and to current stabilized of further the $X.X of incremental abundance fractured cash unused new $XXX since of $XXX drew QX, have we revolver. the paper were are March, million with an When repaid bolster our secured consists our reestablished paper pandemic also revolver at markets billion on million and of billion liquidity revolver of in and $XXX caution. the position. which facility a fully Markets out In commercial program we we revolver liquidity,

have drawn no either funds As we of revolver. on June,

liquidity and structure, allocation flow to our allowed capital have cash to capital us access prudent posture. maintain largely Our strong

this to far nearly on so continue attractive have we acquisitions and We deployed $X.XX year a pursue billion acquisitions. accretive

we Finally, over the I lifting market suspension buyback recent conditions will turn share should opportunistically Rich. will stock repurchase dictate. back we to on it and our are

Richard Tobin

demand introduced on is outlook X, Okay. am which of Thanks by we last Page the updated an business I Brad. quarter. view

estimates revenue to year fluid. we of we that remains you relative the with situation lieu guidance. this will Here segments perform quarter the markets trying in to are provide on change reads the expect caveat second I as current the subject to to directional all second of half is of in of how based is full and

the late in First cycle businesses in industrial have quarter and and shown automation trends vehicle the shorter are improvement as improving globally. Engineered such service Products,

China municipal retailers proactively. cities, continues remained were equipment in backlog in underground comparable of companies a watching two we network, headwind have impact we a EMV despite In the but a We of dynamics large and liquidity. million we North several approximately program and base. with a Fueling growth are retail Bookings profit from by revenue larger declines see Additionally, spending this from after their the base replacement business capital on have manage handling Waste in closely, as paused strong its top conversion full year addressing Asia, expiration tale mandate. tightening non-integrated this cuts are year to QX finances customers and plus accretion driven operating America, defense performance. business resilient started defense CapEx facing Identification slowed the top of headwinds capital to-date, more cost their to oil also investing hold resulting of in orders. line is having network to some margin continue both of investment may outlook the and half asset some segment Solutions in late willingness years the and robust share budget headwinds aerospace the $XX of price Despite industry represent integrated from of Europe oil line. is negative Imaging & the of in a decreasing line improving. on recall expect the a

maintenance Our demand restrictions are travel marking and and interventions resumed printers. pickup were a in resulting we service as coding lifted for and seeing

year activities & global Process are textile time integration recover. but a as are Solutions printing planned. We side, the Pumps difficult textiles trajectory forecasting improved as we acquisition Our here. to on take seeing is will from green Systech expected shoots And digital proceeding to show with some started

served aftermarket. First, significant to continue and Food half. components by believe The of pumps to material to refining components gas medical second shorter of Bookings this in its to precision the pumps, against. business is businesses for in demand segment. be and backlog business, a improved mid expected and we and the CapEx our and were refurbishment deferral markets this A and we of spending ship robust & we and to maintenance prepared cycle our gradually June Equipment, execute repair for pipelined Refrigeration primarily segment worst polymer continues in expected Biopharma business slow resulting backlog its is recovering. is Industrial that downstream against in start growth. a oil impressive resilient levered behind is in as operators. and and result portion precision a relatively and In plastics will have us our are

fully the and remodel growth being refrigeration resulting We is into construction also saw restarting projects QX. in for booked cases us

with margins. of result in and is scheduled the in Belvac profit to its which we increase. in through volumes to cost undertaken significant shipments actions trend Additionally, posting begin accretive Recovery against year have margin segment profit backlog, will remainder the resulting should a along be comparable the positive segment second half

Let’s go to Slide XX.

continue deliver including of cash positioned in XXX% are conversion to standpoint. confident the and about our As we and across improving COVID to for we adjusted benefits XXXX in this in flow We work And sequential a restructuring are from margin target well on positioned a as actions, continued pipeline decremental in in QX the QX at to capacity of those portfolio we remain from the today, net objectives. stance has earnings of presentation. a flow the targeting most line markets. above to are everything margin and the our conclude following. with performance but us target The target XX% we margin top the to cost the to annual X% and I cautious of XX% year. of cash earlier margin XX% result covered The improvement took XX% a time, Brad to had compared in slide, proactive situation, we last guiding will fluidity management points we trajectory are XX% rest of of here reiterating this target

to our environment. an manage result We have our uncertain in costs a of reinitiated confidence EPS ability demand guidance in as

Having here understand no the the foot make are playbook. we on a revenue growth said that, good driving have team from mistake, on organically inorganically. they We front and both and

capital market support extraction strong a we are wait our focused strong the the down synergy We our are pillars to and sheet product new and so on gains, of share portfolio, time operating as equally have on Inorganically, the This half. have in to to not to continued we summation, times. deploy to And with active balance everyone companies second development these go challenges. all which to Q&A. and like main let’s with initiatives to for their hunker of be in storm available In we market we fully thank I is them. the pass, from expect at Dover again perseverance despite continue fund that which for to difficult I’d Andrey?

Operator

Citigroup. line of first comes Instructions] [Operator of the Our from question Kaplowitz Andy

Andy Kaplowitz

Rich Good nice quarter. morning, guys.

Richard Tobin

Andy. Thanks,

Andy Kaplowitz

improvement as sequential faster on, have of slowdown in Are us than seen in June. color you give sort of if the any there in cycle particularly improved expected? businesses June not material of mentioned improvement or more any U.S.? the have You And July, that your fast late and in rate you can shorter

Richard Tobin

full have would is we guidance have we in June ended out seeing June. year terms mentioned trajectory EPS was think not when the thought I was. how We That of what important without we very given that QX that that

that we moving made And don’t business went not. comments is to and I so, and the through I the who variety I about all bookings about mean, of of want think companies different parts through the June mean, change again. of is the I who go a improving

printing, we have them We that not and like food like have don’t a got improved few, service to expect digital improve.

has day end the aftermarket at like So our businesses picked of for a significantly quarter. not the the up few of But guidance. cycle shorter the which out we built that’s of end at automotive into the called example,

was good. June So

in it the material the what earnings I profit to April, in made June. put double was think that we are June contextually. The we was pleased. absolute quarter profit It just to in

you color give go all the Slide here, think of the you gives So the the color is I based parts. I can X, the slide you whatever trajectory portfolio it I in on think terms and the of if in look that moving the and back you

Andy Kaplowitz

And was about May that Food year, continue but your be Have the given talking then on Great. optimistic. second into relatively they you in your then customers & project indication their as your yet. was a to Refrigeration start-up we commentary of to July. And you an said automation the you know stores are of improve. equipment more half right let backlogs

half us So the little on us margin And update color more the of maybe year? can sort on second of trajectory a just the give in that?

Richard Tobin

Sure.

Refrigeration. with start Let’s

booked are We into QX.

it’s So on that frictional produce that quarter, the business based get I we if is without be will the full and we now us in margin can up the which to product any costs have to delivered for June, think, pleased. our I expectation, think the

part to have backlog geared in Belvac. of that, we the addition In that segment is large this toward

half. in at are in So projects terms will that in and of in the front expansion the have second foodservice begin we all not XXXX can are and if half. we don’t higher all on aluminum for we It’s have second as making exited And if cylinders. we in equipment a in mean, some I we put on hardest building we relatively the participating got the rates foot large firing honestly, comp capacity aside that moment,

but second to will exchangers a half, and will shipments of we cases. why comparable improvement So material the basis, on largely do a as continuing that’s it’s result we over modestly Refrigeration in – Belvac improve HX-to-HX better heat

Andy Kaplowitz

automation then project itself? And the

Richard Tobin

half. the improvement the into in margin we That’s second expect baked that

Andy Kaplowitz

Rich. Thanks Okay.

Richard Tobin

Thanks.

Operator

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

Scott Davis

Hey, guys. good morning

Richard Tobin

Scott. Hey,

Brad Cerepak

Good morning, Scott.

Scott Davis

and up you sense was had XX%. is mean, I I a this China. or XQ in us of It’s you it is then the of guess, if down shape recovery become, still or can it to chance being it Brad, Does you with this quarter, said XQ? just flattish give Rich or think – more down in

Richard Tobin

relative which or issue, year. the relative of substantially all decline double in we at the wall this the had all the Look, guided because of the of quarter is of decline beginning tank

I slightly that, the I we businesses. up to the of on were we balance think were remove that if believe – we flat

second we always China to any Scott, & you bit our Fueling quarter-by-quarter, So Solutions, million QX national now. were It’s business right. spending the Fueling half. that’s companies that of I of improved for going calculations money have deal expect have $XX for not ID, the headwind the we had because in if have are means to balance that’s and related, that not in Solutions, going if but done which But just the be continue the of slow eliminate of a a top year, I in – the and to that Printing oil that materially headwinds we is what balance on right us to that with. volume mostly in

business So the and into marking as China and that. consumption coding restarted consumables activity started, about like has things can you think of and

Scott Davis

or lower usual then expected you That’s to just going helpful. of capacity, CapEx, you need in having need meaningfully there think, than is you the on facilities that continue I do kind XXXX go Do potentially of lower I that than two is guess can And mean, a there follow-up running XXXX? mean levels. or Okay. imagine – a you – anticipate through quick etcetera to to be but levels I are lot at up invested

Richard Tobin

$XX were one projects. in attributed Colder Refrigeration One X up new was the the are I would that have spending Minnesota. Products was Over, we to project that last and brand had last approximately for now July, built months, two of cases the for to XX over million building the we say we automation where in

in the of that pipeline I don’t anything So don’t have – quantum. those we –

XXXX. I CapEx if rise but catch-up in So not and in as to in expect XXXX, deferred have would we slightly materially CapEx XXXX, we got

we pipe, have get. business Now this to if more that, we returns what, in we we invest that have having in projects organically in based on the don’t got happy demand, than the are get said and the some we

Scott Davis

you. Thank Good Thanks. luck, it. Got guys.

Richard Tobin

Thanks.

Brad Cerepak

Thanks.

Operator

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

John Inch

a the much $XX.X how was you morning, target million of of new million structural Good had you. original remarks. structural, against $XX Hey, cost much Rich the Rich, incremental Brad prepared quarter, business much maps of couple think Thank I the took actions incremental in out some the was in called and how because in – segments everyone. how that of new that you your and

Richard Tobin

That is new the structural.

So $XX the million...

John Inch

that’s new structural. all So

Richard Tobin

The $XX average the we we We what quarter. and took dusted and quarter on. million got in for That’s this expect are that $XX just it forward. was million can two. pulled new. Yes. on through was The other was charge it that’s rolling what QX that a a done It in was and we working project we restructuring

have year, it So baked an will but impact in the EPS that the guidance. second our half is of into

John Inch

in structural the So $XX $XX by the more based will annualized you time or we baked out million cake all do XXXX, million your on have that’s you XXXX, Rich, the XXXX? necessarily when annualized, not so think of how in exit kind we much gotten the and intentions exit

Richard Tobin

How about...

John Inch

Incrementally to... just due

Richard Tobin

some to we where are the another of you we have the give end get premature where give $XX kind And bit But XXXX, the of we pipeline. Yes, but when QX, other got let’s on I going. in tracking actions for know us can you a – million quarter, color it’s now. we some are because right of

John Inch

Okay.

that of just progression targeted the in downturn is this on cake top at So XXXX $XX then that, million? do are sort the even do part And annually. of that or and or more be can we this of is go, have million this have that is you we $XX $XX all a clear, stuff of this like doing baking you we the million – to is

Richard Tobin

Yes.

said what is we the of this at think QX. end I

being on going of projects that to clouds to While we sit why and pipeline, the foot. had, we here now. don’t activity – it are had we we These are we level just wait not the front the are for are do business because and in taking on We that part, we right? just some action the said,

was So that taken. action

XXXX the XXXX, pipe $XX of accrue So the they at They then and the in of in second got the have benefit we redo think some of likely XXXX that million. will what we will half all end for we to QX. are incremental

John Inch

I’m your to say environment, on a from can of like could just more give what of the realizing, What is unfolds? companies just then, it are temporary as T&E? if way you given right, cost a as people quantify permanent the And like much cost And of there follow-up, how Brad the economy call or cost actions, temporary then home. Rich, saves, could need those now furloughs magnitude work lot depending a process is sort those thought us turning don’t travel. saves We some toward and you curious

Richard Tobin

those next Well, cost of day, look at hopefully and the we end accruals, the of result as would bonus to managing a expect temporary savings the build back year.

back. So those come

On the is variable cost, out. think mostly in SG&A, still I the jury

I we XXXX recognized have everybody may in that. business else to looked need like think that conduct clearly different back when we we be What historically.

president just notion XXXX, can SG&A ‘XX my the well, back So having go plans we as clearly, monetize kind put snap SG&A we get revenue a of to a premature it back is bit will ‘XX back ready of of supports are I the long thinking view, I don’t that for about and I it, conversations but we an that But company to point this level it’s operating are is, to from do our on the we think now. company as expect are operating okay, levels.

John Inch

That there the took or in sort what actions And sort of or whatever? rate to run of you the COVID quantify because quarter makes is temporarily a cost way sense. of

Richard Tobin

offset temporary absorption we quarter-to-quarter. day, it cuts. cost million we actions, That that – headwind revenue $XX gross Look cost at Then flat right? of the end to SG&A offset that a with with fixed $XX XX% cost have allowed less margins to of us with had we lost million the the or way. at Look more

John Inch

you it. Appreciate Thank much. helpful. very Very

Richard Tobin

Yes.

Operator

of Your next comes of JPMorgan. Tusa from question Steve the line

Steve Tusa

Good morning. Hey guys.

Richard Tobin

Hey, Steve.

Steve Tusa

using maybe of around percentage but kind sales. level? – cash flow like in Is the the of using free is getting something, for range kind the sneak to kind something Just of annual here sales right of that billion this to $X.X for

Richard Tobin

to we way here. revenue conversion get to sight and I can going arguably on think are – that about QX what or exited of interesting we expect that crook a of short, the net hook revenue the income. with it go number line the got the of have that We by supports This percentage inventory have to it. I Look, see on is QX. we for

will expect back So end year. in have now and real demand, the into we that inventory a outside baked got liquidating our I barring between of snap would of what numbers the be

Steve Tusa

revenue, Right. I on guess the though, like...

Richard Tobin

that going. I where number you don’t the think know outlandish. Look, out is you’re I put there

Steve Tusa

think with splits, coming the we in would think Belvac of the I other. in a and the of around fourth mean, usually maybe that Okay. step kind in things I third in a bit cost, kind of this year, And It they are ‘XX kind each about – structural like when up of fourth June. the took perhaps the sounds quarter. and cost backlog, quarter

linearity How better. EPS? there third seasonally, equal, do third are maybe you looks on a roughly we how fourth of higher kind think and trending maybe So we little do lower linearity it’s this mean I but about the the the normally. the year in in third Kind for like think it’s the of it quarter about and quarter fourth.

Richard Tobin

we it. that DFS. think clearly on a got in I mean, have have finger comp You QX tough in your we I

some to a into and by levered then better long in the other would And that’s cycle lot be factor be will and there. Belvac have extent, bringing talking you here. then I which that that to case comp-to-comp is the certain are we So QX. where swing QX if hope companies is to Maag, on sequentially that of The a are are and side, we a driven QX. going we

Steve Tusa

Yes.

Richard Tobin

Than QX.

I – a in DFS think is now, on a now Q-to-Q. – what’s and June QX are trending in in uptick barring bit now. it QX. barring are Right our basis be expectation right better so and little right look a we probably on comp happens, EMV less But a real hope So and QX in but I demand on not down we known would based that

Steve Tusa

this then just on to CapEx clear thing. lastly, And Right. be just

quarter. last CapEx You actually from raised guys think I you the where number were

kind inflated you free the like year, comp you cash flow a to comp some there kind cash are are think where this of year that being kind the for got unusual next growth this free of year So that that of cash tight it should obviously capital, me like by the that’s better next working is next bit of tougher situation year. doesn’t about not It’s we and squeezing a have cash is, on year’s despite look but flow a bit. squeezed there things

Richard Tobin

That’s fair.

Steve Tusa

lot a Okay, great. Thanks guys.

Richard Tobin

Thanks.

Operator

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

Joe Ritchie

morning Good Thanks. guys.

Richard Tobin

Joe. Hey,

Joe Ritchie

Hey.

trended rest just of great I maybe guys on you July? your you Rich, whether provide for So, the just Slide little a help on bit lot color is kind perspective what magnitude June actually a guess, magnitude how provide of like can X a of more expectation from a on the that’s standpoint, did year. from persisted color and into But

Richard Tobin

I see certain we mean, mean mentioned materially is getting were as orders which June April, declining better mean and we backlog, earlier, Well, businesses, a issue I any of shipping were function, of either. and April the we hope this again soon. look, April anything in was not not anytime I I about don’t a lot our I that May than but

decision a June well absolute profit looking the playbook So came was that control contingent almost have this entirely full about how and it operating for rates itself, at was, the and in got reinstituting terms the a that when of of terms year, June were but guidance how back think order June upon portends cost side, bounce I we both in in for in good QX. manifested we in on

if probably in shape balance year. Brad’s would for June’s we of the the here be got joke, we from good having out, the on just keep can So

is you the that color So give I it. can on about

Joe Ritchie

the Okay. Fair suspension. this I that suspension? follow-up enough. thinking you And a point deploying now about I I guess, thought guess be are going just how as you that, capital you your buyback and guys aggressive lifted have lifted to more are whether at you to

Richard Tobin

mean, the hierarchy I return. investment, same and then inorganic remains think investment Well, the of I organic capital

we CapEx safe have now. given I the for full is that the that think year number you relatively

and on that So right is go that encouraging if I comments, deploying going have relatively expect now be it is pipeline we I inorganic the back investment. address the sit here. said to to And and to we But that, think will to unable you having balance cash inorganic returns we capital second that if half. seek are the return inorganically then, on in capital not we the a depend get

Joe Ritchie

it. Got

sense. makes That Okay. you. in I will queue. Thank get back

Richard Tobin

Thanks.

Operator

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

Jeff Sprague

I versus than I I Good any is sure significant lift the just historical can some context more on am the normal? us typically of right. quarter may. just Good better kind be step, Thanks. was quarter, June you mean Hey, June May, would bad how quarter, morning here sequential everyone. one give of what if two

Richard Tobin

to know the don’t a we were You we around of – question, is at that function here answer everything because what, declines. look relative know that I

going about of a But So, COVID revenue significantly I if which my and – was April the the – in May, guys seasonality are a era. know. June Jeff, in this – don’t tells here, saw I furiously think I is XXXX relative decline less I mean, head, I we you top but than through of to lot that rate pages in guess the the

think Andrey one. with that going on have to that to is follow-up I you

Jeff Sprague

him. about some I We on calendar do Okay. actions. will questions here that I his on with think discussion temporary I am had earlier

incrementals? XX% I headwind maybe side the manage come guess thinking on on I this growth there? Is would as other there are side, zip manage think of Rich, or kind out about code that we you the from you on In it’s of way what how back. possibly clear back other significant going kind the think managing incrementals stuff to pretty this for kind to as of and they valley those are of coming you can context, back

Richard Tobin

overhang Other really no than accruals, that of there bonus is back. deferral to snap costs have of

there is, revenue it reduced I levels or earlier think it ‘XX think back expectation I and come cost Does a absolutely to supplies, as I is right. about there to not Dover mean, the I the just was question has everybody travel big everybody this of not, not. question, to think a percent

that proven thought ‘XX. business is exiting think run have spending, we this with discretionary we necessary I we can that may than have less

little our think variety quantum The early for reflected it’s guidance at the that to a we it of a sure. the be I look job in of bit furloughs what a things. you too managing of will and I rest admirable tell, whenever for but think that in give is So, we day, we – is, did ‘XX of the end

over kind are growth. friction else time the significant drag soon, anything So don’t perfect, run going any get hopefully to – we second that we be back incremental half. That’s or but expect industrial I negative to see don’t of It in our with should expectation. that to have my won’t once margins I

Jeff Sprague

if I last And one just one could.

there. kind M&A of So, is whether what there And stuff these the of of been pipeline? Thanks on in Should stuff across clearly have your question leave the bigger can a thinking get line. the the or it size lot. have you – now, some I be you like of similar front, it these recent in sounds it is the which bolt-ons some will sites we finish

Richard Tobin

there, is the some are the be There it’s going Actionable that competition. the what you size similar opportunities bigger bigger more out Sure. have seen. opportunity, to to

get returns So tighter.

But that have them the size front. half. can question kind we just in I that we see the pretty second year-to-date. on of, am a So of It’s will seen confident close on we

Operator

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

Julian Mitchell

on the in Hi. happened the Imaging segment, I and for see that fairly, X around with color margins sales. and the too the question gross ID much segment. what half Good decrementals didn’t outlook first morning. first on the margin just Slide given heavy Maybe

in in or that and in what saw versus we narrower help those maybe much QX QX? how you how us half So segment understand, see second decrementals the should be

Richard Tobin

They well, substantially from the In mean, the bigger should our start which our marking portion flat. of let’s margin margins I coding, segment, here. were that beginning is and –

year, So, all sequentially half. weakened printing. back look from segment was go And textile of second the in decremental if a margin last and the in take printing at that we textile

them long an decrementals easier fully comp. coding as in their the margin be performance should hold which do marking of can So, half, as to and expect second because we just less

Julian Mitchell

there the sort to maybe It’s switching waste then And you. very of a market. Thank the segment, had piece. DEP niche understand. multi-year been period of a handling I for somewhat strong

cycle, happen had have what So you wondered could the medium recent for what given already I thinking will happened what’s give what if there, kind are just context and term municipal budgets upgrade there any you us years. to you or around to in of

how that you gauge, in business Just so? are just optimistic beyond quarter the or trying next to

Richard Tobin

likely, foot. traded been you have of The if management structure. of manage on go I that think non-municipal profitability operators, CapEx has to into business be business because publicly they deferred of front some that We the have the consider business, that particular their cut headwinds at they they non-residential had would cost XXXX that business. their the bigger just on look own as

think we I its lot today rather crisis, but and side, considering negative even management action headwinds waiting of it’s accommodate of for is there that headwinds towns structure than because minute. today, there is taking coming think financing cost municipal of this COVID on cities some that don’t a of that last the the to bet I On the because and a see better than the

Julian Mitchell

first point, cost-out think had million the I Rich, you just on that And in why Thanks. Dover restructuring made, $XX aggregate. of charges half the that you in

it, if missed that Sorry the I what’s for placeholder for second number? but half the

Richard Tobin

look, variety We are a don’t actions. we on – working of

think will related am but the whether sure, it’s them the able the not all I we pipeline, even entirely got in bet give when to a done. half. that we we I But will second it get than footprint quantum charges or you then second I we some actions will in half several be take have better the related footprint action in not, probably

Julian Mitchell

Thank Understood. you.

Richard Tobin

Julian. Thanks,

Operator

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

Nigel Coe

segments curious of obviously Good than have guys. understand. But I give boundaries, be the ordering of you see elected the year of in second half am curious on, relative to completely the which rank kind not terms Thanks. in morning weakness. revenue would you how I I by rather strength any

unreasonable. see seem which to & do you quarter? doesn’t past, the you in similar has viewed in called Pumps been first Process how out leader, But world ranking think the the back you I the have Rich, the still

Richard Tobin

where don’t Page on And the think then quite moving had QX. is crisis – what businesses I that relative some terms where relatively the have Andrey that parts, X expect to to you on of we relative Look, nice kind frankly, we things parts got in you think arrows well. the Slide through to are have those of operated moving QX put because we are

it’s to on of of kind knew so far. in we Pumps the So, QX biopharma a the proven that as because and the to of got storm weather end Process we position Solutions, it’s was exposure & good the side,

our profits We for despite quite act the expectation full the the holding side. has be margins wait story this year-to-date. printing hold an business, coding, flat frankly, out industrial to are – ‘XX textile your hopefully had is, Look year it just just is to on when have you marking ‘XX the expected up, and it’s really excellent we end blown to have to and a rather headwind will pumps than what The story. a just market absolutely going that performance

think did we we of the the terms today resilience the of in the anything than at of different end individual in portfolio. relative I QX So pieces don’t that think

Nigel Coe

of Okay. nicely is Very about the clear. And Thanks. the end at then, cash building quite quarter. million $XXX

to But normally million unlikely capital, to if depending you $XXX be don’t between $X billion You going seems run year-end. you quarter. are close to on it the deploy million by $XXX somewhere

So to question going to higher – going $XXX do Where would asking etcetera, in going back us million? to run my here? comfortable, it So, from into feel a terms is view is am you million but $XXX cash not I it is, to ‘XX. cash you you curious be how buffer buyback the give number I of

Richard Tobin

cash I probability after of on up that of there. think of we need That’s then to to based mean, at will the the on I yield to look, for on not the are right. with payments and investment the day, negative sure. the down going Look, buffer But dividend think bunch And it Yes. inorganic for you sit future, one. a into that, I end going flex number be correct

as that because see If on happen we the right any to So you if on may the looks the the can can building that good. cash. don’t we I positive it year, that of weighting signal, QX, we cash think cash pipeline almost requirement we returning pipeline short-term probability be sit to are because because through it’s a means in end now at have we sit of the

Nigel Coe

or materials the then the this on chain? supply raw buffer to the things? inventories, majority decision inventory bulk the of build And that Right. quickly Or of is just a was. was it one Is conscious the of

Richard Tobin

on purely QX. going we the into have backlog that It’s

Nigel Coe

it. Got

Okay.

Richard Tobin

I So for come down in QX, a should expect some. industrial expectations in in inventory QX would barring in back revenue goods and that snap we inventory, finished inventory

Operator

you. Thank

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

Andrew Obin

you how Can Hi, Hi, yes. me? hear are you?

Richard Tobin

can here I you. Yes.

Andrew Obin

Yes.

chains talk second you do seen second about the of much supply just it Anyway can question supply chains you in chains, half? quarter. So in and how see to how quantify in have into supply you the inefficiency of terms on evolving terms

Richard Tobin

material QX. It was not a headwind in

have we Now, our supply relatively having of gun are did we the were that QX, constraints, we were making in for so wasn’t of a most But size like said lot areas short it chains under the considering in that, not our part individual performance. the businesses. terms production the

but it headwinds here in cost few was point a a view not had of we material from So, QX. and there,

Andrew Obin

it. Got

real in the for how no going changes second and do half you forward, business? So

Richard Tobin

the businesses, on depend at Well have look end the we because, day, I of well relatively it’s costs. all trajectory Yes. of input the on guess the done going of to

went as like raw able material So, and benefits be be in we will prices down, the seen. remains extract demand to some to

we have the I QX, got go then forward to into activity expect bit bought a and through up, can snaps to probably business think go up so we QX and dynamics. If prices probably cost transportation the we oil are like. little but watch to back,

an and basis, right cost now think right I eye keep a been but beneficiary, year-to-date. of we now, cost we So will have an input input on in terms

Andrew Obin

Got it.

talk Europeans up some catch terms trying to Just about Europe, think question, was COVID. back in a follow-up post May of there I in

or was year August. businesses I you about about summer that open talks staying Italian staying shutdown Can in VW different COVID? treat some with how will August an in you European think this open about talk anything give after interact update, there being just

Richard Tobin

a back have Andrew, I get will to you. get that’s to question. good Andrey to

think itself have and manifests consumer business. performance marking seen coding which goods in I on we decent the

a were we positive on at exited from I quarter. where of think the in the trajectory heat beginning exchangers, we

get a that industrial were had the But better and look very of automotive on and businesses of kind back that’s then – lack activity. word. So, of absolutely certain we you April and levels have aftermarket May portfolio to in I in the low for like to would applications,

two need months overly as low. think because but we to those I get June So, that relatively base don’t to excited improved, is relative

Andrew Obin

lot. Thanks I Andrey. will follow-up a with

Operator

Pokrzywinski Your Morgan next Josh question of comes from line of the Stanley.

Josh Pokrzywinski

morning guys. Good Hi.

Brad Cerepak

Good morning.

Richard Tobin

Josh. Hi,

Josh Pokrzywinski

both activity So we just the played will filled summarize mind? again How just a more if kind up you good amount the of squares. one you much I of levels? back kind will of outlook I don’t of really of I turning was the I go edge to and thing mean into improving, reopening improvement in if any guess here in try had versus on lights versus June, of kind ramping customers

Richard Tobin

Alright.

me. got have You

Josh Pokrzywinski

in I admit, it’s here. a little

Richard Tobin

market point that in end view. a May absolutely from shut businesses and lot of the of we had We are April

terms across of diverse, of Josh, it, end word, are just that we if about right lack a QX, applicable So when of and I any for why trajectory we saying hinges in portfolio you whether look going the so on to June talking our the to up portfolio. were guess, we basically have lot to ended is not and be of were about of better the the we reopening right, not a calling is this that’s it aspect or entire question were – but results we answer

a which, quite is frankly – extent. So a certain to strength

Josh Pokrzywinski

of for do I the backlog end you think about that at the the backlog lot second the plan then is know What need for depleted question, are going orders mean Is to of or us saying to kind year? the a of position, or year kind of basically shippable level does something be pick how talked plan a And term. a that obviously put today. better kind backlog guys of you second half and you guys about contemplating we in of lack is normal what depletion to normal the are exiting

Richard Tobin

of and for the building backlog be cycle it Belvacs today. into normal tends XXXX of world of lack where The Maags think, business in longer the the are a better – a they to I the long a lumpy. world, back cycle actually

side, cycle short is be short that going On cycle. the to more

depends the frankly. it trajectory year, between now and the of on end the quite So

this we But don’t year. Refrigeration if So businesses retailers that deplete in between we end change them bunch see of QX because – will expect of the around a would dynamics now and September, like to that’s have will a of speaking seasonality that generally a Christmas do certain changed the installs now, lot backlog the time.

businesses, cycle the the on longer as we deplete, we XXXX. right think into is now So I trajectory are building is good

QX, On guess when what but ones, the into the outlook I in end any cycle don’t I there. see is anomalies on it the to get depends QX short and revenue for of we

Josh Pokrzywinski

about I that backlog of sounds some Yes, to ‘XX. it. expense at the like the Got just the came wanted make sure nothing case. It conversion not that’s of

it leave will there. I Thanks. hear. to good So,

Operator

line of Our from will come RBC final Deane of Capital Dray Markets. the question

Deane Dray

morning Good you. everyone. Thank

Richard Tobin

Good morning.

Brad Cerepak

morning. Good

Deane Dray

Rich, second requirements, downturn, seller needs a talked Do reset. about meets that’s for And to there it Just a M&A already? think return follow-up you but process you for valuation expectations in your if on a outlook half. the the typically happened to be be

Richard Tobin

would think. like, is I Not as much as but it happening we

Deane Dray

Was circulated, just much... that that that books – are upon how getting is based

Richard Tobin

this, it of at some. are are goes on want have we still multiples you numbers circulated clearly – half there notion then that’s I but but – that away, that equity the look that we in public trading of trading the like it books the in and its was some. and private public that the greatly, looks this in equity improved quite markets well markets, I a lot segment being improved well. because see I improved whispered Yes. never is than but mean of but in so companies, And are not the then It’s about expectation, based better that market it’s it’s second because ‘XX, equity

Deane Dray

second strength conversions free free half Okay. That’s in some liquidating inventory then helpful. we this the on conversion free second cash flow see if the expect flow considering And are and the really quarter, for cash cash the your flow wouldn’t strong to half? of you

Richard Tobin

we highly evenly it’s QX, that, reverse demand historically, we not I growing are generate top year we expect where we that a been a the of QX, probably – year cash when look we would the inventories the because it’s past line, the the will bit constant, in Well, caveat draw expect have year. of may it’s proportion if my to flow more balanced full expectation improves bit the we is, number. revenue have probably in mean, this just remain in down but significant of Hopefully, if been QX, to this the way proportionately our seasonality little half you quite second lower which is a to with been but in levered but

Brad Cerepak

Yes.

Deane Dray

And sanitary clarify then related exposed it. to is pumps COVID last could in business pumps? you Got your pharma, on one biopharma anything business, the whether just the

Richard Tobin

been particular that going to Day September piece an biopharma, and exposed a we what business Investor growth. August, that’s material early sometime, do around TBD? late is has Andrey are of to when driving the It And it

Andrey Galiuk

Yes.

Richard Tobin

more Where we give on color it. will you

Deane Dray

Terrific. you. Thank

Operator

conference concludes question-and-answer our call. That you. period Dover’s and Thank earnings XXXX quarter second

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

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.