DOVER REPORTS FOURTH QUARTER AND FULL YEAR 2004 RESULTS
Resource from: www.dover.com Likes:2963
Feb 04,2005
New York, New York (January 25, 2005). Dover Corporation (NYSE: DOV) earned $409.1million or $2.00 diluted earnings per share (EPS) from continuing operations for the full year2004, compared to $285.2 million or $1.40 EPS from continuing operations in 2003, an increase
of 43%. Net earnings for the full year of 2004 were $412.8 million or $2.02 EPS, including $3.6million of earnings or $.02 EPS from discontinued operations, compared to $292.9 million or$1.44 EPS, for 2003, which included $7.7 million or $.04 EPS in earnings from discontinuedoperations. Sales for the full year of 2004 were a record $5,488.1 million, an increase of 24%as compared to $4,413.3 million for last year.
For the fourth quarter, Dover’s earnings increased to $98.8 million or $.48 EPS from continuing operations, compared to $80.7 million or $.39 EPS from continuing operations in the comparable period last year, an increase of 22%. Net earnings for the fourth quarter of 2004
were $97.1 million or $.48 EPS, which included $1.7 million of losses from discontinued operations or less than $.01 EPS, compared to net earnings of $76.3 million or $.37 EPS for the fourth quarter of 2003, which included $4.4 million or $.02 EPS in losses from discontinued
operations. Sales in the fourth quarter of 2004 were $1,421.2 million, an increase of 19% as compared to $1,198.0 million for the fourth quarter last year. Commenting on the results and the current outlook, Ronald L. Hoffman, Dover’s Chief Executive Officer, said: “Dover had a great year in 2004, recording the highest sales and second highest net earnings from continuing operations in our company’s history. In fact, all three industrial subsidiaries set sales records, and all four segments had double-digit gains in sales and earnings. Our outstanding performance reflects our success in driving continued improvements in operating effectiveness, a strong mid-year recovery in the Technologies segment and positive
contributions from the strategic acquisitions we made in 2003. Dover’s operating management deserves a lot of credit for their continued investment in new products, strong R&D activities,emphasis on global expansion, and overall operational excellence which enhanced our
competitiveness and contributed to positive operating leverage. It is particularly noteworthy that they were able to achieve these results in spite of meaningful increases in raw material costs, particularly steel, higher energy costs, and foreign exchange challenges affecting many of our increasingly global companies.
“Equally important in 2004 was the success of our acquisition program. We spent $514 million for eight companies, our highest spending level since 1999, and the third highest level ever.
The average purchase price for the four largest businesses we acquired last year was over $100 million. This is consistent with our previously stated intent to focus on fewer larger
opportunities. We believe all of these companies will make positive contributions to our 2005 full year results, and, given the level of M & A activity we are seeing in the pipeline, we are optimistic that our program will be similarly robust in 2005. It is also worth noting that about half of the 49 companies in Dover are now generating over $100 million in revenues, a testament to our internal growth initiatives, as well as the impact of our “add-on” acquisitions program.
“Beginning with our first quarter 2005 earnings announcement, we will report Dover’s results in six segments and discuss our companies in 13 groups. We believe this new operating structure
will improve our focus on common end markets served, enhance opportunities to realize synergies across our businesses and further optimize our growth initiatives. We remain quite optimistic that 2005 will be another growth year in the industrial sector, given the current strong backlogs coupled with our new product initiatives, responsive customer service and an expanding focus on global sourcing. However, we don’t anticipate as significant an increase as
we experienced in 2004. Our core technology companies face more uncertain conditions,particularly given the significant market softness experienced in the fourth quarter.
Nevertheless, we have confidence in the substantial new product developments that are well underway in those companies, and expect them to be increasingly successful at anticipating
and meeting the needs of their markets over the long term.”
Diversified fourth quarter results over the prior year, with positive earnings comparisons at nine of its twelve operating companies. Significant contributors were Belvac,
Crenlo, Tranter PHE and Mark Andy, all of which had favorable sales and earnings comparisons to prior year performance. Hill Phoenix continues to be the largest contributor to earnings despite the fact that its earnings were only slightly above prior year as rising material costs offset productivity gains and cost reductions. Overall, total bookings at Diversified were up 15% in the fourth quarter. Ten of twelve operating companies reported bookings increases, most notably Belvac, Crenlo and Hill Phoenix and year-end backlog rose by 32%.
For the full year, Diversified’s improved results reflected sales increases at 11 of the 12 companies. In particular, Hill Phoenix, Crenlo, PMI, Sargent, Tranter PHE and SWEP all had solid results, and, together with a strong finish at Belvac, generated most of the year’s earnings and earnings growth. The largest earnings improvements were achieved at Crenlo, Mark Andy, Graphics Microsystems and Hydratight Sweeney, all of which significantly improved their margins through productivity gains and increased sales volumes. Hill Phoenix grew its business by expanding its customer base and ended the year with record sales and bookings. It also had
its second-best earnings to date, falling just short of last year’s record results, despite an unprecedented rise in commodity costs. Sargent also reported record sales, bookings and backlog, fueled by the strong recovery of both the commercial and U.S. defense aerospace
markets. Performance Motorsports had a record year in sales and earnings, driven mainly by improved professional automotive racing markets in North America, particularly NASCAR. Due to a healthy heat exchanger market, SWEP and Tranter PHE increased sales and bookings for the year. However, their margins were lower due to significant raw material price increases.
Crenlo achieved the largest year-over-year earnings improvement, and the strength of its cab market increased bookings by 58% and year-end backlog by 49%. Overall, Diversified enters 2005 with a record backlog, with 10 of 12 companies at higher levels than last year.
Three Months Ended December 31, Twelve Months Ended December 31,
Industries’ fourth quarter results exceeded the prior year’s performance with positive earnings comparisons at half of its 12 operating companies. While earnings continued to be negatively
impacted by higher steel costs, pricing moves taken throughout the year lessened the impact as compared to previous quarters. The largest contributors to the quarterly earnings increase were
Heil Environmental due principally to increased municipal sales; Triton with record sales driven by new products and market expansion; Tipper Tie with improving U.S. results and strong overseas performance; and Chief with new pulling products and robust demand for measuring equipment. Offsetting these gains were earnings declines at DI Foodservice, PDQ and Heil Trailer.
For the full year, Industries’ earnings increased 14% despite higher steel costs which reduced margins. Sales were up 17% and revenue has now grown for seven consecutive quarters. The largest contributors were Heil Trailer, Heil Environmental, Rotary Lift, PDQ, Tipper Tie, Triton and Marathon. Heil Environmental increased its share of the refuse collection vehicle market in a flat to slightly declining market. Rotary’s sales increased 19% driven in part by share gains in the two-post automotive lift market, although earnings were negatively impacted by rising steel costs and pricing pressures from low-priced Asian imports. PDQ had a strong year with earnings slightly below 2003’s record levels. Strong international sales contributed to Tipper Tie’s gains. During 2004, Triton produced its 100,000th ATM while achieving sales of over20,000 units, helped by major retail and financial institutions, and global customers. Strong baler sales drove Marathon’s performance. The only significant earnings offset was at DI Foodservice which saw volume decline coupled with a number of adverse accrual adjustments.
(www.dover.com)
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