Slide 1: Dover Corporation Third Quarter 2009 Conference Call
Dover Corporation Third Quarter 2009 Conference Call October 23, 2009 9:00 am
Slide 2: Forward Looking Statements
2 Forward Looking Statements We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties. We caution everyone to be guided in their analysis of Dover Corporation by referring to our Form 10-K for a list of factors that could cause
Slide 3: Dover's Q3 2009 Performance
3 Dover's Q3 2009 Performance Continuing Earnings Per Share 2006 2007 2008 $2.90 $3.30 $3.67 Revenue $ 1.5B -24% EPS (continuing) $0.58 -43% Segment Margins 14.3% -160 bps Organic Revenue - 24% Net Acquisition Growth 2% Free Cash Flow $222M -27% Quarterly revenue and earnings declines reflected cont
Slide 4: Revenue Q3 2009
4 Revenue Q3 2009 Industrial Products Engineered Systems Fluid Management Electronic Technologies Total Dover Organic -36% -9% -30% -19% -24% Net Acquisitions (A) - 12% - (B) -3% 2% Currency -1% -4% -2% -2% -2% Total -37% -1% -32% -24% -24% (A) Acquisition growth was 3.3% for Q3 before dispositions
Slide 5: Performance Counts
5 PERFORMANCECOUNTS Target Q3 2009 Inventory Turns 8.0 6.2 Earnings Growth 10% - 44% Segment Operating Margins 15% 14.3% WC as a % of Revenue <20% 20.3% ROI (Operating) 25% 20.2%
Slide 6: Sequential Results - Q3
6 Sequential Results - Q3 Material Handling Fluid Solutions Mobile Equipment Energy Product Identification Engineered Products ^ 3% ^ 11% ^ 5% Electronic Technologies 154 230 154 242 193 274 212 274 212 309 157 138 164 145 246 275 600 500 400 300 200 100 126 246 162 192 206 260 213 258 159 133 166 1
Slide 7: Industrial Products
7 Industrial Products Revenue ($ in millions) Operating Earnings ($ in millions) ^ 36% ^ 37% ^ 59% ^ 49% Lower revenue primarily driven by continued weakness in infrastructure, automotive and energy end-markets Restructuring actions helped dampen effects of low volume Quarterly bookings down 5% sequ
Slide 8: Engineered Systems
8 Engineered Systems Revenue ($ in millions) Operating Earnings ($ in millions) ^ 11% ^ 1% Revenue gains from Tyler acquisition ($65M) were offset by weakness in most other end- markets; Sequentially, revenue up 11% Operating margin improved 270 basis points sequentially driven by volume improvement
Slide 9: Fluid Management
9 Fluid Management Revenue ($ in millions) Operating Earnings ($ in millions) ^ 28% ^ 32% ^ 33% ^ 41% Year-over-year revenue decrease driven by substantially lower volume, though sequential revenue growth of 5% indicates stability Quarterly operating margin was still strong at 19.6% driven by ongoin
Slide 10: Electronic Technologies
10 Electronic Technologies Revenue ($ in millions) Operating Earnings ($ in millions) ^ 33% ^ 24% ^ 69% ^ 29% Revenue decline driven by significantly weaker volume in most served markets, partially offset by growth at Knowles; Sequential revenue improved 12% Operating margin sequentially improved 66
Slide 11: Geographic Revenue Mix
11 Geographic Revenue Mix (9 months ended September 30, 2009) YTD Dover Growth Rate: -27% YTD 2009 Growth Rate - -26.6% - -24.8% - -33.8% - -25.0%
Slide 12: Q3 2009 Overview
Q3 2009 Overview Q3 2009 YTD 2009 Free Cash Flow $222.0 million, 15% of revenue $470.8 million, 11% of revenue Net Interest Expense $26.3 million, up $400K from lower interest income due to lower rates $73.5 million, down $3.2 million YTD reflecting lower debt levels Net Debt to Capital 18.7%, down
Slide 13: Restructuring Update
Restructuring Update 13 Highlights Fourth quarter restructuring activity reflects continuation of our previously announced plans Engineered Systems will execute on plan to take cost out of Product Identification platform FY Savings Savings from 2009 programs still on track for $125M Incremental savi
Slide 14: 2009 Guidance - Unchanged
14 2009 Guidance - Unchanged Revenue: Core revenue: ^ (21% - 23%) Impact of FX: ^ ( 3%) Total revenue: ^ (24% - 26%) Capital expenditures: $100 - $120 million Interest expense: $97 - $100 million Full-year tax rate: 25% - 26% Free cash flow for full year: > 10% of revenue Corporate expense: $115 mil