Slide 1: Dover Corporation Fourth Quarter 2006 Conference Call Presentation
Dover Corporation Fourth Quarter 2006 Conference Call Presentation January 31, 2007 8:00 a.m. Eastern
Slide 2: Forward Looking Statements
Forward Looking Statements We want to remind everyone that our comments may contain certain 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 10K for a list of factors that could c
Slide 3: Dover's 2006 Performance
Dover’s 2006 Performance Continuing Earnings Per Share 2006 Highlights Y/Y 0.80 0.75 Revenue $6.5B +22% 0.70 EPS $2.94 +34% 0.65 $2.94 0.60 Organic Growth 13.8% 0.55 0.50 Segment Margin 14.9% +1.1% 0.45 $2.19 0.40 Operating Leverage 20.0% 0.35 $1.77 Free Cash Flow $690M +59% 0.30 0.25 0.20 • Revenue
Slide 4: 2006 Results from Continuing Operations
2006 Results from Continuing Operations 2006 2005 % Change Revenue $6,511 $5,333 22% EBT 822 607 35% Earnings 603 446 35% Bookings 6,656 5,557 20% Backlog 1,341 1,111 21% EPS 2.94 2.19 34% Stock option expense was $17.2 million, net of tax or $0.08 EPS for the year ended December 31, 2006. ($ in mil
Slide 5: Q4 Results from Continuing Operations
Q4 Results from Continuing Operations Q4 2006 Q4 2005 % Change Revenue $1,714 $1,431 20% EBT 201 163 23% Earnings 156 121 28% Bookings 1,661 1,481 12% Backlog 1,341 1,111 21% EPS 0.76 0.60 27% Stock option expense was $4.0 million, net of tax or $0.02 EPS in Q4 2006 ($ in millions except per share f
Slide 6: 2006 Strategic Initiatives
2006 Strategic Initiatives Finalize portfolio review process Drive internal improvements with PerformanceCOUNTS Focus on organic growth initiatives Grow with platform building acquisitions Build our base of talented employees 6
Slide 7: A Revitalized Portfolio
A Revitalized Portfolio Over the past two years: Discontinued 20 businesses; 5 in Technologies Represented $1.1B of revenue at 5% margins Sold 14 with net proceeds of $605M Net result: Greater clarity to Dover’s growth platforms Exited a number of volatile capital goods businesses Quality of por
Slide 8: PerformanceCOUNTS
PerformanceCOUNTS Target 2006 2005 Inventory Turns 8 6.5 5.7 Earnings Growth 10% 35% 23% Operating Margins 15% 14.9% 13.8% WC as a % of Revenue 20% 18.9% 20.7% ROI (Operating) 25% 27.5% 23.2% Dover exceeded 3 out 5 metrics for the full year 8
Slide 9: Value Creating Acquisitions
Value Creating Acquisitions 2005 – 2006 Activities Invested $2.2B in 17 new companies $1.2B of revenue at ≈15% operating margins Enhanced key growth platforms Product Identification Electronic Test Material Handling Oil & Gas Electronic Components Focusing on larger acquisitions Produc
Slide 10: Q4 & YTD 2006 Organic Revenue Growth
Q4 & YTD 2006 Organic Revenue Growth Q4 Full Year 25% 20% 21.3 18.7 15% 18.4 16.4 14.6 10% 13.8 12.6 10.8 5% 7.2 9.5 9.6 4.7 7.1 3.7 0% 4.7 DDI DEL DII DRI DSI DTI DOVER Q4 FY Q4 FY Q4 FY Q4 FY Q4 FY Q4 FY Q4 FY Acquisition - - 1.7 40.0 - - 20.2 8.0 - - 12.6 7.5 8.3 7.8 FX 3.3 0.6 1.6 - 0.8 0.1 1.1
Slide 11: Dover Resources
Dover Resources ($ in millions) Q4 2006 Q4 2005 % Change FY 2006 FY 2005 % Change Revenue $517.1 $395.2 31% $1,841.5 $1,518.9 21% Earnings $76.0 $67.3 13% $316.3 $260.7 21% Op. Margin 14.7% 17.0% 17.2% 17.2% Quarter Oil and Gas Equipment Group: Energy prices have moderated - business continues str
Slide 12: Dover Technologies
Dover Technologies ($ in millions) Q4 2006 Q4 2005 % Change FY 2006 FY 2005 % Change Revenue $344.5 $287.2 20% $1,313.5 $1,033.9 27% Earnings $46.1 $39.5 17% $206.7 $135.0 53% Op. Margin 13.4% 13.8% 15.7% 13.1% Quarter Automation & Measurement (A&M): Earnings reflect favorable prior year comparabl
Slide 13: Dover Electronics
Dover Electronics ($ in millions) Q4 2006 Q4 2005 % Change FY 2006 FY 2005 % Change Revenue $233.0 $194.6 20% $880.7 $546.0 61% Earnings $37.2 $20.2 84% $119.4 $46.9 155% Op. Margin 16.0% 10.4% 13.6% 8.6% Quarter Components: Broad growth led by frequency control and micro acoustic businesses. Co
Slide 14: Dover Industries
Dover Industries ($ in millions) Q4 2006 Q4 2005 % Change FY 2006 FY 2005 % Change Revenue $231.2 $207.3 12% $876.5 $818.0 7% Earnings $35.1 $29.8 18% $124.0 $104.3 19% Op. Margin 15.2% 14.4% 14.1% 12.7% Quarter Mobile Equipment Group: Continued strength in the transport and waste-handling markets
Slide 15: Dover Systems
Dover Systems ($ in millions) Q4 2006 Q4 2005 % Change FY 2006 FY 2005 % Change Revenue $201.9 $174.7 16% $834.9 $705.4 18% Earnings $23.9 $21.9 9% $114.1 $100.1 14% Op. Margin 11.8% 12.5% 13.7% 14.2% Quarter Food Equipment: Leverage reflects normal seasonality in foodservice companies. Packagin
Slide 16: Dover Diversified
Dover Diversified ($ in millions) Q4 2006 Q4 2005 % Change FY 2006 FY 2005 % Change Revenue $190.3 $176.3 8% $778.1 $722.1 8% Earnings $19.8 $21.0 -6% $90.1 $87.6 3% Op. Margin 10.4% 11.9% 11.6% 12.1% Quarter Process Equipment: Heat exchanger and energy markets drove growth. Industrial Equipment
Slide 17: Fourth Quarter Overview
Fourth Quarter Overview Capital Expenditures: $195 million, up $64 million (+49%) over prior year primarily in the Oil and Gas and Electronic components groups. Net Debt to Capital Ratio 2006 vs. 2005: 26.8% and 28.9%, respectively. Decrease reflects strong free cash flow and proceeds from dispo