Dover Corporation First Quarter 2008 Conference Call. April 23, :00 a.m. Eastern

Transcription

1 Dover Corporation First Quarter 2008 Conference Call April 23, :00 a.m. Eastern

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 10K for a list of factors that could cause our results to differ from those anticipated in any such forward looking statements. We would also direct your attention to our internet site, where considerably more information can be found. 2

3 Dover s Q Performance Continuing Earnings Per Share $3.22 $2.88 $2.12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Revenue $1.9B $1.7B +8% EPS $0.76 $ % Segment Margins 14.1% 13.5% 60 bps Organic Growth 2.8% 4.0% Acquisition Growth 1.8% 12.8% Free Cash Flow $104M $18M 5.8x Business activity remains strong across the portfolio Book-to-bill was 1.06 Q1 08 Q1 07 Q/Q Organic growth of industrial companies was 3.2% Energy, Fluid Solutions and Product ID platforms performing at a high level Positive leverage at 3 of 4 segments Historically strong 1st quarter free cash flow at 5.6% of revenue Share repurchase activities on target 3

4 Industrial Products Mobile Equipment (13% of Dover) Revenue increase due to strong aerospace, military and oil field sales Earnings driven by volume and cost reductions Backlog up 15% vs. prior year, Book-to-bill of 1.09 Material Handling (18% of Dover) Business is mixed, strong international, infrastructure and military sales; U.S. automotive and construction remains challenged CAMCO acquisition by De-Sta-Co: sales integration complete Lantec acquired by Tulsa Winch in March 2008 integration begun 4 Revenue $583 $551 6% Operating Earnings $76 $70 8%

5 Engineered Systems Engineered Products (16% of Dover) Strong performance in refrigeration systems & cases, heat exchangers Tough comps in beverage can equipment Product Identification (12% of Dover) Revenue increase driven by double-digit gains in direct coding business Earnings reflect cost savings realized from Markem Imaje integration activities, offsetting $3M in related expense Strong order backlog entering second quarter. 5 Revenue $522 $492 6% Operating Earnings $51 $64 25%

6 Fluid Management Energy (12% of Dover) Results driven by growth in U.S. oil and gas drilling and worldwide demand for power generation Operational improvements and product mix increased earnings and margins Fluid Solutions (10% of Dover) General strength across most industrial markets Business mix and operational focus improved earnings and margins Backlog up 30%. Revenue $401 $359 12% Operating Earnings $85 $74 15% 6

7 Electronic Technologies Electronic Technologies 19% of Dover Business activity is mixed across the segment with book-to-bill of 1.02 Continued investments in new products $3M restructuring charges in the quarter (primarily severance) Impact of restructuring should result in $7 million of savings for remainder of year Inflationary pressures in Asia (mainly China) from currency and other costs impacted margins by 100 bps 7 Revenue $352 $321 10% Operating Earnings $37 $36 2%

8 Geographic Revenue Mix (Q1 2008) Rest Of World 10.5% Dover Growth Rate: 8% 25.5% 6.5% ASIA 12.6% Europe 21.5% 6.1% United States 55.4% 5.5% Growth in Asia was driven by increases in Electronic Technologies and Engineered Systems 8 First Quarter Growth Rate

9 Revenue Growth (Q1 2008) Industrial Products Engineered Systems Fluid Management Electronic Technologies Total Dover Organic 1.1% 2.4% 7.7% 1.0% 2.8% Acquisition 3.6% 0.0% 1.5% 2.0% 1.9% Currency 1.2% 3.8% 2.6% 6.5% 3.2% Total 5.9% 6.2% 11.8% 9.5% 7.9% 9

10 PERFORMANCECOUNTS Target Q Q Inventory Turns * Earnings Growth 10% 8.8% 5.0% Operating Margins 15% 14.1% 13.5% WC as a % of Revenue 20% 19.1% 19.2% ROI (Operating) 25% 25.8% 25.9% * Dover has improved inventory turns four consecutive years 10

11 First Quarter 2008 Overview Net Debt to Capital Ratio 28.0%: up 60 bps over 2007 year-end, reflective of higher total debt level to fund share repurchase program Free Cash Flow $103.7 million; 5.6% of revenue Historically high for the 1 st quarter Effective Tax Rate 29.5%, up 120 bps Prior year benefited from discrete event and extension of R&D credit. Acquisitions One add-on by Tulsa Winch (Lantec Winch and Gear Inc.) for $22 million, net of cash acquired. Share Repurchase Program Repurchased 3.6 million shares for $150 million. 11

12 2008 Outlook Full Year Organic growth: mid single digits Margin improvement: Full year up bps Capital expenditures: $150 $175 million Interest expense: $88 - $92 million Full-year tax rate: 27% 28% (quarterly variance) Free cash flow for full year: 10% of revenue Corporate expenses: $95 - $100 million Share repurchases remaining: $312 million 12