<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 31, 1997
OR
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________________ to _________________.
Commission File No. 1-4018
DOVER CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 53-0257888
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
280 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(212) 922-1640
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, par value $1. New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Title of class
--------------
None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past ninety days. Yes |X| No |_|
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. |_|
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of the close of business February 27, 1998 was $8,096,264,234.
Registrant's closing price as reported on the New York Stock Exchange-Composite
Transactions for February 27, 1998 was $38.625 per share.
The number of outstanding shares of the Registrant's common stock as of February
27, 1998 was 222,891,535.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I,II, and IV - Certain portions of the Annual Report to Stockholders for
Fiscal Year Ended December 31, 1997 (the "1997 Annual
Report").
Parts II, and III - Certain portions of the Proxy Statement for Annual Meeting
to be held on April 28, 1998 (the "1998 Proxy Statement").
Forward Looking Statements
This Prospectus and the documents that are incorporated by
reference, particularly sections of any Annual Report to Stockholders under the
headings "Outlook" or "Management's Discussion and Analysis", contain
forward-looking statements within the meaning of the Securities Act and the
Exchange Act. Such statements relate to, among other things, industries in which
the Company operates, the U.S. economy, earnings, cash flow and operating
improvements and are indicated by words or phrases such as "anticipates,"
"supports," "plans," "projects," "expects," "should," "hope," "forecast," "Dover
believes," "management is of the opinion" and similar words or phrases. Such
statements may also be made by management orally. Forward-looking statements are
subject to inherent uncertainties and risks, including among others: increasing
price and product/service competition by foreign and domestic competitors,
including new entrants; technological developments and changes; the ability to
continue to introduce competitive new products and services on a timely, cost
effective basis; the mix of products/services; the achievement of lower costs
and expenses; domestic and foreign governmental and public policy changes
including environmental regulations; protection and validity of patent and other
intellectual property rights; the continued success of the Company's acquisition
program; the cyclical nature of the Company's business; and the outcome of
pending and future litigation and governmental proceedings. In addition, such
statements could be affected by general industry and market conditions and
growth rates, and general domestic and international economic conditions
including interest rate and currency exchange rate fluctuations. In light of
these risks and uncertainties, actual events and results may vary significantly
from those included in or contemplated or implied by such statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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PART I
Item 1. BUSINESS
General
Dover Corporation ("Dover" or the "Company"), originally
incorporated in 1947 in the State of Delaware, is a diversified industrial
manufacturing corporation encompassing over 46 operating companies which
manufacture a broad range of specialized industrial products and sophisticated
manufacturing equipment.
The Company's businesses are divided into five business segments.
Dover Diversified builds assembly and production machines, heat transfer
equipment, and specialized compressors, as well as sophisticated products and
food refrigeration and display cases, as well as products for use in the
defense, aerospace and other industries. Dover Elevator manufactures, installs
and services elevators primarily in North America. Dover Industries makes
products for use in the waste handling, bulk transport, automotive service,
commercial food service and machine tool industries. Dover Resources
manufactures products primarily for the automotive, fluid handling, petroleum
and chemical industries. Dover Technologies builds sophisticated automated
assembly equipment for the electronics industry, industrial printers for coding
and marking and, specialized electronic components.
The Company emphasizes growth and strong internal cash flow. It has
a long-standing and successful acquisition program pursuant to which, from
January 1, 1993 through December 31, 1997, the Company made 60 acquisitions at a
total acquisition cost of $1.375 billion. For more detail regarding acquisitions
over the past several years, see page 4 of the 1997 Annual Report as well as
Note 2 to the Consolidated Financial Statements on pages 27-28 of the 1997
Annual Report, which are hereby incorporated by reference. These acquisitions
have had a substantial impact on the Company's increase in sales and earnings
since 1993. The Company's acquisition program traditionally focused on acquiring
new or stand-alone businesses. However, since 1993, increased emphasis has been
placed on acquiring businesses which can be added on to existing operations. In
1997, the Company completed 2 stand-alone and 15 add-on acquisitions at a total
cost of about $261 million. The Company aims to be in businesses marked by
growth, innovation and higher than average profit margins. It seeks to have each
of its businesses be a leader in its market as measured by market share,
innovation, profitability and return on assets.
The Company practices a highly decentralized management style. The
presidents of operating companies are very autonomous and have a high level of
independent responsibility for their businesses and their performance. This is
in keeping with the Company's operating philosophy that small independent
operations are better able to serve customers by focusing closely on their
products and reacting quickly to customer needs. The Company's executive
management becomes involved only to guide and manage capital, assist in major
acquisitions, evaluate, motivate and, if necessary, replace operating
management, and provide selected other services.
Dover Diversified manufactures equipment and components for
industrial, commercial, and defense applications. The largest operations are
Belvac, acquired in 1993 (can-making machinery), Tranter (process industry heat
exchangers), A-C Compressor, acquired in 1992, and expanded in 1997 with the
acquisitions of Preco and Conmec (process industry compressors), and Hill
Phoenix, acquired in 1993-94 (refrigeration cases and systems for supermarkets).
Other Dover Diversified businesses produce such products as fluid film and
self-lubricating bearings, metal and fabric expansion joints, submarine and
aircraft hydraulic controls, remote manipulators and industrial cleaning
equipment.
Dover Elevator is the nation's largest manufacturer and installer,
and one of the largest servicers, of elevators for low- and mid-rise buildings.
Dover Elevator also participates in the high-rise market for new equipment and
service. Dover Elevator also sells and services elevators in foreign markets,
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principally in Canada and Asia. Somewhat less than half of Dover Elevator's
sales and almost all of its profits are generated by the service business. In
1997, Dover Elevator sold its German and U. K. operations for a gain of $32
million, based upon its analysis that they did not represent a sufficiently
strong base for developing a meaningful position in Europe.
Dover Industries manufactures a diverse mix of equipment and
components for use in the waste handling, bulk transport, automotive service,
commercial food service, machine tool and other industries. The largest
operations are Heil, acquired in 1993 (trailerized tanks and refuse collecting
vehicles), Tipper Tie (clip closures for food packaging), Marathon, (solid waste
compaction, transporting and recycling equipment), Rotary Lift (automotive
lifts), DovaTech (welding, cutting and laser equipment and supplies) and Groen
(food service equipment). Other Dover Industries operations produce auto
collision measuring and repair systems, commercial refrigeration, welding
torches, plasma cutting products and screw machines.
Dover Resources manufactures components and equipment primarily for
the automotive, fluid handling, petroleum and chemical industries. Its largest
businesses are De-Sta-Co (compressor valves and workholding devices), OPW
Fueling Components (gasoline nozzles and related service station equipment), and
Blackmer (rotary vein and progressive cavity pumps and gas compressors). In late
1996, Dover Resources acquired Tulsa Winch, a producer of winches and speed
reducers and in 1997 Hydro Systems (cleaning chemical dispensing equipment).
Also in 1996, Wittemann, part of Dover Resources, made an "add-on" acquisition
of Realcold, a manufacturer of merchant CO2 and refrigeration systems. Other
Dover Resources companies produce liquid monitoring, filtration and control
systems, oil and gas production equipment, and other valve, instrumentation and
control systems and products. During 1997, two Dover Resources Companies made
three "add-on" acquisitions. Blackmer acquired Mouvex, a leading French producer
of positive displacement pumps and De-Sta-Co Industries made two smaller
acquisitions of producers of automation devices.
Dover Technologies sells assembly equipment, screen printers, and
soldering machines for the printed circuit board industry, as well as components
for communications (including wireless) and military applications. The most
significant business in this segment is Universal Instruments which, in 1997,
accounted for almost half of Technologies' sales. In 1997 Universal Instruments'
sales were the highest in its history and operating profit rebounded from 1996
and nearly equaled 1995's record results. Universal Instruments is the world's
largest producer of thru-hole printed circuit board assembly equipment, as well
as a significant manufacturer of surface mount printed circuit board assembly
equipment. During 1996, Dover Technologies sold Measurement Systems, Inc., a
manufacturer of manual positioning controls. In the third quarter of 1996,
Quadrant, which is part of Dover Technologies, acquired KVG, a manufacturer of
high frequency crystals and oscillators. In November 1996, Dover Technologies
acquired Everett Charles Technologies, based in Pomona, California. Everett
Charles is the leading producer of machines for the testing of circuitry on
printed circuit boards before the boards are populated with components. In
addition, it is the leader in design and manufacture of text fixtures for
populated boards and the largest producer of spring-loaded test probes, which
are used in both bare-board and populated-board testing. Late in 1997, Soltec
acquired Vitronics, a U.S. based manufacturer of reflow soldering ovens.
Dover sells its products and services both directly and through
various distributors, sales and commission agents and manufacturers
representatives, in all cases consistent generally with the custom of the
industry and market being served. For more information on these segments and
their products, sales, markets served, earnings before tax and total assets for
the six years ended December 31, 1997, see pages 8-22 and 33-34 of the 1997
Annual Report, which are hereby incorporated by reference.
Raw Materials
Dover's operating companies use a wide variety of raw materials,
primarily metals and semi-processed or finished components, which are generally
available from a number of sources. Temporary shortages may occur occasionally,
but have not resulted in business interruptions or major
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problems, nor are any such problems anticipated. To date, fluctuations in the
cost of raw materials have not had a material impact on operating profits.
Research and Development
Dover's operating companies are encouraged to develop new products
as well as upgrade and improve existing products to satisfy customer needs,
expand sales opportunities, improve product reliability and reduce production
costs. During 1997, approximately $114.4 million was spent on research and
development, compared with $98.9 million and $94.4 million in 1996 and 1995,
respectively.
Intellectual Property
Dover holds or is licensed to use a substantial number of U.S.
patents covering a number of its product lines, and to a far lesser degree
patents in certain foreign countries where it conducts business. Dover licenses
some of its patents to other companies for which it collects royalties which are
not significant. These patents have been obtained over a number of years and
expire at various times. Although patents in the aggregate are important to
Dover, the loss or expiration of any one patent or group of patents would not
materially affect Dover or any of its segments. Where patents have expired,
Dover believes that its commitment to leadership in continuous engineering
improvements, manufacturing techniques, and other sales, service and marketing
efforts are significant to maintaining its general market leadership position.
Many of the Company's products are sold under various registered and
unregistered trademarks and tradenames owned or licensed by the Company. Among
the most significant are: A-C Compressor, Blackmer, De-Sta-Co, Davenport, DEK,
Dover, Duncan, Everett Charles, Groen, Heil, Imaje, Marathon, Norris, OPW,
Rotary Lift, Sargent, SWEP, Tipper Tie, Tranter and Universal.
Seasonality
Dover's operations are generally not seasonal, although performance
tends to be stronger in the second and fourth quarters of the year.
Customers
Dover's businesses serve thousands of customers, no one of which
accounted for more than 10% of sales in 1997. Within each of the five segments,
no customer accounted for more than 10% of segment sales in 1997.
Backlog
Backlog generally is not considered a significant factor in Dover's
businesses, as most products have relatively short delivery periods. It is more
relevant to those businesses which produce larger and more sophisticated
machines, or have long-term government contracts, primarily A-C Compressor,
Belvac, Dover Elevator International, Heil Trailer, Mark Andy, Sargent Controls
and Universal.
Total Company backlog as of December 31, 1997 and 1996 was $1,103
million and $871 million, respectively.
Competition
Dover's competitive environment is complex because of the wide
diversity of products manufactured and markets served. In general, Dover
companies are market leaders which compete with only a few companies where the
key competitive factors are customer service, product quality and
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innovation. In addition, since most of Dover's manufacturing operations are in
the United States, Dover usually is a more significant competitor domestically
than in foreign markets.
In the Elevator segment, Dover competes for the manufacture and
installation of elevators with a few generally large multinational competitors
and maintains a strong domestic position. Its primary competitors are Otis,
Westinghouse/Schindler and Montgomery/Kone. For service work, there are numerous
local, regional and national competitors.
In the Technologies segment, Dover competes globally against a few
very large companies, primarily based in Japan or Europe. Its primary
competitors are Japanese producers, including Fuji Machine, Panasonic and TDK.
Within the other three segments, competition is primarily domestic,
although an increasing number of Dover subsidiaries see more international
competitors and several serve markets which are predominantly international,
particularly A-C Compressor, Alberta Oil Tool, Belvac, Civacon, CRL, De-Sta-Co,
Duncan, Norris, OPW Fueling Components, Ronningen-Petter, Tipper Tie Technopak,
Tranter and Wittemann.
International
For foreign sales and assets, see Note 15 to the Consolidated
Financial Statements on page 32 of the 1997 Annual Report, which is incorporated
herein by reference. Export sales of domestic operations were $896 million in
1997, $825.9 million in 1996, and $780.3 million in 1995.
Although international operations are subject to certain risks, such
as price and exchange rate fluctuations and foreign governmental restrictions,
Dover intends to increase its expansion into foreign markets as domestic markets
mature.
The countries where most of Dover's foreign subsidiaries and
affiliates are based are Canada, France, Great Britain, Germany and Sweden.
Environmental Matters
Dover believes its operations generally are in substantial
compliance with applicable regulations. In some instances, particular plants and
businesses have been the subject of administrative and legal proceedings with
governmental agencies relating to the discharge or potential discharge of
substances. Where necessary, these matters have been addressed with specific
consent orders to achieve compliance. Dover believes that continued compliance
will not have any material impact on the Company's financial position going
forward and will not require significant capital expenditures.
Employees
The Company had about 28,800 employees as of December 31, 1997.
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Item 2. PROPERTIES
The number, type, location and size of the Company's properties are shown on the
following charts, by segment.
<TABLE>
<CAPTION>
Square Footage
Number and Nature of Facilities (000's)
--------------------------------------------------------
Ware- Sales/
Segment Mfg. house Service Owned Leased
- ------- ---- ----- ------- ----- ------
<S> <C> <C> <C> <C> <C>
Diversified 28 6 44 2,186 480
Elevator 5 40 200 312 2,015
Industries 36 8 27 3,089 355
Resources 60 14 35 2,541 473
Technologies 46 14 104 1,113 1,059
</TABLE>
<TABLE>
<CAPTION>
Locations Leased Facilities
-------------------------------- ----------------------
North Expiration Dates (years)
American Europe Other Minimum Maximum
-------- ------ ----- ------- -------
<S> <C> <C> <C> <C> <C>
Diversified 43 21 4 1 16
Elevator 193 7 19 1 61
Industries 57 9 -- 1 9
Resources 80 16 3 1 16
Technologies 55 55 47 1 20
</TABLE>
The facilities are generally well maintained and suitable for the
operations conducted. The productive capacity of its plants is generally
adequate for current needs.
Item 3. LEGAL PROCEEDINGS
Dover is party to a number of legal proceedings arising out of the
normal course of its businesses. In general, most claims arise in connection
with activities of its Elevator segment operations and certain of its other
businesses which make products used by the public. Dover has also been involved
with an examination by the Internal Revenue Service (the "IRS") of the Company's
1990 and 1991 Federal income tax returns. The IRS completed its examination of
such returns in 1994 and has proposed additional taxes aggregating $36.2 million
plus interest. During 1996, the IRS completed its examination of the Company's
1992 and 1993 Federal income tax returns and has proposed additional taxes and
penalties aggregating $18.6 million plus interest. The Company is vigorously
contesting both actions. The IRS is currently examining the Company's 1994 and
1995 Federal income tax returns. In addition, matters have arisen under various
environmental laws, as well as under local regulatory compliance agencies. For a
further description of such matters, see Note 12 to the Consolidated Financial
Statements on page 31 of the 1997 Annual Report, which is incorporated herein by
reference.
Based on insurance availability, established reserves and periodic
reviews of those matters, management is of the opinion that the ultimate
resolution of current pending claims and known contingencies should not have a
material adverse effect on Dover's financial position, results of operations or
cash flows, taken as a whole.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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EXECUTIVE OFFICERS OF THE REGISTRANT
All officers are elected annually at the first meeting of the Board
of Directors following the annual meeting of stockholders and are subject to
removal at any time by the Board of Directors. The executive officers of Dover
as of March 20, 1998, and their positions with the Company (and, where relevant,
prior business experience) for the past five years are as follows:
<TABLE>
<CAPTION>
Name Age Positions Held and Prior Business Experience
- ---- --- --------------------------------------------
<S> <C> <C>
Gary L. Roubos 61 Chairman (since August 1989) and Director;
previously President (through May 1993) and
Chief Executive Officer (through May 1994).
Thomas L. Reece 55 Chief Executive Officer (since May 1994),
President and Director (since May 1993);
previously President of Dover Resources,
Inc.
John F. McNiff 55 Vice President-Finance, Treasurer and (since
May 1996) Director.
Robert G. Kuhbach 50 Vice President, General Counsel and
Secretary (since May 1993); prior thereto
Senior Vice President (later Executive Vice
President and a Director), Secretary and
General Counsel (through February 1992) of
Sudbury, Inc., (industrial products).
Robert A. Tyre 53 Vice President-Corporate Development (since
February 1995); prior thereto President, Rye
Transaction Consultants, Inc. (acquisition
consultants), from February 1993 to January
1995; prior thereto for more than five
years, Vice President, Booz oAllen &
Hamilton, Inc. (management consultants).
Alfred Suesser 65 Controller.
Lewis E. Burns 59 Vice President and President of Dover
Industries, Inc.
Nigel P. Davis 47 Vice President (since May 1996) and
President of Dover Elevator International,
Inc. (since October 1995); prior thereto for
more than five years, Managing Director,
Hammond & Champness, Ltd., subsidiary of
Dover Elevator International, Inc.
Rudolf J. Herrmann 47 Vice President (since November 1993) and
President of Dover Resources, Inc. (since
May 1993); prior thereto, President of
Rotary Lift division of Dover Industries,
Inc.
John E. Pomeroy 56 Vice President (since November 1993) and
President of Dover Technology International,
Inc.
Jerry W. Yochum 59 Vice President, and President of Dover
Diversified, Inc.
</TABLE>
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PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The principal market in which the Company's Common Stock is traded is
the New York Stock Exchange. Information on the high and low sales prices of
such stock, and the frequency and the amount of dividends paid during the last
two years, is set forth on Page 35 of the 1997 Annual Report and incorporated
herein by reference. On December 15, 1997, Registrant effected a 2 for 1 stock
split in the form of a stock dividend payable to holders of record on November
28, 1997.
The number of holders of record of the Registrants' Common Stock as
of February 27, 1998, as shown by the records of the Registrants' transfer agent
was 13,040. This figure includes participants in the Registrants' 401 (k)
program.
On December 16, 1997, pursuant to the 1996 Non-Employee Directors'
Stock Compensation Plan, the company issued 1,400 shares of its Common Stock to
each of its seven outside directors as compensation for serving as a director of
the Company during 1997.
Item 6. SELECTED FINANCIAL DATA
The information for the years 1987 through 1997 is set forth in the
table "11-Year Consolidated Summary of Selected Financial Data" in the 1997
Annual Report on pages 36 and 37 and is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information set forth in the 1997 Annual Report on pages 8-21 and
33-34 is incorporated herein by reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
INTEREST RATES
The Company's exposure to market risk for changes in interest rates
relates primarily to the fair value of long-term fixed interest rate debt,
commercial paper borrowings and investments in cash equivalents. Generally, the
fair market value of fixed-interest rate debt will increase as interest rates
fall and decrease as interest rates rise. A 65 basis point increase in interest
rates (10% of the Company's long-term debt interest rate) would have an
immaterial effect on the fair value of the Company's long-term debt. Commercial
paper borrowings under revolving credit facilities are at variable interest
rates, and have maturities of three months or less. A 55 basis point increase in
the interest rates (10% of the Company's weighted average commercial paper
interest rate) on commercial paper borrowings would have an immaterial impact on
the Company's pre-tax earnings. All highly liquid investments, including highly
liquid debt instruments purchased with an original maturity of thee months or
less are considered cash equivalents. The Company places its investments in cash
equivalents with high credit quality issuers and limits the amount of exposure
to any one issuer. A 54 basis point decrease in interest rates (10% of the
Company's weighted average interest rate) would have an immaterial impact on the
Company's pretax earnings. The Company does not enter into derivative financial
or derivative commodity instruments for trading or speculative purposes.
FOREIGN EXCHANGE
The Company conducts business in various foreign currencies,
primarily in Canada, Europe, Australia, Japan and other Asian countries.
Therefore, changes in the value of the currencies of
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these countries affect the Company's financial position and cash flows when
translated into U.S. Dollars. As of December 31, 1997 the Company had not
established a foreign currency hedging program. The Company has mitigated and
will continue to mitigate, a portion of its currency exposure through
decentralized operating companies in which all costs are local-currency based. A
10% change in the value of all foreign currencies would have an immaterial
effect on the Company's financial position and cash flows.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information set forth in the 1997 Annual Report on pages 22
through 32 is incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information with respect to the directors of the Company required
to be included pursuant to this Item 10 is included under the caption "1.
Election of Directors" in the 1998 Proxy Statement relating to the 1998 Annual
Meeting of Stockholders filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 14a-6 under the Securities Exchange Act of 1934,
as amended, and is incorporated in this Item 10 by reference. The information
with respect to the executive officers of the Company required to be included
pursuant to this Item 10 is included under the caption "Executive Officers of
the Registrant" in Part I of this Annual Report on Form 10-K and is incorporated
in this Item 10 by reference. The information with respect to Section 16(a)
reporting compliance required to be included in this Item 10 is included under
the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the
1998 Proxy Statement and is incorporated in this Item 10 by reference.
Item 11. EXECUTIVE COMPENSATION
The information with respect to executive compensation required to be
included pursuant to this Item 11 is included under the caption "Executive
Compensation" in the 1998 Proxy Statement and is incorporated in this Item 11 by
reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information regarding security ownership of certain beneficial
owners and management that is required to be included pursuant to this Item 12
is included under the captions "General" and "Security Ownership" in the 1998
Proxy Statement and is incorporated in this Item 12 by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information with respect to any reportable transaction, business
relationship or indebtedness between the Company and the beneficial owners of
more than 5% of the Common Stock, the directors or nominees for director of the
Company, the executive officers of the Company or the members of the immediate
families of such individuals that is required to be included pursuant to this
Item 13 is included under the caption "1. Election of Directors-Directors'
Compensation" in the 1998 Proxy Statement and is incorporated in this Item 13 by
reference.
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PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements
The following consolidated financial statements of Dover Corporation
and its subsidiaries are set forth in the 1997 Annual Report, which
financial statements are incorporated herein by reference:
(A) Report of Independent Accountants.
(B) Consolidated balance sheets as of December 31, 1997 and 1996.
(C) Consolidated statements of earnings for the years ended
December 31, 1997, 1996 and 1995.
(D) Consolidated statements of retained earnings for the years
ended December 31, 1997, 1996 and 1995.
(E) Consolidated statements of cash flows for the years ended
December 31, 1997, 1996 and 1995.
(F) Notes to consolidated financial statements.
(2) Financial Statement Schedule
The following financial statement schedule is attached to Part IV of
this report on form 10-K:
Schedule II -- Valuation and Qualifying Accounts
Report of Independent Accountants.
All other schedules are not required and have been omitted.
(3) See (c) below.
(b) No reports on Form 8-K were filed during the fourth quarter of the
fiscal year ended December 31, 1997.
(c) Exhibits:
(3)(i) Restated Certificate of Incorporation of the Company and
Amendments thereto filed as Exhibit 3(a) to Annual Report on Form
10-K for year ended December 31, 1989, and Amendment thereto, filed
as Exhibit 3(i) to Form 10-Q for quarter ended September 30, 1996 is
incorporated by reference.
(3)(ii) By-Laws of the Company filed as Exhibit 3(ii) to Quarterly
Report on Form 10-Q for Period Ended September 30, 1993, are
incorporated by reference.
(4)(a) Amended and Restated Rights Agreement, dated as of November
15, 1996, between Dover Corporation and Harris Trust Company of New
York, filed as Exhibit 1 to Form 8-A/A dated November 15, 1996, is
incorporated by reference.
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(4)(b) The Company agrees to furnish to the Commission, upon
request, a copy of any instrument with respect to long-term debt
under which the total amount of securities authorized does not
exceed 10 percent of the total consolidated assets of the Company.
(10)(a) 1984 Incentive Stock Option and Cash Performance Program,
filed as Exhibit 10(a) to Annual Report on Form 10-K for year ended
December 31, 1984, is incorporated by reference.*
(b) Employee Savings and Investment Plan, filed as Exhibit 99 to
Registration Statement on Form S-8 filed under Securities Act of
1933 (Reg. No. 33-01419), is incorporated by reference.*
(c) 1995 Incentive Stock Option and 1995 Cash Performance Program,
included as Exhibit A to the Proxy Statement dated March 15, 1995,
is incorporated by reference.*
(d) 1996 Non-Employee Directors' Stock Compensation Plan included as
Exhibit A to the Proxy Statement dated March 15, 1996 is
incorporated by reference.
(e) Executive Officer Annual Incentive Plan included as Exhibit A to
the Proxy Statement Dated March 16, 1998 is incorporated by
reference.*
(13) Incorporated portions of Dover's Annual Report to Stockholders
for its fiscal year ended December 31, 1997, as filed with the
Commission by EDGAR on March 11, 1998, are incorporated by
reference.
(21) Subsidiaries of Dover.
(23) Consent of Coopers & Lybrand L.L.P.
(24) Form of Power of Attorney.
(27) Financial Data Schedules (in EDGAR filing only).
* Executive compensation plan or arrangement.
(d) Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned thereunto duly authorized.
DOVER CORPORATION
By:/s/Thomas L. Reece
-------------------------------------
Thomas L. Reece
President and Chief Executive Officer
Date: March 27, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/Thomas L. Reece
- ----------------------
Thomas L. Reece President and Chief Executive
Officer and Director
(Principal Executive Officer) March 27, 1998
/s/John F. McNiff
- ----------------------
John F. McNiff Treasurer and Director
(Principal Financial Officer) March 27, 1998
/s/Alfred Suesser
- ----------------------
Alfred Suesser Controller March 27, 1998
(Principal Accounting Officer)
/s/Gary L. Roubos
- ----------------------
Gary L. Roubos Chairman and Director* March 27, 1998
/s/David H. Benson
- ----------------------
David H. Benson Director* March 27, 1998
/s/Magalen O. Bryant
- ----------------------
Magalen O. Bryant Director* March 27, 1998
/s/Jean-Pierre M. Ergas
- ----------------------
Jean-Pierre M. Ergas Director* March 27, 1998
13
<PAGE> 14
/s/Roderick J. Fleming
- ----------------------
Roderick J. Fleming Director* March 27, 1998
/s/John F. Fort
- ----------------------
John F. Fort Director* March 27, 1998
/s/James L. Koley
- ----------------------
James L. Koley Director* March 27, 1998
/s/Anthony J. Ormsby
- ----------------------
Anthony J. Ormsby Director* March 27, 1998
* By: /s/Robert G, Kuhbach
-------------------------
Robert G. Kuhbach
Attorney-in-Fact
14
<PAGE> 15
EXHIBIT INDEX
(3) (i) Restated Certificate of Incorporation of the Company and
Amendments thereto, filed as Exhibit 3(a) to Annual Report on Form
10-K for year ended December 31, 1989, and Amendment thereto, filed as
Exhibit 3(a) to Form 10-Q for quarter ended September 30, 1996 is
incorporated by reference.
(ii) By-Laws of the Company filed as Exhibit 3(ii) to Quarterly Report
on Form 10-Q for Period Ended September 30, 1993, are incorporated by
reference.
(4) (a) Amended and Restated Rights Agreement, dated as of November 15,
1996, between Dover Corporation and Harris Trust Company of New York,
filed as Exhibit 1 to Form 8-A/A dated November 15, 1996, is
incorporated by reference.
(10) (a) 1984 Incentive Stock Option and Cash Performance Program, filed as
Exhibit 10(a) to Annual Report on Form 10-K for year ended December
31, 1984, is incorporated by reference.
(b) Employee Savings and Investment Plan, filed as Exhibit 99 to
Registration Statement on Form S-8 filed under Securities Act of 1933
(Reg. No.33-01419), is incorporated by reference.
(c) 1995 Incentive Stock Option and 1995 Cash Performance Program,
included as Exhibit A to the Proxy Statement dated March 15, 1995, is
incorporated by reference.
(d) 1996 Non-Employee Directors' Stock Compensation Plan, included as
Exhibit A to the Proxy Statement, dated March 15, 1996 is incorporated
by reference.
(e) Executive Officer Annual Incentive Plan included as Exhibit A to
the Proxy Statement dated March 16, 1998, is incorporated by
reference.
(13) Incorporated portions of Dover's Annual Report to Stockholders for its
fiscal year ended December 31, 1997, as filed with the Commission by
EDGAR on March 11, 1998, are incorporated by reference.
(21) Subsidiaries of Dover.
(23) Consent of Coopers & Lybrand L.L.P.
(24) Form of Power of Attorney.
(27) Financial Data Schedule (in EDGAR filing only).
15
<PAGE> 16
SCHEDULE II
DOVER CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years Ended December 31, 1997, 1996, 1995
<TABLE>
<CAPTION>
Additions
Balance at Charged to Balance at
Beginning of Cost and Deductions Close of
Year Expense (1) Year
------------ ---------- ---------- ----------
(000's omitted)
<S> <C> <C> <C> <C>
Year Ended December 31, 1997
Allowance for Doubtful Accounts $24,821 $10,167 $7,831 $27,157
Year Ended December 31, 1996
Allowance for Doubtful Accounts $22,325 $9,491 $6,995 $24,821
Year Ended December 31, 1995
Allowance for Doubtful Accounts $14,326 $9,616 $1,617 $22,325
</TABLE>
Notes:
(1) Represents uncollectible accounts written off and reduction of prior
years' over-provision less recoveries of accounts previously written off,
net of $492, $921 and $3,260 related to acquisitions and divestitures in
1997, 1996 and 1995, respectively.
<TABLE>
<CAPTION>
Charged
Balance at (Credited) Acquired by Balance at
Beginning of to Cost and Acquisition or Close of
Year Expense Merger Year
------------ ----------- ---------- ----------
(000's omitted)
<S> <C> <C> <C> <C>
Year Ended December 31, 1997
Lifo Reserve $45,781 $617 $ -- $46,398
Year Ended December 31, 1996
Lifo Reserve $45,815 $(34) $ -- $45,781
Year Ended December 31, 1995
Lifo Reserve $41,304 $4,511 $ -- $45,815
</TABLE>
16
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Dover Corporation:
Our report on our audits of the consolidated financial statements of Dover
Corporation and subsidiaries has been incorporated by reference in this Form
10-K from the 1997 Annual Report of Dover Corporation and appears on page 32
therein. In connection with our audits of such financial statements, we have
also audited the related financial statement schedule as listed in the index
under Item 14 (a) of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
Coopers & Lybrand L.L.P.
New York, New York
February 6, 1998
17
<PAGE> 1
EXHIBIT 21
LIST OF SUBSIDIARIES
Domestic Subsidiaries
---------------------
State of
Name Incorporation
- ---- -------------
A-C Compressor Corporation Delaware
Belvac Production Machinery, Inc. Delaware
Chief Automotive Management Systems Inc. Delaware
Chief Automotive Systems, Inc. Delaware
Delaware Capital Formation, Inc. Delaware
Delaware Capital Holdings, Inc. Delaware
DovaTech Inc. Delaware
Dover Diversified, Inc. Delaware
Dover Elevator Company Delaware
Dover Elevator International, Inc. Delaware
Dover Elevator Systems, Inc. Delaware
Dover Europe Corporation Delaware
Dover Exports, Ltd. Barbados
Dover Holdings de Mexico SA DE CV Mexico
Dover Industries, Inc. Delaware
Dover Resources, Inc. Delaware
Dover Technology International, Inc. Delaware
Dow-Key Microwave, Inc. Delaware
Duncan Industries Parking Control Systems Corp. Delaware
Everett Charles Technologies Delaware
General Elevator Company, Incorporated Maryland
GFS Manufacturing, Inc. Delaware
Hasstech, Inc. Delaware
Hill-Phoenix, Inc. Delaware
Hydro Systems Company Delaware
K&L Microwave, Inc. Delaware
Light Machines Corporation New Hampshire
Marathon Equipment Company Delaware
Mark Andy, Inc. Missouri
Miami Elevator Company Delaware
Midland Manufacturing, Inc. Delaware
Novacap, Inc. Delaware
Pathway Bellows, Inc. Delaware
Petro Vend, Inc. Delaware
Phoenix Refrigeration Systems, Inc. Georgia
PRC Corporation New Jersey
Randell Manufacturing, Inc. Delaware
Randell Refrigeration, Inc. Delaware
Randell Warehouse of Arizona, Inc. Delaware
Refrigeration Systems, Inc. Delaware
Revod Corporation Delaware
Robohand, Inc. Delaware
Security Elevator Company Delaware
<PAGE> 2
Sound Elevator Company Delaware
Stark Manufacturing, Inc. Delaware
Texas Hydraulics, Inc. Delaware
The Heil Company Delaware
The Wittemann Company, Inc. Delaware
Thermal Equipment Corporation California
Tipper Tie, Inc. Delaware
TNI, Inc. Delaware
Tranter, Inc. Michigan
Tulsa Winch, Inc. Delaware
Universal Instruments Corporation Delaware
Vectron Laboratories, Inc. Delaware
Vectron Technologies, Inc. Delaware
Waukesha Bearings Corp. Wisconsin
Weldcraft Products, Inc. Delaware
Foreign Subsidiaries
--------------------
Name Jurisdiction
- ---- ------------
A-C Compressor Canada Canada
Allgemeine Aufzugswartung GmbH Germany
Chief Automotive Limited United Kingdom
Chief Automotive Systems Canada, Inc. Canada
De-Sta-Co (Asia) Company, Limited Thailand
De-Sta-Co Metallerzeugnisse GmbH Germany
DEK GmbH Germany
DEK Printing Machines Ltd. United Kingdom
Dover Corporation (Canada) Limited Canada
Dover Europe Aufzug GmbH Germany
Dover Exports, Ltd. Barbados
Dover France Holdings SARL France
Dover International, B.V. Netherlands
Dover UK Finance Limited United Kingdom
Dover UK Finance Services Limited United Kingdom
Dover UK Holdings Limited United Kingdom
DTI-ARB, Inc. Canada
Grapas Nacionales de Mexico C.V. de S.A. Mexico
Heat Transfer Technology S.A. (HTT) Switzerland
Imaje, S.A. France
Langbein & Englebracht, GmbH Germany
Luther & Maezler, GmbH Germany
Marte S. R. L. Italy
Petro Vend Europe Inc. United Kingdom
Petro Vend of Canada, Inc. Canada
Petro Vend, Inc. Poland
ReHeat N.V. Belgium
Sincotron - Nordic Sweden
Soltec Group B.V. Netherlands
Soltec International, B.V. Netherlands
Swep A.G. Switzerland
Technopack ewald hagedoen Nederland b.v Netherlands
Tipper Tie-Technopack GmbH Germany
Unibras A.G. Switzerland
<PAGE> 3
Universal Hong Kong Hong Kong
Universal Instruments (Electronics) Ltd. United Kingdom
Universal Instruments (Malaysia) Sdn Bhd Malaysia
Universal Instruments Corporation
(Singapore) Pte. Ltd. Singapore
Universal Instruments GmbH Germany
Universal Instruments Korea Limited Korea
Universal Instruments S.a.r.l. France
Universal Electronics Systems Taiwan
Universal Instruments de Mexico Mexico
Universal Instruments Corp. Svenska Sweden
Universal Instruments Nordic AS Norway
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in (a) the Registration Statement
of Dover Corporation on Form S-8 (File No. 333-45661), (b) the Registration
Statement of Dover Corporation on Form S-8 (File No. 33-11229, (c) the
Registration Statement of Dover Corporation on Form S-8 (File No. 33-01419) and
(d) the Registration Statement of Dover Corporation on Form S-3 (File No.
333-48201) of our reports dated February 6, 1998 on our audits of (i) the
consolidated balance sheets of Dover Corporation and subsidiaries as of December
31, 1997 and 1996, and the related consolidated statements of earnings, retained
earnings and cash flows for the years ended December 31, 1997, 1996 and 1995,
which report is included in the 1997 Annual Report and incorporated by reference
in the 1997 Annual Report on Form 10-K and (ii) the 1997 financial statement
schedule of Dover Corporation, which report is included in this Annual Report on
Form 10-K.
Coopers & Lybrand L.L.P.
New York, New York
March 27, 1998
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that, a director of Dover Corporation, a
Delaware corporation (the "Company"), hereby constitutes and appoints Thomas L.
Reece, John F. McNiff and Robert G. Kuhbach, and each of them (with full power
to each of them to act alone), his true and lawful attorney-in-fact and agent,
for him/her on his/her behalf and in his/her name, place and stead, to sign,
execute and affix his/her name thereto and file the Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997, with the Securities
and Exchange Commission and any other appropriate authority, granting unto said
attorneys and each of them, full power and authority to do and perform each and
every act and thing required and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he/she
himself might or could do if personally present, hereby ratifying and confirming
all that said attorneys-in-fact and agents, of any of them may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand this
30th day of January, 1998.
/s/David H. Benson
-------------------------------
David H. Benson
/s/Magalen O. Bryant
-------------------------------
Magalen O. Bryant
/s/ John-Pierre M. Ergas
-------------------------------
John-Pierre M. Ergas
/s/ Roderick J. Fleming
-------------------------------
John-Pierre Ergas
/s/John F. Fort
-------------------------------
John F. Fort
/s/James L. Koley
-------------------------------
James L. Koley
/s/John F. McNiff
-------------------------------
John F. McNiff
/s/Anthony J. Ormsby
-------------------------------
Anthony J. Ormsby
/s/Thomas L. Reece
-------------------------------
Thomas L. Reece
/s/Gary L. Roubos
-------------------------------
Gary L. Roubos
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the Dover
Corporation Annual Report to stockholders for the fiscal year ended December 31,
1997, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> DEC-31-1997
<CASH> 124,780
<SECURITIES> 21,929
<RECEIVABLES> 845,450
<ALLOWANCES> 27,157
<INVENTORY> 562,830
<CURRENT-ASSETS> 1,591,345
<PP&E> 1,262,288
<DEPRECIATION> 691,709
<TOTAL-ASSETS> 3,277,524
<CURRENT-LIABILITIES> 1,196,573
<BONDS> 262,630
0
0
<COMMON> 234,507
<OTHER-SE> 1,469,077
<TOTAL-LIABILITY-AND-EQUITY> 3,277,524
<SALES> 4,547,656
<TOTAL-REVENUES> 4,547,656
<CGS> 2,975,920
<TOTAL-COSTS> 3,934,987
<OTHER-EXPENSES> (41,137)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 46,888
<INCOME-PRETAX> 616,836
<INCOME-TAX> 211,405
<INCOME-CONTINUING> 405,431
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 405,431
<EPS-PRIMARY> 1.82<F1>
<EPS-DILUTED> 1.79
<FN>
<F1> Defined as Basic earnings per common share per the Consolidated statement
of earnings.
</FN>
</TABLE>
