<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For three months ended March 31, 2000 Commission File No. 1-4018
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 53-0257888
(State of Incorporation) (I.R.S. Employer Identification No.)
280 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 922-1640
Indicate by checkmark 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, and (2) has been subject to such filing
requirements for the past 90 days. Yes_X_ No ___
The number of shares outstanding of the Registrant's common stock as of the
close of the period covered by this report was 203,000,356.
<PAGE> 2
Part. I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
<TABLE>
<CAPTION>
UNAUDITED
2000 1999
----------------- ------------------
<S> <C> <C>
Net sales $ 1,251,283 $ 969,755
Cost of sales 794,144 626,882
----------------- ------------------
Gross profit 457,139 342,873
Selling & administrative expenses 264,079 233,719
----------------- ------------------
Operating profit 193,060 109,154
----------------- ------------------
Other deductions (income):
Interest expense 17,765 13,623
Interest income (2,336) (9,204)
Foreign exchange 814 277
Loss on dispositions 1,400 3,675
All other, net (3,576) (3,981)
----------------- ------------------
Total 14,067 4,390
----------------- ------------------
Earnings before taxes on income 178,993 104,764
Federal & other taxes on income 61,674 35,544
----------------- ------------------
Net earnings from continuing operations 117,319 69,220
Earnings from discontinued operations, net of tax 523,938
----------------- ------------------
Net earnings $ 117,319 $ 593,158
================= ==================
Weighted average number of common shares
outstanding during the period
- Basic 202,797 216,928
================= ==================
- Diluted 204,440 218,326
================= ==================
Net earnings per share:
Basic - Continuing $ 0.58 $ 0.32
Gain on sale - 2.41
----------------- ------------------
Net earnings $ 0.58 $ 2.73
================= ==================
Diluted - Continuing $ 0.57 $ 0.32
Gain on sale - 2.40
----------------- ------------------
Net earnings $ 0.57 $ 2.72
================= ==================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 3
DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
<TABLE>
<CAPTION>
UNAUDITED
2000 1999
----------------- ------------------
<S> <C> <C>
Net earnings $ 117,319 $ 593,158
----------------- ------------------
Other comprehensive earnings, net of tax:
Foreign currency translation adjustments 1,901 (25,090)
Less: reclassification adjustment for adjustments
included in net earnings - -
----------------- ------------------
Total foreign currency translation adjustments 1,901 (25,090)
----------------- ------------------
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period - -
Less: reclassification adjustment for gains (losses)
included in net earnings - -
----------------- ------------------
Total unrealized gains on securities - -
----------------- ------------------
Other comprehensive earnings 1,901 (25,090)
----------------- ------------------
Comprehensive earnings $ 119,220 $ 568,068
================= ==================
</TABLE>
DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
<TABLE>
<CAPTION>
UNAUDITED
2000 1999
----------------- ------------------
<S> <C> <C>
Retained earnings at January 1 $ 2,830,175 $ 1,992,991
Net earnings 117,319 593,158
----------------- ------------------
2,947,494 2,586,149
Deduct:
Common stock cash dividends
$ 0.115 per share ($0.105 in 1998) 23,339 22,685
----------------- ------------------
Retained earnings at end of period $ 2,924,155 $ 2,563,464
================= ==================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 4
DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(000 OMITTED)
<TABLE>
<CAPTION>
UNAUDITED
March 31, 2000 December 31, 1999
----------------- ------------------
<S> <C> <C>
Assets:
- -------
Current assets:
Cash & cash equivalents $ 120,875 $ 138,038
Marketable securities - -
Receivables, net of allowance for doubtful accounts 841,743 750,917
Inventories 705,122 639,379
Prepaid expenses 92,676 83,228
----------------- ------------------
Total current assets 1,760,416 1,611,562
----------------- ------------------
Property, plant & equipment (at cost) 1,499,413 1,480,833
Accumulated depreciation (847,899) (834,358)
----------------- ------------------
Net property, plant & equipment 651,514 646,475
----------------- ------------------
Intangible assets, net of amortization 1,919,913 1,813,359
Other intangible assets 7,358 7,358
Deferred charges & other assets 64,165 53,186
----------------- ------------------
$ 4,403,366 $ 4,131,940
================= ==================
Liabilities:
- ------------
Current liabilities:
Notes payable $ 753,612 $ 296,637
Current maturities of long-term debt 1,596 1,263
Accounts payable 264,959 253,650
Accrued compensation & employee benefits 122,040 157,392
Accrued insurance 47,406 50,274
Other accrued expenses 189,466 186,405
Income taxes 92,038 389,244
----------------- ------------------
Total current liabilities 1,471,117 1,334,865
----------------- ------------------
Long-term debt 634,295 608,025
Deferred taxes 49,174 42,061
Other deferrals (principally compensation) 107,598 108,233
Stockholders' equity:
- ---------------------
Preferred stock - -
Common stock 236,698 236,246
Additional paid-in surplus 42,460 33,060
Cumulative translation adjustments (78,084) (79,985)
Unrealized holding gains (losses) 46 46
----------------- ------------------
Accumulated other comprehensive earnings (78,038) (79,939)
----------------- ------------------
Retained earnings 2,924,155 2,830,175
----------------- ------------------
Subtotal 3,125,275 3,019,542
Less: treasury stock 984,093 980,786
----------------- ------------------
2,141,182 2,038,756
----------------- ------------------
$ 4,403,366 $ 4,131,940
================= ==================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 5
DOVER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
THREE MONTHS ENDED MARCH 31,
(000 OMITTED)
<TABLE>
<CAPTION>
UNAUDITED
2000 1999
----------------- ------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 117,319 $ 593,158
----------------- ------------------
Adjustments to reconcile net earnings to net cash from operating activities:
Income from discontinued operations - -
Gain on sale of discontinued business - (523,938)
Depreciation 31,963 29,146
Amortization 16,048 14,036
Net increase (decrease) in deferred taxes 5,997 3,637
Net increase (decrease) in LIFO reserves 661 570
Increase (decrease) in deferred compensation 1,821 (4,960)
(Gain) loss on sale of business and certain assets 1,400 3,675
Other, net (3,939) (10,765)
Changes in assets & liabilities (excluding acquisitions):
Decrease (increase) in accounts receivable (78,959) (9,864)
Decrease (increase) in inventories, excluding LIFO reserve (52,020) (11,272)
Decrease (increase) in prepaid expenses (8,780) (6,419)
Increase (decrease) in accounts payable 6,209 (7,116)
Increase (decrease) in accrued expenses (36,464) (33,004)
Increase (decrease) in federal & other taxes on income 14,891 (194)
----------------- ------------------
Total adjustments (101,172) (556,468)
----------------- ------------------
Net cash from operating activities of continuing operations 16,147 36,690
----------------- ------------------
Cash flows from (used in) investing activities:
Net sales (purchase) of marketable securities - -
Additions to property, plant & equipment (35,231) (26,305)
Acquisitions, net of cash & cash equivalents (154,080) (164,048)
Proceeds from sale of business 14,923 -
Purchase of treasury stock (3,307) (249,294)
----------------- ------------------
Net cash from (used in) investing activities of continuing operations (177,695) (439,647)
----------------- ------------------
Cash flows from (used in) financing activities:
Increase (decrease) in notes payable 456,975 (324,350)
Increase (decrease) in long-term debt 12,728 (989)
Proceeds from exercise of stock options 5,449 4,550
Cash dividends to stockholders (23,339) (22,685)
----------------- ------------------
Net cash from (used in) financing activities of continuing operations 451,813 (343,474)
----------------- ------------------
----------------- ------------------
Proceeds, taxes and cash from discontinued operations (307,428) 1,169,599
----------------- ------------------
Net increase (decrease) in cash & cash equivalents (17,163) 423,168
Cash & cash equivalents at beginning of period 138,038 96,774
----------------- ------------------
Cash & cash equivalents at end of period $ 120,875 $ 519,942
================= ==================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 6
DOVER CORPORATION CONSOLIDATED
MARKET SEGMENT RESULTS
(unaudited)
<TABLE>
<CAPTION>
First quarter ended March 31
----------------------------
Percent
SALES 2000 1999 Change
----- -------------------- ----------------------------
<S> <C> <C> <C>
Dover Technologies $ 466,366,000 $ 288,120,000 62%
Dover Industries 299,041,000 258,706,000 16%
Dover Diversified 269,538,000 230,580,000 17%
Dover Resources 218,156,000 193,757,000 13%
-------------------- -------------------
Total (after intramarket eliminations) $ 1,251,283,000 $ 969,755,000 29%
==================== ===================
EARNINGS
--------
Dover Technologies $ 84,795,000 $ 25,914,000 227%
Dover Industries 50,415,000 37,284,000 35%
Dover Diversified 33,465,000 27,281,000 23%
Dover Resources 33,541,000 26,933,000 25%
----------------------------------------
Subtotal (after intramarket eliminations) 202,216,000 117,412,000
Gain (loss) on disposition (1,400,000) ($3,675,000)
Corporate expense (6,241,000) (4,502,000) 39%
Net interest expense (15,582,000) ($4,471,000) 249%
----------------------------------------
Earnings before taxes on income 178,993,000 104,764,000 71%
Taxes on income 61,674,000 35,544,000 74%
----------------------------------------
Net earnings - Continuing Operations 117,319,000 69,220,000 69%
Gain on sale of discontinued operations * - 523,938,000
----------------------------------------
Net earnings $ 117,319,000 $ 593,158,000 -80%
========================================
Net earnings per share:
Basic - Continuing $ 0.58 $ 0.32 81%
Gain on sale - 2.41
----------------------------------------
Net earnings $ 0.58 $ 2.73
========================================
Diluted - Continuing $ 0.57 $ 0.32 78%
Gain on sale - 2.40
----------------------------------------
Net earnings $ 0.57 $ 2.72
========================================
Average number of shares outstanding - Basic 202,797,000 216,928,000
Average number of shares outstanding - Diluted 204,440,000 218,326,000
</TABLE>
* On January 5, 1999, Dover completed the sale of its elevator business to
Thyssen Industrie AG for $1.16 billion.
DOVER CORPORATION AND SUBSIDIARIES
MARKET SEGMENT IDENTIFIABLE ASSETS
(000 OMITTED)
<TABLE>
<CAPTION>
UNAUDITED
March 31, December 31,
2000 1999
-------------------- -------------------
<S> <C> <C>
Dover Technologies $ 1,277,473 $ 1,206,549
Dover Industries 1,054,280 894,452
Dover Diversified 1,139,924 1,128,239
Dover Resources 842,394 804,664
Corporate (1) 89,295 98,036
----------------------------------------
Consolidated Total $ 4,403,366 $ 4,131,940
==================== ===================
</TABLE>
(1) - Principally cash and equivalents
<PAGE> 7
DOVER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE A - Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and therefore do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and changes in financial position in
conformity with generally accepted accounting principles. In the opinion of the
Company, all adjustments, consisting only of normal recurring items necessary
for a fair presentation of the operating results have been made. The results of
operations of any interim period are subject to year-end audit and adjustments,
and are not necessarily indicative of the results of operations for the fiscal
year.
NOTE B - Inventory
Inventories, by components, are summarized as follows :
<TABLE>
<CAPTION>
(000 omitted)
---------------------------------------
UNAUDITED
March 31, December 31,
2000 1999
----------------- ------------------
<S> <C> <C>
Raw materials $ 261,681 $ 239,498
Work in progress 224,881 205,792
Finished goods 255,375 233,671
----------------- ------------------
Total 741,937 678,961
Less LIFO reserve 36,815 39,582
----------------- ------------------
Net amount per balance sheet $ 705,122 $ 639,379
================= ==================
</TABLE>
NOTE C - Accumulated other Comprehensive Earnings
Accumulated other comprehensive earnings, by components are summarized as
follows:
<TABLE>
<CAPTION>
UNAUDITED (000 omitted)
-------------------------------------------------------------
ACCUMULATED
OTHER Unrealized
COMPREHENSIVE Cumulative Holding
EARNINGS Translation Gains
(LOSSES) Adjustments (losses)
------------------ ----------------- ------------------
<S> <C> <C> <C>
Beginning balance $ (79,939) $ (79,985) $ 46
Current-period change 1,901 1,901 0
------------------ ----------------- ------------------
Ending balance $ (78,038) $ (78,084) $ 46
================== ================= ==================
</TABLE>
<PAGE> 8
NOTE D - Additional Information
For a more adequate understanding of the Company's financial position,
operating results, business properties and other matters, reference is made to
the Company's Annual Report on Form 10-K which was filed with the Securities
and Exchange Commission on March 16, 2000.
Net earnings as reported was used in computing both basic EPS and
diluted EPS without further adjustment. The Company does not have a complex
capital structure. Accordingly, the entire difference between basic weighted
average shares and diluted weighted average shares results from assumed stock
option exercise. The diluted EPS computation was made using the treasury stock
method.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(1) MATERIAL CHANGES IN CONSOLIDATED FINANCIAL CONDITION:
The Company's liquidity decreased slightly during the first three
months of 2000 as compared to the position at December 31, 1999. The taxes paid
on the gain from sale of the elevator business ($307 million), plus amounts
invested in acquisitions ($168 million) are the principle reasons for the
decrease in liquidity.
Working capital increased from $276.7 million at the end of last year
to $289.3 million at March 31, 2000. Capital expenditures were $35.2 million
for the first quarter 2000 compared to $26.3 million last year. The working
capital increase and capital expenditures were funded by internal cash flow.
At March 31, 2000, net debt (defined as long-term debt plus current
maturities on long-term debt plus notes payable less cash and equivalents and
marketable securities) of $1,269 million represented 37.2% of total capital.
This compares with 27.4% at December 31, 1999. In March the company issued $400
million under its commercial paper program as a one year note to pay for the
taxes on the gain from the elevator sale and to fund acquisitions. The interest
rate (6.13%) is based on three month Libor plus two basis points. The Company
continues to be rated A-1 by Standard & Poors and F-1 by Fitch IBCA. The
Company believes its significant free cash flow will enable it to fund internal
growth and, together with modest debt utilization fund its acquisition program.
The Company also believes it will continue to maintain a solid credit profile.
The Company completed four add-on and one stand-alone acquisitions
during the quarter at a combined cost of $168 million. At Dover Resources, Sure
Seal, a leading supplier of butterfly valves, actuators and other components
used in piping systems, pneumatic conveying, transportation and industrial
applications - complements Civacon/Knappco, Hydro Cam Engineering a maker of
stamping dies for the electric motor, generator, transformer and automotive
markets, joins De-Sta-Co Manufacturing. At Dover Technologies, Prime Yield, a
maker of semi conductors test sockets and distributor of probe cards, for
semiconductor testing expands Everett Charles Technologies semiconductor
product offering in it's market. At Dover Diversified, Yakima Wire Works, a
maker of bagging machinery for the packaging of soft perishable produce joins
SWF.
Dover Industries completed the only stand-along acquisition - Triton
Systems, Inc. (Mississippi). Triton is the leading provider of cash-dispensing
ATMs for off-premise locations and is the second-largest manufacturer of ATMs
and ATM management software in the U.S. The profit impact of these acquisitions
in 2000 will be small due to acquisition write-offs, and imputed financing
costs.
(2) MATERIAL CHANGES IN RESULTS OF OPERATIONS:
The Company earned $.57 per diluted share from continuing operations
in the first quarter ended March 31, 2000, an increase of 78% from the $.32 per
diluted share earned in the comparable quarter last year. Net income from
continuing operations for the first quarter was a first quarter record $117.3
million, up 69% from $69.2 million in net income from continuing operations
last year. Sales in the quarter were a
<PAGE> 9
record $1.25 billion, up 29% from $969.8 million last year. In the first
quarter of 1999 the Company also reported a non-recurring gain of $2.40 per
share from the sale of its elevator business.
Each of the Company's four business segments achieved earnings growth in excess
of 20%, led by Technologies where income more than tripled from a weak
performance in the first quarter of last year.
The Company reports its pretax earnings in two ways -- on the GAAP/SEC
required segment reporting described above, and on an EBITACQ basis (Earnings
Before Interest, Taxes, and non-cash charges arising from purchase accounting
for acquisitions). First quarter EBITACQ of $218 million was 65% higher than
prior year. Of this, about 12 points reflect acquisitions and 53% the growth of
existing companies (notably electronics). The reduction in shares outstanding
during the last 9 months of 1999 resulted in stronger growth for EBITACQ per
outstanding share, as this measure increased 73% to $1.07 per share.
DOVER TECHNOLOGIES:
Dover Technologies sales in the first quarter increased 62% to $466.4
million, from $288.1 million last year, and segment profit increased 227% to
$84.8 million, from $25.9 million last year. These strong results were a
continuation of trends apparent in the second half of last year, and compare to
a weak first quarter of 1999. Segment bookings set a quarterly record, and at
$562 million were 21% greater than shipments.
Technologies' circuit board assembly test equipment (CBAT) companies
achieved their fourth consecutive quarterly improvement in orders, shipments,
and earnings following an electronic industry cyclical slowdown that began in
late 1997 and continued into the early part of 1999. Sales, earnings, and
orders in the first quarter surpassed the best levels reached in the previous
industry up-cycle, and margins improved to 20%. The CBAT market demand is being
driven by the broad-based electronics industry recovery, innovations in
semiconductor packaging, and rising capacity needs -- especially for "new
generation" products. CBAT bookings were up 80% from last year, and the
book-to-bill ratio in the quarter was 1.13.
Technologies' specialty components (SEC) companies experienced an
outstanding quarter, as profits more than doubled on a 42% sales gain, the
result of strong demand from the communication market for increased bandwidth
and additional capacity for voice and data transmission in both fixed and
wireless systems, combined with improved operational performance. SEC bookings
were up 103%, and the quarter's book-to-bill ratio was 1.53.
Technologies' industrial marking business, Imaje, reported sales and
profits substantially ahead of last year's weak first quarter. The decline of
the French Franc in relation to the U.S. dollar has improved Imaje's
competitiveness in some markets, while lowering percentage gains expressed in
$'s. Imaje's sales, measured in French Francs, were up 34% from the first
quarter of 1999.
Technologies quarter-end backlog creates the potential for favorable
comparisons to last year's second quarter. Favorable comparisons in the second
half of 2000 will be harder to achieve, particularly for CBAT, whose 1999
second half profits were much higher than the first half.
DOVER INDUSTRIES:
Dover Industries sales in the first quarter increased 16% to $299.0
million from $258.7 million last year, and segment earnings increased 35% from
$37.3 million to $50.4 million. Acquisitions made in the last year, including
Triton, contributed 12 percentage points of the sales increase and 13
percentage points of the segment earnings gain. Segment bookings in the quarter
were up 6% and the book-to-ship ratio was .98.
Heil Environmental set quarterly sales and profit records before
counting a $3 million gain from settlement of a long-standing dispute.
Shipments rose 12% from the average quarterly level in 1999, exceeding bookings
for the first time since the third quarter of 1998. Backlog remains high, up
38% from prior year.
The automotive service equipment market continues to be strong, which
helped Rotary Lift, Chief Automotive, and PDQ improve its sales by about 30%
and profits by about 60%. Rotary Lift improved its
<PAGE> 10
profits by more than 40%, partly as a result of two acquisitions made in 1999,
but primarily due to gains in its "core" US lift operations. All invested
heavily in new products and in manufacturing improvements during 1999.
In the food service equipment area, both Groen and Randell improved
sales and earnings. DovaTech's welding/laser equipment business grew internally
and by acquisition to become Industries' third largest profit producer. A
portion of these profit improvements was offset by a $1.1 million (19%) decline
at Heil Trailer and modest declines at three other companies totaling $1.2
million. Heil Trailer began reducing its shipments in 1999's third quarter
reflecting soft order rates earlier in that year. After an order spike late
last year, the downward trend has continued with first quarter orders falling
13% from the prior year to a level 17% below shipments.
Overall, Industries should see further profit growth in the second
quarter, which historically has been seasonally strong, and continues to expect
a strong operating gain for the full year including, now, a growing
contribution from Triton.
DOVER DIVERSIFIED:
Dover Diversified sales in the first quarter increased 17% to $269.5
million from $230.6, last year, and segment income increased 23% to $33.5
million from $27.3 million. The primary drivers of the profit gain were
acquisitions made in 1999 (especially Crenlo and JE Piston), good internal
growth at Tranter, Waukesha (U.S.) and Wiseco, and the successful turnaround at
Belvac. This company achieved earnings more than five times greater than last
year on only a 3% sales gain, improved margins close to historical levels, and
booked slightly more than it shipped. Employment levels at Belvac are down
almost 40% from last year and 69% from the high point during the 1994-1996
can-necker boom.
These gains were partially offset by declines at several other
companies (including Hill Phoenix, A-C Compressor, and Sargent) that totaled
$4.5 million, somewhat less than the amount added by companies acquired during
1999. Acquisitions, net of divestments, added about $38 million to
Diversified's first quarter sales.
Many of Diversified's companies tend to have variable quarterly
results due to seasonal factors and the irregular pattern of large machinery
shipments. In the current quarter bookings exceeded billings by 15% for
Diversified and backlogs ended 18% higher than last year.
Diversified's profits are expected to exceed the first quarter level
in the next two quarters of this year and to be ahead for the year as a whole.
DOVER RESOURCES:
Dover Resources sales in the first quarter increased to $218.2 million
from $193.8 million last year, or 13%, and segment income increased 25%, from
$26.9 million to $33.5 million. Segment bookings in the quarter were up 24% and
the book-to-bill ratio was 1.05.
Ten of the fourteen companies achieved earnings gains compared to last
year, with only one suffering a significant (and expected) decline. The
Petroleum Equipment Group, which suffered severely from low oil prices during
the first half of last year, more than doubled sales compared to last year's
first quarter, expanded margins, and achieved its best quarterly profits in
over ten years. Other companies that are strongly influenced by the
petro-chemical and energy production/transmission industries -- Wilden,
Blackmer, Cook, and OPW Fluid Transfer Group -- achieved strong profit gains
that totaled over 20%.
This improvement was partially offset by a 42% profit decline at OPW
Fueling Components on a sales drop of 15%. Spillover sales traceable to an EPA
compliance deadline for underground gasoline tanks inflated 1999's first
quarter results, turning this usually seasonally slow quarter into 1999's best
quarter by far. Actual earnings in this year's first quarter were only 10%
below the average level of the last three quarters of 1999.
For the first quarter total bookings and backlog at Resources' were
both up about 25% from last year with a book-to-bill ratio of 1.05. Resources
goal in 2000 is to exceed their previous record earnings year ($125 million in
1998), hopefully by a significant amount. This will require continued
strengthening from first quarter levels.
<PAGE> 11
OUTLOOK:
The first quarter was a strong start to what we expect will be another
record year. Order rates, backlogs and seasonality suggest that EPS could rise
in the second quarter, possibly setting a new quarterly record, and again be
well ahead of prior year ($.44 per share). Beyond this, modest increases are
possible, in our industrial businesses and in the SEC portion of our
electronics business. We are unable to predict business levels for our CBAT
companies much more than one quarter ahead. As noted in our recently published
Annual Report, "guesses and hopes must face the test of achievement, which is
not assured.
YEAR 2000:
The Company has experienced no substantive, let alone material, Year 2000
problems to date. In the unlikely event that subsequent Year 2000 problems were
to occur the Company believes the contingency plans developed and completed in
1998 and 1999 would still be applicable. The Company believes any such problems
that might become evident will not be material to the Company.
This "Year 2000" constitutes a "Year 2000 Readiness Disclosure" within
the meaning of the "Year 2000 Information and Readiness Disclosure Act."
Special Notes Regarding Forward Looking Statements
This Annual Report on Form 10-K 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 of 1933, as amended, and the Exchange Act of 1934, as amended,
and the Private Securities Litigation Reform Act of 1995. Such statements
relate to, among other things, industries in which the Company operates, the
U.S. and global economies, earnings, cash flow and operating improvements and
may be 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. Readers are cautioned not to place undue reliance on such
forward-looking 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.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule. (EDGAR filing only)
(b) No reports on Form 8-K were filed this quarter.
<PAGE> 12
Signatures
Pursuant to the requirements 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
Date: April 17, 1999 /s/ John F. McNiff
---------------------------- ------------------
John F. McNiff, Chief Financial Officer,
Vice President and Treasurer
Date: April 17, 1999 /s/ George F. Meserole
---------------------------- ----------------------
George F. Meserole, Chief Accounting
Officer, Vice President and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE DOVER
CORPORATION QUARTERLY REPORT TO STOCKHOLDERS FOR THE THREE MONTHS ENDED MARCH
31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 120,875
<SECURITIES> 0
<RECEIVABLES> 865,858
<ALLOWANCES> 24,125
<INVENTORY> 705,122
<CURRENT-ASSETS> 1,760,415
<PP&E> 1,499,413
<DEPRECIATION> (847,899)
<TOTAL-ASSETS> 4,403,366
<CURRENT-LIABILITIES> 1,471,117
<BONDS> 634,295
236,698
0
<COMMON> 0
<OTHER-SE> 1,904,484
<TOTAL-LIABILITY-AND-EQUITY> 4,403,366
<SALES> 1,251,283
<TOTAL-REVENUES> 1,251,283
<CGS> 794,144
<TOTAL-COSTS> 1,058,223
<OTHER-EXPENSES> (1,362)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,765
<INCOME-PRETAX> 178,993
<INCOME-TAX> 61,674
<INCOME-CONTINUING> 117,319
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,319
<EPS-BASIC> 0.58
<EPS-DILUTED> 0.57
</TABLE>
