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dover 3Q06_Earnings
1. CONTACT: READ IT ON THE WEB
Paul Goldberg www.dovercorporation.com
Treasurer and Director of Investor Relations
(212) 922-1640 October 24, 2006
DOVER REPORTS THIRD QUARTER 2006 RESULTS
New York, New York, October 24, 2006 - Dover Corporation (NYSE: DOV) announced that for the
third quarter ended September 30, 2006, it had earnings from continuing operations of $156.3 million
or $0.76 diluted earnings per share (“EPS”), compared to $123.0 million or $0.60 EPS from
continuing operations in the prior-year period, representing increases of 27% and 26%, respectively.
Revenue for the third quarter of 2006 was $1,651.9 million, an increase of 21% over the prior-year
period. Earnings from continuing operations for the third quarter of 2006 included $0.02 EPS related
to the expensing of stock options and stock appreciation rights.
Net earnings for the third quarter of 2006 were $167.5 million or $0.82 EPS, including earnings from
discontinued operations of $11.2 million or $0.05 EPS, compared to net earnings of $122.7 million or
$0.60 EPS for the same period of 2005, which included a loss from discontinued operations of $0.4
million and no EPS impact.
Earnings from continuing operations for the nine months ended September 30, 2006 increased 38%
to $446.3 million, or $2.17 EPS, compared to the prior year, and included $0.06 EPS related to the
expensing of stock options and stock appreciation rights. Net earnings were $443.3 million or $2.16
EPS, compared to $394.0 million or $1.93 EPS in the prior year.
Commenting on the third quarter results, Dover’s President and Chief Executive Officer, Ronald L.
Hoffman, stated: “Dover continues to post very positive comparative results with a 27% earnings
increase on a 21% increase in sales for the third quarter. We also had a positive book to bill in the
quarter. These results reflect continued strong performances at a number of Dover's key platforms,
particularly the Oil and Gas, Electronic Components, Product Identification, Mobile Equipment and
Process Equipment Groups. We continue to generate strong, double-digit organic growth and have
also realized a significant positive impact from our recent acquisitions. Quarterly free cash flow of
$240 million was 15% of quarterly sales and 154% of quarterly net earnings. Our robust cash
generation reflects Dover’s focus on working capital improvements in our operating companies. This
is driven by the Dover metrics and the Performance Counts initiatives and validates our rebalanced
portfolio of higher margin operating companies. We are also excited about the addition of Paladin
Brands to the Dover family. Paladin serves a broad array of construction, demolition, utility and
forestry customers with an extensive line of specialty attachments and tools sold primarily through a
diverse distribution network.
Looking ahead, Dover enters the fourth quarter with record backlogs and demand remains strong in
the Oil and Gas, Electronic Components, Product Identification and Process Equipment Groups.
However, light construction and automotive markets continue to decline and semiconductor markets
remain soft. Overall, we anticipate a solid fourth quarter, well ahead of prior year results, but
moderating somewhat from the third quarter of 2006 given the effects of acquisition accounting costs
at Paladin and Markem as well as the normal impact of the holiday season.”
2. 2
Dover will host a Webcast of its third quarter 2006 conference call at 9:00 AM Eastern Time on
Wednesday October 25, 2006. The Webcast can be accessed at the Dover Corporation website at
www.dovercorporation.com. The conference call will also be made available for replay on the
website and additional information on Dover’s third quarter 2006 results and its operating companies
can also be found on the Company website and in the Company’s Form 10-Q filed after this release.
Dover Corporation makes information available to the public, orally and in writing, which may use
words like “anticipates,” quot;expects,quot; quot;believes,quot; “indicates,” “suggests,” “will,” “plans” and “should,”
which are quot;forward-looking statementsquot; under the Private Securities Litigation Reform Act of 1995.
This press release contains forward-looking statements concerning future events and the
performance of Dover Corporation that involve inherent risks and uncertainties that could cause
actual results to differ materially from current expectations, including, but not limited to, failure to
achieve expected synergies, the impact of continued events in the Middle East on the worldwide
economy, economic conditions, increases in the cost of raw materials, changes in customer
demand, increased competition in the markets served by Dover Corporation’s operating companies,
the impact of natural disasters, such as hurricanes, and their effect on global energy markets and
other risks. Dover Corporation refers you to the documents that it files from time to time with the
Securities and Exchange Commission, such as its reports on Form 10-K, Form 10-Q and Form 8-K,
for a discussion of these and other risks and uncertainties that could cause its actual results to differ
materially from its current expectations and from the forward-looking statements contained in this
press release. Dover Corporation undertakes no obligation to update any forward-looking statement.
TABLES FOLLOW
3. 3
DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (in thousands, except per share figures)
Three Months Ended September 30, Nine Months Ended September 30,
2006 2005 2006 2005
$ 1,651,927 $ 1,364,597 $ 4,813,554 $ 3,922,771
Revenue
Cost of goods and services 1,070,569 882,538 3,067,317 2,540,453
581,358 482,059 1,746,237 1,382,318
Gross profit
Selling and administrative expenses 355,264 301,005 1,059,130 900,364
226,094 181,054 687,107 481,954
Operating earnings
Interest expense, net 17,186 16,250 57,932 47,606
Other expense (income), net 2,609 (957) 9,583 (9,398)
Total interest/other expense, net 19,795 15,293 67,515 38,208
Earnings before provision for income
206,299 165,761 619,592 443,746
taxes and discontinued operations
Provision for income taxes 49,991 42,719 173,276 119,622
156,308 123,042 446,316 324,124
Earnings from continuing operations
Earnings (loss) from discontinued operations, net 11,217 (362) (3,054) 69,891
$ 167,525 $ 122,680 $ 443,262 $ 394,015
Net earnings
Basic earnings (loss) per common share:
Earnings from continuing operations $ 0.77 $ 0.61 $ 2.19 $ 1.60
Earnings (loss) from discontinued operations 0.06 - (0.01) 0.34
Net earnings 0.82 0.61 2.18 1.94
Weighted average shares outstanding 203,682 202,572 203,629 203,057
Diluted earnings (loss) per common share:
Earnings from continuing operations $ 0.76 $ 0.60 $ 2.17 $ 1.59
Earnings (loss) from discontinued operations 0.05 - (0.01) 0.34
Net earnings 0.82 0.60 2.16 1.93
Weighted average shares outstanding 205,313 203,918 205,294 204,236
Dividends paid per common share $ 0.19 $ 0.17 $ 0.53 $ 0.49
The following table is a reconciliation of the share amounts used in computing earnings per share:
Three Months Ended September 30, Nine Months Ended September 30,
2006 2005 2006 2005
Weighted average shares outstanding - Basic 203,682 202,572 203,629 203,057
Dilutive effect of assumed exercise
of employee stock options 1,631 1,346 1,665 1,179
Weighted average shares outstanding - Diluted 205,313 203,918 205,294 204,236
Anti-dilutive shares excluded from diluted EPS computation 1,837 3,755 2,252 4,537
