Investor Contact: Media Contact:
Investor Contact: Media Contact: Jack Dickens Adrian Sakowicz Vice President - Investor Relations Vice President - Communications (630) 743-2566 (630) 743-5039 jdickens@dovercorp.com asakowicz@dovercorp.com
— Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the third quarter ended September 30, 2026. All comparisons are to the comparable period of the prior fiscal year, unless otherwise noted.
1 Q3 and year-to-date 2026 and 2025 adjusted earnings from continuing operations exclude after-tax purchase accounting expenses, restructuring and other costs, and gain on dispositions. * Totals, change and per share data may be impacted by rounding. For the quarter ended September 30, 2026, Dover generated revenue of $2.2 billion, an increase of 8% (+7% organic). GAAP earnings from continuing operations of $337 million increased by 11%, and GAAP diluted EPS from continuing operations of $2.50 was up 14%. On an adjusted basis, earnings from continuing operations of $388 million were up 7% and adjusted diluted EPS from continuing operations of $2.88 was up 10%.
For the nine months ended September 30, 2026, Dover generated revenue of $6.5 billion, an increase of 8% (+6% organic). GAAP earnings from continuing operations of $888 million increased by 8%, and GAAP diluted EPS from continuing operations of $6.56 was up 10%. On an adjusted basis, earnings from continuing operations of $1.1 billion were up 9% and adjusted diluted EPS from continuing operations of $7.89 was up 11%.
A full reconciliation between GAAP and adjusted measures and definitions of non- GAAP and other performance measures are included as an exhibit herein.
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Dover delivered strong results in the third quarter. Top-line growth accelerated, led by our secular growth markets in artificial intelligence and power generation infrastructure, energy transition, single-use biopharma, semiconductor manufacturing, and space launch. This strength was complemented by broad-based performance across the portfolio, including improving line rates in food retail as we completed the footprint consolidation.
"Order performance was a highlight, consistent with the trend we have seen throughout the year. Bookings increased across all five segments and again outpaced shipments, reinforcing our confidence in the forecast. Notably, a significant portion of our backlog is scheduled for delivery in 2027, giving us a solid foundation heading into next year.
"We remained active in capital deployment. We continued to invest behind greenfield expansions in high-growth end markets, along with productivity and footprint optimization projects. During the quarter, we announced two bolt-on acquisitions that expand our capabilities in attractive markets and add manufacturing capacity in key strategic locations, and we opportunistically repurchased over $330 million of our shares. Our balance sheet and liquidity position provide significant flexibility to deploy additional capital.
"We are on track to deliver double-digit adjusted EPS growth in 2026, in line with our long-term algorithm. As we begin planning for 2027, the constructive demand backdrop and our order book, together with carryover benefits from actions taken this year, set the stage for continued value creation for our shareholders."
In 2026, Dover expects to generate GAAP EPS in the range of $8.93 to $9.08 (adjusted EPS of $10.60 to $10.75), based on full year revenue growth of 7% to 8% (organic growth of 5% to 6%).
Dover will host a webcast and conference call to discuss its third quarter results at 9:30 A.M. Eastern Time (8:30 A.M. Central Time) on Thursday, October 22, 2026. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's results and its operating segments can be found on the Company's website.
Dover is a diversified global manufacturer and solutions provider with annual revenue of over $8 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 70 years, our team of approximately 24,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV."
This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, general economic conditions and conditions in the particular markets in which we operate; supply chain constraints and labor shortages that could result in production stoppages; inflation in material input costs and freight logistics; the impacts of natural or human-induced disasters, acts of war, terrorism, international conflicts, and public health crises or other future pandemics on the global economy and on our customers, suppliers, employees, business and cash flows; changes in customer demand and capital spending; competitive factors and pricing pressures; our ability to develop and launch new products in a cost-effective manner; changes in law, including the effect of tax laws and developments with respect to trade policy and tariffs; our ability to identify, consummate and successfully integrate and realize synergies from newly acquired businesses; acquisition valuation levels; the impact of interest rate and currency exchange rate fluctuations; capital allocation plans and changes in those plans, including with respect to dividends, share repurchases, investments in research and development, capital expenditures and acquisitions; our ability to effectively deploy capital resulting from
dispositions; our ability to derive expected benefits from restructurings, productivity initiatives and other cost reduction actions; the impact of legal compliance risks and litigation, including with respect to product quality and safety, cybersecurity and privacy; and our ability to capture and protect intellectual property rights. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2025, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
QUARTERLY EARNINGS FROM CONTINUING OPERATIONS TO ADJUSTED SEGMENT EBITDA RECONCILIATION (NON-GAAP)
2026 Q3 Q3 YTD Organic Engineered Products -1.6 % 0.8 % Clean Energy & Fueling 12.1 % 10.6 % Imaging & Identification 2.2 % 0.7 % Pumps & Process Solutions 1.2 % 0.3 % Climate & Sustainability Technologies 17.9 % 13.7 % Total Organic 7.1 % 5.7 % Acquisitions 0.5 % 1.2 % Currency translation -0.1 % 1.2 % Total* 7.5 % 8.1 %
Adjusted EPS Guidance Reconciliation* Range 2026 Guidance for Earnings per Share $8.93 $9.08 from Continuing Operations (GAAP) Purchase accounting expenses, net 1.16 Restructuring and other costs, net 0.51 2026 Guidance for Adjusted Earnings per Share from Continuing Operations $10.60 $10.75 (Non-GAAP)
In an effort to provide investors with additional information regarding our results as determined by GAAP, management also discloses non-GAAP information that management believes provides useful information to investors. Adjusted earnings from continuing operations, adjusted diluted earnings per share from continuing operations, total segment earnings, total segment earnings margin, adjusted segment EBITDA, adjusted segment EBITDA margin, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of adjusted earnings from continuing operations, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for earnings from continuing operations, diluted earnings per share from continuing operations, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.
The items described in our definitions herein, unless otherwise noted, relate solely to our continuing operations.
Adjusted earnings from continuing operations represents earnings from continuing operations adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits and gain/loss on dispositions. Purchase accounting expenses are primarily comprised of amortization of intangible assets. We exclude after-tax purchase accounting expenses because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. While we have a history of acquisition activity, our acquisitions do not happen in a predictive cycle. Exclusion of purchase accounting expenses facilitates more consistent comparisons of operating results over time. We believe it is important to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or management believes they are not indicative of the Company's ongoing operating costs or gains in a given period.
Adjusted diluted earnings per share from continuing operations or adjusted earnings per share from continuing operations represents diluted earnings per share from continuing operations adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits and gain/loss on disposition.
Total segment earnings is defined as the sum of earnings before purchase accounting expenses, restructuring and other costs/benefits, gain/loss on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes for all segments. Total segment earnings margin is defined as total segment earnings divided by revenue.
Adjusted segment EBITDA is defined as segment earnings plus other depreciation and amortization expense, which relates to property, plant, and equipment and intangibles, and excludes amounts related to purchase accounting expenses and restructuring and other costs/benefits. Adjusted segment EBITDA margin is defined as adjusted segment EBITDA divided by revenue.
Management believes the non-GAAP measures above are useful to investors to better understand the Company’s ongoing profitability as they better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of adjusted earnings from continuing operations equals free cash flow divided by adjusted earnings from continuing operations. Management believes that free cash flow and free cash flow ratios are important measures of liquidity because they provide management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue and trends between periods. We do not provide a reconciliation of forward-looking organic revenue to the most directly comparable GAAP financial measure pursuant to the exception provided in Item 10(e)(1)(i)(B) of Regulation S-K because we are not able to provide a meaningful or accurate compilation of reconciling items. This is due to the inherent difficulty in accurately forecasting the timing and amounts of the items that would be excluded from the most directly comparable GAAP financial measure or are out of our control. For the same reasons, we are unable to address the probable significance of unavailable information which may be material. IS - 10
Bookings represent total orders received from customers in the current reporting period and exclude de-bookings related to orders received in prior periods, if any. This metric is an important measure of performance and an indicator of revenue order trends.
We use the above operational metric in monitoring the performance of the business. We believe the operational metric is useful to investors and other users of our financial information in assessing the performance of our segments. IS - 11
Full text with the tables
Exhibit 99.1
Investor Contact: Media Contact:
Jack Dickens Adrian Sakowicz
Vice President - Investor Relations Vice President - Communications
(630) 743-2566 (630) 743-5039
jdickens@dovercorp.com asakowicz@dovercorp.com
DOVER REPORTS THIRD QUARTER 2026 RESULTS
DOWNERS GROVE, Ill., October 22, 2026
— Dover (NYSE: DOV), a diversified global manufacturer, announced its financial
results for the third quarter ended September 30, 2026. All comparisons are to
the comparable period of the prior fiscal year, unless otherwise noted.
($
in
m…
e… Th… Ni…
p… Mo… Mo…
s… En… En…
d… Se… Se…
U… 30, % 30, %
G… 20… 20… Ch… 20… 20… Ch…
──────────────────────────────────────────────────────────────────────────────
R… $ 2,… $ 2,… 8 % $ 6… $ 5… 8 %
E…
f… 337 303 11 % 8… 8… 8 %
c…
o…
D…
E… 2.… 2.… 14 % 6… 5… 10 %
c…
o…
N…
O…
r… 7 % 6 %
c…
A…
e…
f… 388 361 7 % 1… 9… 9 %
c…
o…
A…
d…
E… 2.… 2.… 10 % 7… 7… 11 %
f…
c…
o…
1 Q3 and year-to-date 2026 and 2025 adjusted earnings from continuing operations
exclude after-tax purchase accounting expenses, restructuring and other costs,
and gain on dispositions.
* Totals, change and per share data may be impacted by rounding.
For the quarter ended September 30, 2026, Dover generated revenue of $2.2
billion, an increase of 8% (+7% organic). GAAP earnings from continuing
operations of $337 million increased by 11%, and GAAP diluted EPS from
continuing operations of $2.50 was up 14%. On an adjusted basis, earnings from
continuing operations of $388 million were up 7% and adjusted diluted EPS from
continuing operations of $2.88 was up 10%.
For the nine months ended September 30, 2026, Dover generated revenue of $6.5
billion, an increase of 8% (+6% organic). GAAP earnings from continuing
operations of $888 million increased by 8%, and GAAP diluted EPS from continuing
operations of $6.56 was up 10%. On an adjusted basis, earnings from continuing
operations of $1.1 billion were up 9% and adjusted diluted EPS from continuing
operations of $7.89 was up 11%.
A full reconciliation between GAAP and adjusted measures and definitions of non-
GAAP and other performance measures are included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Dover
delivered strong results in the third quarter. Top-line growth accelerated, led
by our secular growth markets in artificial intelligence and power generation
infrastructure, energy transition, single-use biopharma, semiconductor
manufacturing, and space launch. This strength was complemented by broad-based
performance across the portfolio, including improving line rates in food retail
as we completed the footprint consolidation.
"Order performance was a highlight, consistent with the trend we have seen
throughout the year. Bookings increased across all five segments and again
outpaced shipments, reinforcing our confidence in the forecast. Notably, a
significant portion of our backlog is scheduled for delivery in 2027, giving us
a solid foundation heading into next year.
"We remained active in capital deployment. We continued to invest behind
greenfield expansions in high-growth end markets, along with productivity and
footprint optimization projects. During the quarter, we announced two bolt-on
acquisitions that expand our capabilities in attractive markets and add
manufacturing capacity in key strategic locations, and we opportunistically
repurchased over $330 million of our shares. Our balance sheet and liquidity
position provide significant flexibility to deploy additional capital.
"We are on track to deliver double-digit adjusted EPS growth in 2026, in line
with our long-term algorithm. As we begin planning for 2027, the constructive
demand backdrop and our order book, together with carryover benefits from
actions taken this year, set the stage for continued value creation for our
shareholders."
FULL YEAR 2026 GUIDANCE:
In 2026, Dover expects to generate GAAP EPS in the range of $8.93 to $9.08
(adjusted EPS of $10.60 to $10.75), based on full year revenue growth of 7% to
8% (organic growth of 5% to 6%).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its third quarter
results at 9:30 A.M. Eastern Time (8:30 A.M. Central Time) on Thursday, October
22, 2026. The webcast can be accessed on the Dover website at
dovercorporation.com. The conference call will also be made available for replay
on the website. Additional information on Dover's results and its operating
segments can be found on the Company's website.
ABOUT DOVER:
Dover is a diversified global manufacturer and solutions provider with annual
revenue of over $8 billion. We deliver innovative equipment and components,
consumable supplies, aftermarket parts, software and digital solutions, and
support services through five operating segments: Engineered Products, Clean
Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and
Climate & Sustainability Technologies. Dover combines global scale with
operational agility to lead the markets we serve. Recognized for our
entrepreneurial approach for over 70 years, our team of approximately 24,000
employees takes an ownership mindset, collaborating with customers to redefine
what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the
New York Stock Exchange under "DOV."
FORWARD-LOOKING STATEMENTS:
This press release contains "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995, as amended. All statements
in this document other than statements of historical fact are statements that
are, or could be deemed, "forward-looking" statements. Forward-looking
statements are subject to numerous important risks, uncertainties, assumptions
and other factors, some of which are beyond the Company's control. Factors that
could cause actual results to differ materially from current expectations
include, among other things, general economic conditions and conditions in the
particular markets in which we operate; supply chain constraints and labor
shortages that could result in production stoppages; inflation in material input
costs and freight logistics; the impacts of natural or human-induced disasters,
acts of war, terrorism, international conflicts, and public health crises or
other future pandemics on the global economy and on our customers, suppliers,
employees, business and cash flows; changes in customer demand and capital
spending; competitive factors and pricing pressures; our ability to develop and
launch new products in a cost-effective manner; changes in law, including the
effect of tax laws and developments with respect to trade policy and tariffs;
our ability to identify, consummate and successfully integrate and realize
synergies from newly acquired businesses; acquisition valuation levels; the
impact of interest rate and currency exchange rate fluctuations; capital
allocation plans and changes in those plans, including with respect to
dividends, share repurchases, investments in research and development, capital
expenditures and acquisitions; our ability to effectively deploy capital
resulting from
dispositions; our ability to derive expected benefits from restructurings,
productivity initiatives and other cost reduction actions; the impact of legal
compliance risks and litigation, including with respect to product quality and
safety, cybersecurity and privacy; and our ability to capture and protect
intellectual property rights. For details on the risks and uncertainties that
could cause our results to differ materially from the forward-looking statements
contained herein, we refer you to the documents we file with the Securities and
Exchange Commission, including our Annual Report on Form 10-K for the year ended
December 31, 2025, and our Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K. These documents are available from the Securities and Exchange
Commission, and on our website, dovercorporation.com. The Company undertakes no
obligation to publicly update any forward-looking statement, whether as a result
of new information, future events or otherwise.
INVESTOR SUPPLEMENT - THIRD QUARTER 2026
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands)
Three Nine
Months Months
Ended Ended
Septem… Septem…
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Reven… $ 2,233,… $ 2,077,8… $ 6,477,… $ 5,993,4…
Cost
of
goods 1,330,… 1,244,2… 3,895,… 3,596,1…
and
servi…
Gross 903,426 833,594 2,582,… 2,397,3…
profit
Selli…
gener…
and 484,238 456,441 1,465,… 1,369,2…
admin…
expen…
Opera… 419,188 377,153 1,116,… 1,028,0…
earni…
Inter… 28,870 27,239 87,450 81,638
expen…
Inter… -16,520 -17,804 -45,102 -55,993
income
Gain
on — — — -4,644
dispo…
Other
incom… -13,848 -18,525 -32,750 -26,663
net
Earni…
before
provi… 420,686 386,243 1,107,… 1,033,7…
for
income
taxes
Provi…
for 83,866 82,951 219,172 211,058
income
taxes
Earni…
from 336,820 303,292 888,114 822,663
conti…
opera…
Loss
from
disco… -3,489 -1,296 -4,104 -10,782
opera…
net
Net $ 333,331 $ 301,996 $ 884,010 $ 811,881
earni…
IS - 1
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
… …
… … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ $ $ … … … … … …
$ — $ $ $ … … … … … …
$ … $ $ $ … … … … … …
$ … $ $ $ … … … … … …
$ — $ $ $ … … … … … …
$ … $ $ $ … … … … … …
$ … $ $ $ … … … … … …
… … … … … … …
$ … $ $ $ … … … … … …
… … … … … … …
… … … … … … …
$ … $ $ $ … … … … … …
IS - 2
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
… …
… …
──────────────────────────────────────────────────────────────────────────────
… $ … $
… …
… …
… …
… …
… …
… $ … $
… $ … $
… …
… …
… …
… …
… …
… …
… …
— —
… …
… …
… …
… …
… …
… $ … $
… … …
% % %
… … …
% % %
… … …
% % %
… … …
% % %
… … …
% % %
… … …
% % %
IS - 3
DOVER CORPORATION
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
… …
… … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ $ $ … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
— … … — … — …
— … … — … — …
$ … $ $ $ … … … … … …
$ … $ $ $ … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
— … … — … — …
— — — — … — …
$ … $ $ $ … … … … … …
IS - 4
DOVER CORPORATION
QUARTERLY ADJUSTED SEGMENT EBITDA (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
… …
… …
──────────────────────────────────────────────────────────────────────────────
… $ … $
… …
… …
… … …
% % %
… $ … $
… …
… …
… … …
% % %
… $ … $
… …
… …
… … …
% % %
… $ … $
… …
… …
… … …
% % %
… $ … $
… …
… …
… … …
% % %
… $ … $
… …
… …
… … …
% % %
IS - 5
DOVER CORPORATION
QUARTERLY EARNINGS FROM CONTINUING OPERATIONS TO ADJUSTED SEGMENT EBITDA
RECONCILIATION (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
…
… … … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ $ $ … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
— … … — … — …
… … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
$ … $ $ $ … … … … … …
IS - 6
DOVER CORPORATION
REVENUE GROWTH FACTORS AND ADJUSTED EPS GUIDANCE RECONCILIATIONS (NON-GAAP)
(unaudited)
Non-GAAP Reconciliations
Revenue Growth Factors
2026
Q3 Q3 YTD
Organic
Engineered Products -1.6 % 0.8 %
Clean Energy & Fueling 12.1 % 10.6 %
Imaging & Identification 2.2 % 0.7 %
Pumps & Process Solutions 1.2 % 0.3 %
Climate & Sustainability Technologies 17.9 % 13.7 %
Total Organic 7.1 % 5.7 %
Acquisitions 0.5 % 1.2 %
Currency translation -0.1 % 1.2 %
Total* 7.5 % 8.1 %
* Totals may be impacted by rounding.
2026
Q3 Q3 YTD
Organic
United States 12.6 % 10.9 %
Europe -3.0 % -4.1 %
Asia 15.1 % 6.9 %
Other Americas -7.0 % 1.8 %
Other -1.1 % -1.7 %
Total Organic 7.1 % 5.7 %
Acquisitions 0.5 % 1.2 %
Currency translation -0.1 % 1.2 %
Total* 7.5 % 8.1 %
* Totals may be impacted by rounding.
Adjusted EPS Guidance Reconciliation*
Range
2026 Guidance for Earnings per Share $8.93 $9.08
from Continuing Operations (GAAP)
Purchase accounting expenses, net 1.16
Restructuring and other costs, net 0.51
2026 Guidance for Adjusted Earnings per
Share from Continuing Operations $10.60 $10.75
(Non-GAAP)
* Per share data and totals may be impacted by rounding.
IS - 7
DOVER CORPORATION
QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)
(unaudited)(in thousands)
Quarterly Cash Flow
… …
… … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ $ $ … … … … … …
… … … … … … …
… … … … … … …
Quarterly Free Cash Flow (Non-GAAP)
… …
… …
──────────────────────────────────────────────────────────────────────────────
… $ … $
… …
… $ … $
… … …
% % %
… … …
% % %
… … …
% % %
… … …
% % %
IS - 8
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
… …
… … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ $ $ … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
… … … … … … …
$ … $ $ $ … … … … … …
IS - 9
Non-GAAP Measures Definitions
In an effort to provide investors with additional information regarding our
results as determined by GAAP, management also discloses non-GAAP information
that management believes provides useful information to investors. Adjusted
earnings from continuing operations, adjusted diluted earnings per share from
continuing operations, total segment earnings, total segment earnings margin,
adjusted segment EBITDA, adjusted segment EBITDA margin, free cash flow, free
cash flow as a percentage of revenue, free cash flow as a percentage of adjusted
earnings from continuing operations, and organic revenue growth are not
financial measures under GAAP and should not be considered as a substitute for
earnings from continuing operations, diluted earnings per share from continuing
operations, cash flows from operating activities, or revenue as determined in
accordance with GAAP, and they may not be comparable to similarly titled
measures reported by other companies.
The items described in our definitions herein, unless otherwise noted, relate
solely to our continuing operations.
Adjusted earnings from continuing operations represents earnings from continuing
operations adjusted for the effect of purchase accounting expenses,
restructuring and other costs/benefits and gain/loss on dispositions. Purchase
accounting expenses are primarily comprised of amortization of intangible
assets. We exclude after-tax purchase accounting expenses because the amount and
timing of such charges are significantly impacted by the timing, size, number
and nature of the acquisitions the Company consummates. While we have a history
of acquisition activity, our acquisitions do not happen in a predictive cycle.
Exclusion of purchase accounting expenses facilitates more consistent
comparisons of operating results over time. We believe it is important to
understand that such intangible assets were recorded as part of purchase
accounting and contribute to revenue generation. We exclude the other items
because they occur for reasons that may be unrelated to the Company's commercial
performance during the period and/or management believes they are not indicative
of the Company's ongoing operating costs or gains in a given period.
Adjusted diluted earnings per share from continuing operations or adjusted
earnings per share from continuing operations represents diluted earnings per
share from continuing operations adjusted for the effect of purchase accounting
expenses, restructuring and other costs/benefits and gain/loss on disposition.
Total segment earnings is defined as the sum of earnings before purchase
accounting expenses, restructuring and other costs/benefits, gain/loss on
dispositions, corporate expenses/other, interest expense, interest income and
provision for income taxes for all segments. Total segment earnings margin is
defined as total segment earnings divided by revenue.
Adjusted segment EBITDA is defined as segment earnings plus other depreciation
and amortization expense, which relates to property, plant, and equipment and
intangibles, and excludes amounts related to purchase accounting expenses and
restructuring and other costs/benefits. Adjusted segment EBITDA margin is
defined as adjusted segment EBITDA divided by revenue.
Management believes the non-GAAP measures above are useful to investors to
better understand the Company’s ongoing profitability as they better reflect the
Company's core operating results, offer more transparency and facilitate easier
comparability to prior and future periods and to its peers.
Free cash flow represents net cash provided by operating activities minus
capital expenditures. Free cash flow as a percentage of revenue equals free cash
flow divided by revenue. Free cash flow as a percentage of adjusted earnings
from continuing operations equals free cash flow divided by adjusted earnings
from continuing operations. Management believes that free cash flow and free
cash flow ratios are important measures of liquidity because they provide
management and investors a measurement of cash generated from operations that is
available for mandatory payment obligations and investment opportunities, such
as funding acquisitions, paying dividends, repaying debt and repurchasing our
common stock.
Management believes that reporting organic revenue growth, which excludes the
impact of foreign currency exchange rates and the impact of acquisitions and
dispositions, provides a useful comparison of our revenue and trends between
periods. We do not provide a reconciliation of forward-looking organic revenue
to the most directly comparable GAAP financial measure pursuant to the exception
provided in Item 10(e)(1)(i)(B) of Regulation S-K because we are not able to
provide a meaningful or accurate compilation of reconciling items. This is due
to the inherent difficulty in accurately forecasting the timing and amounts of
the items that would be excluded from the most directly comparable GAAP
financial measure or are out of our control. For the same reasons, we are unable
to address the probable significance of unavailable information which may be
material.
IS - 10
Performance Measures Definitions
Bookings represent total orders received from customers in the current reporting
period and exclude de-bookings related to orders received in prior periods, if
any. This metric is an important measure of performance and an indicator of
revenue order trends.
We use the above operational metric in monitoring the performance of the
business. We believe the operational metric is useful to investors and other
users of our financial information in assessing the performance of our segments.
IS - 11