Dover Corporation

Good morning and welcome to Dover's third quarter 2024 earnings conference call. Speaking today are Richard J. Tobin, President and Chief Executive Officer, Brad Serapak, Senior Vice President and Chief Financial Officer, Jack Dickens, Senior Director, Investor Relations. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, please press star and then the number one on your telephone keypad. If you would like to withdraw your question, please press star and the number two. As a reminder, ladies and gentlemen, this conference is being recorded and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you, and I would now like to turn the call over to Mr. Jack Dickens. Please go ahead, sir.

Thank you, Connie. Good morning everyone and thank you for joining our call. An audio version of this call will be available on our website through November 14th and a replay link of the webcast will be archived for 90 days. Our presentation today is on a continuing operations basis to exclude the impact of our divested waste hauling equipment business from historical results. Please reference the 8K filed on October 10th for further information. Our comments today will include forward looking statements based on current expectations. Actual results and events could differ from those statements due to a number of risks and uncertainties, which are discussed in our SEC filings. We assume no obligation to update our forward-looking statements. And with that, I will turn the call over to Rich.

Thanks, Jack. Good morning, everyone. Let's start with the performance highlights on page three. Overall, the quarter was modestly better than our internal forecast, which I'll cover in the upcoming segment. Result slides, top-line performance was broad-based across the portfolio. We are especially pleased that the rotation from our longer cycle businesses to our growth platforms has continued to drive positive margin mix for the total portfolio. We expect that to be an underlying theme as we head into 2025. Segment margin performance for the quarter was solid at 22.6% and represents an all-time high for Dover's consolidated portfolio. Bookings were up 5% organically in the quarter with particular strength in clean energy, thermal connectors, CO2 systems, and biopharma components, further bolstering our positive mix outlook. Adjusted EPS from continued operations was up 6% to $2.27 per share. During the quarter, we completed the divestiture of our environmental solutions group business, reducing our exposure to the capital goods sector. As you can see in the bottom right of the slide, the reconciliation of this impact to our full year adjusted EPS guidance from continuing operations. As a result of this transaction, we will exit 2024 with record capital deployment, firepower, providing us with a variety of value creation opportunities going forward. Our outlook remains constructive for the balance of the year. Our third quarter performance has given us room to manage demand seasonality to drive cash flow optimization through year end by thoughtfully managing capacity utilization. Our setup for 2025 is compelling with positive portfolio rotation into higher margin businesses as we lap easy long cycle comps through the year. This is further augmented by our exceptional balance sheet optionality to pursue value creating capital deployment strategies. Let's skip to slide five on segment performance. Engineered products posted strong top line performance on volume growth and vehicle services In industrial winches, aerospace and defense was lower in the period due to shipment timing and a difficult comparable core. Margin was down modestly because of margin mix on reduced aerospace and defense volumes. Clean energy and fueling was down 1%. Organic is positive performance in clean energy components and North American retail fueling was offset by lower volumes in vehicle wash and retail fueling equipment in Europe and Asia. Bookings were positive in the quarter as below-ground retail fueling volumes were inflecting positively along with cryogenic components. Margin was flat as favorable product mix was offset by near-term integration costs of our most recent acquisitions. We expect this dynamic to have a material positive margin swing as we complete our integration activities through 2025. Imaging and identification posted an excellent quarter on solid marking and coding performance in the US and Europe. New printer shipments inflected positively during the quarter, which is a good signal for customer capital spending. Margin performance was robust as management actions on cost to serve and footprint optimization continued to drive incremental margins. Pumps and process solutions was up 2% organically on robust shipments and thermal connectors, precision components, biopharma connectors, and pumps. Biopharma revenue is up mid-teens year-to-date and over 30% versus the comparable quarter of the prior year. As forecasted, polymer processing equipment was down in the period, all in. Pumps and process solutions segment bookings were up 15% organically in the quarter as biopharma and growth platform cycles inflected positively. Segment revenue mix drove 200 basis points of margin improvement on excellent performance, production performance on volume growth in biopharma and thermal, margin mix from the F.W. Murphy acquisition, and tight cost controls in the polymers business. Revenue was down in the quarter in climate and sustainability technologies as solid demand in food retail systems was offset by tough comps in beverage can making equipment and weak demand in the broader HVAC complex, particularly in European residential heat pumps on our braze plate heat exchanger business. We had hoped to see positive bookings inflection in heat exchangers in the quarter, but that was not the case. So we've taken down our forecast to the back half of the year in that business to preserve production performance for 2025. The frustrating results as we were able to hold segment margins flat despite the lower volumes due to excellent performance in our retail refrigeration business that was augmented by exceptionally good shipment rates in CO2 systems. Despite the short-term challenges, we like the setup going into 2025 based on increasing CO2 demand where we expect bookings to inflect materially higher together with market recovery and heat exchangers, both of which are margin accretive. I'll pass it to Brad here.