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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
/X/ Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993
Transaction Report Pursuant to Section 13 or 15(d) of the
/ / Securities Act of 1934
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 (Zip Code)
offices)
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
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 with the Commission and (2) has been
subject to such filing requirements for the past ninety days. Yes X No .
--- --
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 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. X
---
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The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of February 28, 1994 was $3,236,712,089.
The number of outstanding shares of the Registrant's common stock as of
February 28, 1994 was 57,179,870.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II, and IV - Certain portions of the Annual Report to
Stockholders for Fiscal Year Ended December 31,
1993 (the "1993 Annual Report").
Part III - Certain portions of the Proxy Statement for Annual
Meeting to be held on April 26, 1994 (the "1994
Proxy Statement").
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PART I
Item 1. BUSINESS
General
Dover Corporation ("Dover" or the "Company") was originally
incorporated in 1947 in the State of Delaware and commenced operations as a
public company in 1954 with four operating divisions, engaged primarily in the
manufacture of metal fabricated industrial products. Primarily through
acquisitions, the Company has grown to encompass over 60 different businesses
which fabricate, install and service elevators, and manufacture a broad range
of specialized industrial products and electronic components and sophisticated
manufacturing equipment. The primary criteria for Dover operating companies is
that they strive to be the market leader in their respective market, meeting
customer needs with superior products and services with appropriate increased
compensation, while achieving long-term earnings growth, high cash flow and
superior return on stockholders' equity.
The Company's businesses are divided into five business segments.
Dover Elevator manufacturers, sells, installs and services elevators primarily
in North America. Dover Resources manufactures products primarily to serve the
automotive, fuel handling and service and petroleum industries. Dover
Industries makes products for use in the waste handling, bulk transport,
automotive service, commercial food service and machine tool industries. Dover
Technologies builds primarily sophisticated automated electronic assembly
equipment and to a lesser degree specialized electronic components. Dover
Diversified builds heat transfer equipment, larger power generation,
sophisticated assembly and production machines, as well as sophisticated
products and control systems for use in the defense, aerospace and commercial
building industries. 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, 1993, see pages 6 through 16 of the 1993
Annual Report, which are hereby incorporated by reference.
During the past five years, Dover has spent approximately $550 million
on acquisitions of which $321 million was expended in 1993. For more detail
regarding acquisitions, see pages 1 through 5 of the 1993 Annual Report as well
as Note 2 to the Consolidated Financial Statements on pages 21-22 of the 1993
Annual Report, which are hereby incorporated by reference.
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Raw Materials
Dover's operating companies use a wide variety of raw materials,
primarily metals, 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
problems, nor are any such problems anticipated.
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 and improve product reliability and reduce production
costs. During 1993, approximately $60 million was spent on research and
development, compared with $68 million and $62 million in 1992 and 1991,
respectively.
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.
Trademarks and Tradenames
Several of the Company's products are sold under various trademarks and
tradenames owned or licensed by the Company. Among the most significant are:
Dover, Heil, Norris, Universal, DEK, Brown & Sharpe, Marathon, OPW, Duncan,
Blackmer, Rotary Lift, Groen, Annubar, Sargent, A-C Compressor and Tipper Tie.
Seasonality
Dover's operations are generally not seasonal.
Customers
Dover's businesses serve thousands of customers, no one of which
accounted for more than 10% of sales. Within each of the five segments, no
customer accounted for more than 10% of segment sales.
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Backlog
Backlog generally is not considered a significant factor in Dover's
businesses, as most products have relatively short delivery periods. The only
exceptions are in those businesses which produce larger and more sophisticated
machines, or have long-term government contractor subcontracts, particularly in
the Diversified Group (Belvac, A-C Compressor, Sargent Controls and Sargent
Technologies) and the Technologies Group (Universal).
Total Company backlog as of December 31, 1993 and 1992 was $710,977,000
and $606,681,000 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. In
addition, since most of Dover's manufacturing operation are in the United
States, Dover usually is a more significant competitor domestically than in
foreign markets. There are some exceptions.
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. 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. Within the other three
segments, there are a few companies whose markets and competition are
international, particularly Wittemann, AOT, Tipper Tie and Belvac.
International
For foreign sales and assets, see Note 3 to the Consolidated Financial
Statements on page 22 of the 1993 Annual Report and information about the
Company's Operations in Different Geographic Areas on page 27 of the 1993
Annual Report, which are incorporated herein by reference. Export sales of
domestic operations were $392 million in 1993 and $432 million in 1992.
Although international operations are subject to certain risks, such as
price and exchange rate fluctuations and other foreign governmental
restrictions, Dover intends to increase its expansion into foreign markets,
particularly with respect to its elevator business, as domestic markets mature.
The countries where most of Dover's foreign subsidiaries and affiliates
are based are Canada, Great Britain and Germany.
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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
materials. 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 beyond normal
requirements.
Employees
The Company had approximately 20,500 employees as of December 31, 1993.
Item 2. DESCRIPTION OF PROPERTY
The number, type, location and size of the Company's properties are shown on
the following charts, by segment.
Number and Nature of
Facilities Square Footage
------------------------ (000's)
Ware- Sales/ ----------------
Segment Mfg. house Service Owned Leased
- ------- --- ----- ------- ----- ------
Elevator 7 9 194 393 1,941
Resources 40 23 17 1,741 410
Diversified 17 2 20 1,186 265
Industries 31 7 20 2,757 208
Technologies 18 - 11 679 431
Locations
---------------------------
North
American Europe Other
-------- ------ -----
Elevator 174 36 -
Resources 68 10 2
Diversified 38 1 -
Industries 44 14 -
Technologies 18 6 5
The facilities are generally well maintained and suitable for the
operations conducted and their productive capacity is 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
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operations and certain of its other businesses which make products used by the
public. In recent years, Dover has also been involved with the Internal
Revenue Service regarding tax assessments for the eight years ended December
31, 1989 and certain patent litigation. 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 13 to the
Consolidated Financial Statements on page 26 of the 1993 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 taken as a whole.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Not applicable.
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 11, 1994, and their positions with the Company for the past five
years are as follows:
Present Position
Name Age & Responsibility
- ---- --- ----------------
Gary L. Roubos 57 Chairman (since August 1989) and Chief Executive Officer and Director;
previously President (through May 1993).
Thomas L. Reece 51 President and Director (since May 1993); previously President of Dover
Resources, Inc.
Edward J. Kata 51 Vice President-Development
John F. McNiff 51 Vice President-Finance and Treasurer
Robert G. Kuhbach 46 Vice President, General Counsel and Secretary (since May 1993); prior to
joining Dover, Mr. Kuhbach was Senior Vice President (later Executive Vice
President and a Director), Secretary and General Counsel
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(through February 1992) of Sudbury, Inc., a Cleveland, Ohio industrial
products company.
Alfred Suesser 61 Controller
John B. Apple 59 Vice President and President of Dover Elevator International, Inc.
Lewis E. Burns 55 Vice President, Director and President of Dover Industries, Inc.
Rudolf J. Herrmann 43 Vice President (since November 1993) and President of Dover Resources, Inc.
(since May 1993); prior thereto, Mr. Herrmann was President of Rotary Lift
division of Dover Industries, Inc.
John E. Pomeroy 52 Vice President (since November, 1993) and President of Dover Technology
International, Inc.
Jerry W. Yochum 55 Vice President and President of Dover Diversified, Inc.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER 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 prices of such
stock and the frequency and the amount of dividends paid during the last two
years, is set forth on Page 32 of the 1993 Annual Report and incorporated
herein by reference.
The number of holders of record of the Registrant's Common Stock as of
February 28, 1994 is approximately 3,100.
Item 6. SELECTED FINANCIAL DATA
The information for the years 1983 through 1993 is set forth in the
Annual Report on pages 30 and 31 and is incorporated herein by reference.
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information set forth in the Annual Report on pages 28 and 29 is
incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information set forth in the Annual Report on pages 17 through 27
is incorporated herein by reference.
Item 9. DISAGREEMENTS 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 "Election
of Directors" in the 1994 Proxy Statement relating to the 1994 Annual Meeting
of Stockholders to be 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 Company" in Part I of this Annual Report on Form 10-K.
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 "Compensation"
in the 1994 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 1994
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
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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 "Election of Directors" in the 1994 Proxy Statement
and is incorporated in this Item 13 by reference.
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 1993 Annual Report, which financial
statements are incorporated herein by reference:
(A) Independent Auditors' Report.
(B) Consolidated balance sheets as of December 31, 1993, 1992
and 1991.
(C) Consolidated statements of earnings for the years ended
December 31, 1993, 1992 and 1991.
(D) Consolidated statements of retained earnings for the years
ended December 31, 1993, 1992 and 1991.
(E) Consolidated statements of cash flows for the years ended
December 31, 1993, 1992 and 1991.
(F) Notes to consolidated financial statements.
(2) Financial Statement Schedules
The following financial statement schedules are included in Part IV of
this report:
Independent Auditors' Report on Schedules and Consent
II - Amounts Receivable from Related
Parties and Underwriters, Promoters and
Employees Other than Related Parties
VIII - Valuation and Qualifying Accounts
IX - Short-term Borrowings
X - Supplementary Income Statement
Information
All other schedules are not required and have been omitted.
(b) No reports on Form 8-K have been filed during the fourth quarter
of the fiscal year ended December 31, 1993.
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(c) Exhibits:
(13) Dover's Annual Report to Stockholders for its fiscal
year ended December 31, 1993.
(21) Subsidiaries of Dover.
(23) Independent Auditors' consent. (See Independent
Auditors' Report on Schedules and Consent)
(24) Powers of Attorney.
SIGNATURES
Pursuant to the requirements of Section 13 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
Gary L. Roubos
By: ------------------------
Gary L. Roubos
Chairman
Date: March 29, 1994
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
- --------- ----- ----
Gary L. Roubos
- ---------------------
Gary L. Roubos Chairman, Chief Executive
Officer and Director
(Principal Executive
Officer) March 29, 1994
John F. McNiff
- ----------------------
John F. McNiff Treasurer
(Principal Financial
Officer) March 29, 1994
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Alfred Suesser
- ----------------------
Alfred Suesser Controller March 29, 1994
(Principal Accounting
Officer)
Thomas L. Reece
- ---------------------
Thomas L. Reece President, Chief
Operating Officer and
Director March 29, 1994
Magalen O. Bryant
- ---------------------
Magalen O. Bryant Director* March 29, 1994
Lewis E. Burns
- ---------------------
Lewis E. Burns Director* March 29, 1994
Michael C. Devas
- ---------------------
Michael C. Devas Director* March 29, 1994
John F. Fort
- ---------------------
John F. Fort Director* March 29, 1994
James L. Koley
- ---------------------
James L. Koley Director* March 29, 1994
George L. Ohrstrom
- ---------------------
George L. Ohrstrom Director* March 29, 1994
Anthony J. Ormsby
- ---------------------
Anthony J. Ormsby Director* March 29, 1994
David G. Thomas
- ---------------------
David G. Thomas Director* March 29, 1994
Robert G. Kuhbach
* By -------------------------
Robert G. Kuhbach
Attorney-in-Fact
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INDEPENDENT AUDITORS' REPORT ON SCHEDULES AND CONSENT
The Board of Directors and Shareholders
Dover Corporation:
Under date of February 22, 1994, we reported on the consolidated balance sheets
of Dover Corporation and subsidiaries as of December 31, 1993, 1992 and 1991
and the related consolidated statements of earnings, retained earnings, and
cash flows of the years then ended, as contained in the 1993 annual
report to stockholders. These consolidated financial statements and our
report thereon are incorporated by reference in the annual report on Form
10-K for the year 1993. In connection with our audits of the aforementioned
consolidated financial statements, we also have audited the related financial
statement schedules listed in answer to Part IV, item 14(A)2 of Form 10-K.
These financial statement schedules are the responsibility of the Company's
management. Our responsibility is the express an opinion on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
In addition, we consent to the incorporation by reference of our above-
mentioned report dated February 22, 1984 in the Registration Statement
(No. 2-58037) on Form S-8 (1974 Incentive Stock Option Plan) in the
Registration Statement (No. 33-11229) on Form S-8 the Prospectus dated
January 28, 1987 (1984 Incentive Stock Option Plan) and in the Registration
Statement (No. 2-91561) on Form S-8 dated July 1, 1984 to the Dover Corporation
Employee Savings and Investment Plan. We also consent to the reference to our
firm under the heading "Financial Statements and Experts" in the Prospectuses.
KPMG Peat Marwick
New York, New York
March 29, 1994
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SCHEDULE II
DOVER CORPORATION AND SUBSIDIARIES
Amounts Receivable from Related Parties
and Underwriters, Promoters, and
Employees Other Than Related Parties
Years ended December 31, 1993, 1992 and 1991
Balance at Balance
beginning at close
of year Additions Deductions of year
------- --------- ---------- -------
(000's omitted)
Year ended December 31, 1993:
Lawrence F. Gray, Sr. (1) $ -- 117 -- $ 117
Year ended December 31, 1992:
John R. Ditterline (2) $ 195 -- $ 100 $ 95
Year ended December 31, 1991:
John R. Ditterline (2) $ 195 -- -- $ 195
Notes:
(1) Unsecured loan to employee, payable on demand, bearing interest at
4.16%.
(2) Loan to employee for purchase of residence, payable on demand, bearing
interest at 8.75%, secured by residence.
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SCHEDULE VIII
DOVER CORPORATION AND SUBSIDIARIES
Valuations and Qualifying Accounts
Years ended December 31, 1992 and 1991
Additions
Balance at charged to Balance
beginning cost and at close
of year expense Deductions of year
------- ------- ---------- -------
(000's omitted)
Year ended December 31, 1993:
Allowance for doubtful accounts 9,753 5,546 5,100(1) 10,199
===== ===== ===== ======
Year ended December 31, 1992:
Allowance for doubtful accounts $9,746 5,316 5,309(1) 9,753
===== ===== ===== =====
Year ended December 31, 1991:
Allowance for doubtful accounts 8,250 7,214 5,718(1) 9,746
===== ===== ===== =====
Notes:
(1) Represents uncollectible accounts written off and reductions of prior
years over provision less recoveries of accounts previously written
off, net of additions and deductions relating to acquired and
divested companies.
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SCHEDULE IX
DOVER CORPORATION AND SUBSIDIARIES
Short-Term Borrowings
Years ended December 31, 1993, 1992 and 1991
Maximum Average Weighted
Weighted amount amount average
Balance average outstanding outstanding interest rate
Catagory of aggregate at end interest during the during the during the
short-term borrowings of period rate period (1) period (2) period (3)
- --------------------- --------- ---- ---------- ---------- ----------
(000's omitted)
Year ended 12/31/93:
Payable to holders
of commercial paper $ 424,825(4) 3.34% $ 424,825 $ 304,179 3.32%
Year ended 12/31/92:
Payable to holders
of commercial paper $ 220,000 3.69% $ 234,000 $ 194,888 3.84%
Year ended 12/31/91:
Payable to holders
of commercial paper $ 126,000 4.81% $ 275,000 $ 185,592 6.21%
Notes:
(1) Represents maximum amount outstanding at any month-end.
(2) Average of 13 month-end balances (including December of previous year).
(3) Weighted average of interest rates on all commercial paper outstanding
at month-end.
(4) Includes $250,000 classified as long-term debt.
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SCHEDULE X
DOVER CORPORATION AND SUBSIDIARIES
Supplementary Income Statement Information
Years ended December 31, 1993, 1992 and 1991
Charged to costs and expenses
-----------------------------
1993 1992 1991
---- ---- ----
(000's omitted)
Maintenance and repairs * * *
Amortization of tangible assets $ 26,062 $ 23,749 $ 29,810
Taxes, other than income taxes and payroll taxes * * *
Royalties * * *
Advertising costs * * *
Notes:
* Amounts not shown are not in excess of 1% of total sales.
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EXHIBIT INDEX
Page
(3)(a) Restated Certificate of Incorporation
and Amendments thereto filed as an
Exhibit 3(a) to Form 10-K for year ended
December 31, 1989 is incorporated by
reference.
(b) By-laws, as amended, filed as an Exhibit
to Quarterly Report on Form 10-Q for period
ended September 30, 1993 is incorporated
by reference.
(10) (a) 1984 Incentive Stock Option and
Cash Performance Program filed as an
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 an Exhibit 4.1 to Form S-8 filed
under Securities Act of 1933 (Reg. 2-91561) is
incorporated by reference.
(13) Dover's Annual Report to Stockholders for its
fiscal year ended December 31, 1993.
(21) Subsidiaries of Dover.
(23) Independent Auditors' Consent. (See Independent
Auditors' Report on Schedules and Consent)
(24) Powers of Attorney
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