Dover (DOV) 20 Oct 222022 Q3 Earnings call transcript

Good morning and welcome to Dover's Third Quarter 2022 Earnings Conference Call.

Speaking today are Richard J. Tobin, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and Chief Financial Officer; and Jack Dickens, Senior Director of Investor Relations. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions] As a reminder, ladies and gentlemen, this conference call is being recorded, and your participation implies consent to our recording of this call.

agree terms, not this disconnect do time. you with please these at If you. Thank like call I turn would to now the over Mr. to Dickens. Jack Please, sir. ahead, go

joining which link available on Thank thank website through version morning, Good and our this our a XX, for replay of be you, are will are audio the and between GAAP call. will everyone, call reconciliations be information, non-GAAP and supplement website. our archived November webcast on An investor adjusted available for included of Gretchen. you measures provides presentation our three materials, months. and Dover in and

Our discussed could will I forward-looking differ in over We assume our current and to a on events statements comments call to those Rich. risks today to SEC our that, due filings. statements Actual With based obligation forward-looking statements. from number will no and are include update the which results turn of expectations. uncertainties,

Good Jack. morning, Thanks, right. All everyone.

the double the we've demand four highlights continued execution chain supply historical delivered start and and constructive at Let's by in approximately end segments rigorous the the year-over-year pressures levels that across that offset performance. three. normalize. which which dynamics in macroeconomic increased are biopharma we in $X.X and several bolt-on of XX% driven months out expected us improving by quarter. relative and tailwinds. many the as revenue, strong billion portfolio technology times most the translation. productivity on chain acquisition margin XX allowed backlog our growth currency great of -- posting remains markets. on the remains are reduce capacity uncertainty, a challenges chains is secular Dover continue this closed to growth to with expectation capital supply and Despite Backlog five year We past the to of to July, that production organic deploying Demand growth robust price/cost revenue our across adds expand supply than the this for to inflationary was and that challenges, performance The lead third up continuing we driven will impact acquisitions. Engineering has offset are more trend quarter over and improvement pursue foreign to attractive balance our cost were with deliver continued businesses the quarter, improve, portfolio, in through to drive that It on endured Malema building of slide the

also to to we of share return preserving excess program for sufficient value-creating million announced accelerated During an repurchase investments. the $XXX capital quarter, shareholders, while liquidity

demand our reflects current conditions are the growing macroeconomic caution outlook. posture management While solid, with

be As and measures inventory we'll such, cost-containment of reducing draw output the for initiating balance proactively to balances businesses down year, several appropriate. where in the

our flexible, XXXX. to Our of times chain has supply capacity XXXX We the production performance demand in lead that match business will is firmly and in production us model to proven. improvements allow prevailing QX believe as within meet ongoing available

foreign exchange rallied of during acceleration We with our of The third full impact our impact share guidance estimated on as $X.XX the EPS negative approximately to the quarter year our most currencies. notable are exchange year and reflect full the revenue is to adjusting trading of dollar per translation earnings. foreign against

show developed costs lower well margin through major investments were strength quarter year-over-year up taking across strong results basis e-commerce the pricing platforms in begin investments the and volume. portfolio the our line and was input on delivered revenue strong portions aftermarket as capital capital geographies our and hold. order X move points XXX as portfolio slide to pricing Products on X. the to goods quarter as The drive we skip Margins as of well Engineered organically cycling as as broad-based expected. in inventory, up in books, slide actions. back actions Let's XX% All-in-all, the expansion and on of productivity top

margins year-over-year but in balance Energy Clean & solid was Revenue components, price/cost volumes and the up below-ground order on overall cost the trajectory energy actions flat fueling, trends North the among reduced retail volumes and a absorption in in were as and by of fixed We roughly above in basis. retail expect fuel to and offset on as lower above improving continue able operators our through and ground in quarter year upward driven were and of in wash, performance environment. America, as shipments by mix clean result the the dispenser clean Fueling to customer margin flat Asia Margins organic their dynamics. Europe caution construction offset was cost transport vehicle business. as macro ground delays well an weakening energy fueling, decisive was the

driven enabled & availability These will actions pricing components. part half X% polymer solid Pumps marking were and strong, which and improving our We very in in organic product through the product we've headwind and and revenue During in were prior mix posted the Imaging improved offering XXX harmonization us its to that business a roll-off this improved base segment Identification, revenue. printers industrial points, medical consumables volumes the this the spare as well non-US of months, processing saw on basis in complexity in began continue to work well reduction XX and to XX%. in the our past meaningfully richness performance actions by cost ID growth. as platform in recovered of given FX quarter. China of operating & & margins margins reduce QX SKUs input actions, thermal in forward. efficiency. recycling were profits first and that dispenser pumps, electronics Process take result Solutions from operational going dispenser service COVID large will and Pricing quarter, precision In actions and coding dollar demand lockdowns reduction by completed and is for improving contributors over XXXX positive by absolute and connectors, quarter. and in enabled parts Imaging negative our global we fixed the European

biopharma the which year-over-year biologic business, the vaccine demand, as in to declined the of biopharma COVID delivered quarter a in COVID last components continues revenue pivot on peak expected, vaccines growing QX year suite As from therapies. industry to

by driven vehicle Our XX% business cooling electrical non-biomedical largely grown and and thermal center in data has connector charger applications. year-to-date, demand

of to On at a approximately demand larger margin proportion Operating despite area we remained and are demand, of plant in the the and quarter revenues the XX% of industrial robust products in QX. strong, commissioning from forecasted have efficiency & growth backlogs posting programs across into Minneapolis organic the finalizing improved the assembly three volume Top a geographies. XX% new from back XXXX. significant be this in volumes, solid on All pricing and segment. Climate and actions businesses Technologies and continued across pricing businesses Sustainable in all line

heat I'll portfolio retail projects and mix improved as materially COX exchangers capacity the systems deployment and continue exchangers. secular and it we on areas a heat Our complexity improved of as pass on Brad and to price and in capital Margins XXX of spares quarter behind and schedule expansion basis volumes, growth and invest remain were XXXX. to product in reduction food productivity can-making points here. equipment result programs up strong beyond in

morning, Good everyone. Rich. Thanks,

Asia profitability, go our our in last as revenue of driven FX from offset The five $XX growth and quarter, EPS. at a by in of our quarter. up organic Slide by $XX million Changes quarter approximately guide top impacted four resulting in our The $XX recovered million our revenue our are sell and in major negative X% market, $X.XX late to a $XX in produce our from X% last contributed China, bridge largest Europe Let's US, our an in in estimated organic was July as $X.XX shows well geographies. organically incremental in acquisitions, of year posted of top growth product was all segments. million to ability full our partially this a quarter. the our divestiture saw from impact to substantial that from solid lockdowns line quarter, X%, X. COVID-driven the today which business to year. up half represents as the until country. was organic or growth increases EPS headwind impact from currency translation to to businesses a of last have X%, decline XX% M&A up up across XX%. our of million We the approximately Asia, X% the foreign in was growth of

currency bottom to On translation the the due year-over-year bookings businesses. across and were down several chart, foreign improved lead times of

the year on year-over-year investments working expenditures at of and on flow million, is Our tax through first cash $XXX the payments, three timing planned of X. Slide on cash Free quarters mostly capital. but statement performance down approximately capital investment, payments in flow sits

We been backlog elevated on balances carrying year, sales. levels shortages our components and raw materials inventory high throughout higher levels receivable and of well the as growing reflective as have input

on We our cash capital also the the are degree receivables. actively working working of balance and liquidate to of through the dependent expect with the of to position down generation bring inventory year of collection timing further our

free the quarter, highest We quarter of cash our in is improve generation flow flow cash expect to year. which historically significantly fourth the

to With working of going into that, However, XXXX. turn to capital back timing take Rich. the exact may liquidation it I'm early

Okay. Thanks, Brad.

to Slide X. move Let's

the and this discuss normalizing, moderate clear a the ago, a were metrics Bookings of column expected Let's top to trends production that's drove we the a comparable the than declined which items chains backlog. quarter very quarter. high performance, the and comparable a the balance the line. demand attention improved and of More XXXX with start that to we story quarter, middle year slide, of of basis I result brand-new for as year-to-year battleground supply a slide. down on your when booking against call backlog were

result orders to in historically extended now these see talked markets and in by continue chain Despite and of normal in hydraulic indicated drivers post-pandemic availability with strong in times near-term notably to of backlog previously, that businesses. due about strength more several were we green fundamental double placing relative and This to at Our availability about much in where extent investment capacity but businesses, to these high Climate & levels, lesser importantly, are quarter a in it sales Sustainability capacity and as growth We've further is our was industrial subcomponents robust to trends demand, Engineered and Products, the chassis on shipments most due some driving component and arrows secular slide. in shortages held back constraints. and prior the to customer than by solutions in pandemic. markets lead driven remains products a demand supply advance constraints, of of multiple the

our We capacity some expanding above are in projected ground and in the the expect. four vaccine different construction we have portions exchangers new has fueling but in production highlighted third heat United degree, been from COX delays, systems to overcome as in weakened customers longer States able expected builds quarter not biopharma the in The taken currently COVID short-term geographies orange, both transition meet into XXXX. the And to demand. pushing we would to than

XXXX continue we on We and to plans. drawdowns and our will elevated, into support move we expect both top the to All-in-all, reconfirmed line. CapEx normalize backlog as remains inventory based

demand. of QX XXXX healthy revenue of that confidence and as by carrying have working earlier, quarterly long-cycle book us you the elements efficiently, and the solid business Additionally, production is a and capital allow visibility slide of and our by see our of give our to segment, performance the XX% on plan will us can mix short booked, Today, backlogs flexing manage mentioned to foundation already our portfolio. production highlighting to about I to we

bridge Let's on slide go to X. the

sources value forecast this double-digit lead shows growth to that year. creation Here our EPS of

of significantly year to offset headwind execution $X.XX this We the strong controls. through expect and FX much cost of

expected are full Fueling are EPS conducting per actions XXXX importantly, year -- is We approximately but beginning in & segment. cost to these our fundamental appropriate, Energy where from expected accretion short-term share. some actions at measures more containment $X.XX The Clean we cost

solid we'll We actions and EPS update additional foundation XXXX. on QX the of share the underway, into our have completed which in-flight a restructuring this benefit repurchases Between current expect carryover year, cost activities call. we

sound portfolio's in As respective view. attractive outgrow ability The markets. next prepare competitive year, various are point structurally participate we from scenarios to that confident we in in markets out-execute niche our for we our a are and and macroeconomic of

organic journey. while portfolio consolidation, variable back-office since XXXX, e-commerce experience. have and costs this a we I operating the providing Session us In our decisions and value creation in that for that, I'd investments inorganic thank which complexity enriching a like optionality dedication been Q&A. continue rescaled multiyear go to our Jack, product reductions increased we've year, and structure demanding spin and provides colleagues hard platforms our Our to for around runway as fixed growth, and the their to environment. cost continued closing, my group in further Dover with customer us line Through strong the to reduce the in are And we globe we'll pushing Question-and-Answer recognize performance want

Instructions] take question our [Operator JPMorgan. first We'll Steve Tusa, from

morning, good Hey, guys.

Good morning.

Hi, Steve.

I how took maybe the that it. you convert $X.XX depending don't like down you of like X%. know, or So that's revenue on total by headwind, something

You benefit to have pretty close some buyback here that. that's

going the the I'm the of the of you're of Is in earnings? else reduction Maybe, low part other underestimating moving maybe there range? anything the to revenue. what's that's end or around, impact So

I of the the FX and been we're Well, all I guess a balance we've year. mean, for taking year, wrong think at

to Look, going build there's some day, at what the to of So caution our related that. backlog. the have end in we're we

adjustment in we've we've and let's -- production been been been think somewhat exceptions our we've somewhat. you I our know running curve. of in supply can during the demand across we in chasing an us working change of to machine are the the balances differences performance some of, We've that all allows posture to performance. quarter, excess capital terms production most which because inventory our kind we've portfolio posture that on QX been seen of down improvements the -- year, Look, see this what, notable you turn with few chain making

Let's QX that liquidate into because, in you confident working and that I'm production know year. capital it what, can performance we push next restart

So the we capital reduced the of we get get the and this benefit performance the year, in XXXX. benefit working production of

for in I'm going do think demand to clearly, We'll comments we make the But that. caution yet. to what at it's material develop down. raw if themselves, they're costs next marketplace. I costs, disagree to do. to in the prudent They any the you fundamentally of on is going data-driven. wait our Fed we that XXXX not come have about now. what's results But thing think I with logistics doing some have say quarter terms what look all

don't in coming are seen believe see over that the past continue the months data-driven. of down. they I -- now But the We to housing they're think inflation the seen if had XX they is that that So we increase going now, impact. rates. we've and Well, it in impact

year. demand if So our looking that accommodate lowering into by we then moving next balances other that they're have and absolutely no to for inventory production than destruction, posture

So story. a I bad it's think news good news,

into that into under the working we're exclusively get would flow we think almost the can right XXXX. now, We trajectory on year, capital of the which been and we have pushing I that cash XXXX. some capital this pull liquidation working

Right.

of bit quarter you turn that as under-absorption production kind of like down? kind in it's of a So an fourth basically, the

That's correct.

one Okay. last And one... then Said differently?

you right. Say way but that's any want,

as end if in well. looking expected Maybe will year? snap does you What price/cost some next it some price pricing sure like than year? carryover I'm a And far on end this bit next of kind all line that, there's of the so up year the there's -- quarter. this up was little better what

capital a this be a on on expect half Yeah. portfolio, I half we all and goods are inventory dynamics that those of we at in discussed mean, and demand the first because the that that the Price/cost, more largely materials, been pushback of previous that see -- both you of Products We importantly, the in as but saying calls. the forward can Engineered unit, wasn't portion see and result And to don't balances right raw the year of the of through. look in of performance it. that's think now the any on roll I We terms take pricing, reflective there back refrigeration pricing exposure that go had we because the of year. going

comp good XXXX. get we from firm, the half pretty holds a going everything if into of credit So first a perspective

Okay. year would positive you expect? price/cost next And that's

price/cost that of assuming next I expect positive year, demand to in have is first half reasonable. the

okay. Yes, lot, a Appreciate it. guys. Great, thanks

Thanks.

from comes Andy next Our from Kaplowitz question Citigroup.

Good morning, guys.

Andy. Hi,

you've you about you know weakness could I talk cadence recently Rich, the seeing? about of been some expected orders fueling. above-ground talked in

today the they how the did talked slowing about October? in you CapEx end here XXXX? to your little see what about customers You've going And biopharma a of toward be telling continuing might any into more in of But quarter signs spend difficult. orders on are you

that it's we've areas But hearing those customers than called what this across in place much things. every into less are Those the that only robust of project have mean our large, is the from portfolio, availability we're were total that, time. have are our we have slowdown. and two think seeing and CapEx year-ago not one, X.XX, cost not providing seen and specifically we taken we're I The a we because at slide. this we've quarter-to-quarter, long we're inflation. dramatic too that year No. by crazy seen while mean, that customers customers numbers I out Other like were a it But than that too I seeing the CapEx labor products undertaken we're --

we're about as going of we're above-ground what know into some getting, see is so got gets are. to to where then particularly we going there's demand more XXXX and And inflight, signal in push we're you this of, fueling what now almost We're the what, cautious That's demand side. to finish that this everybody you in see view the going XXXX. we

tell the into product our to all side, biopharma reducing that we just started attention of consumable results and your channel every -- a customers' the earlier. will I'd provide product. much And we you On call

that's So the we direct think I of time, the at are consume manufacturers as And that some 'Well, in of wouldn't proxy.' a they're those as long products. of over take systems say, look curve I that eventually, a ahead bit going run, demand. and a to our units little terms

get of going that So what of I Steve XXXX. at you There's at is -- the if the disagree ago, I margin to right destruction. enough Andy, is that moment we get into demand tailwind to they moving day, overall, end now system as a they're can't But to this this overcorrect, in said But think a Fed doing they point. going want. they're the what the

So are -- and all about needles pins now our on customers and right of now. that

it. So we just can in as such. flexible to we only operating scenario front have the a foot to we is up get for And and and in and if do QX thing, I that because we think on so do one that be prepare a catch QX, model, have

helpful. that's for maybe then a focusing And just Rich, DCST second. on

You of sort concerns reflecting And in about retail be mentioned there, -- visibility what Obviously, that. And of three improving can Maybe All core your margin to exchangers. are there's in too. refrigeration? all you around you you talk had the seems of sort mentioned in good businesses. some Belvac. seeing been heat you that expansion in

margin that going do how forward think you business? So about in

we that's we we -- hat we think that that It to. to think only I on took to can get said I it... five hang our guess mean, but were I I years, going finally Well, where got

Better late than never.

capacity. for it a chunk made Well, you -- So right? have the it actually just units going business replacement versus it's that look the into whole We'll slowdown sold Christmas is QX of have margin we bit demand But spares for a disaster. more big is that the in in COVID because refrigeration, margins. Belvac, accretive at Goal everybody base built-out to look, we're there look I as And geographical went our to But why expanding would of still is little That's remains point, we've not Belvac we COX, has chart, deliveries season we stops heat if At nonetheless, think when backlog a I backlog demand mean, when exponentially. to XXXX. parts, there. region. it. some construction increased robust. think but the we're profile installed secular that every exchangers, pivot well projects. look, capacity And expanding mean, through behind the in I got of is we at to have doing

been all because heat I volume just a beneficiary in the think of you it capacity pumps. the at they're step-up goes announcing worldwide of amount change. we technology expansions talked significant into a product about major the before. that for of look And We've if manufacturers,

So we feel about it. good

Rich. Appreciate it,

Thanks.

comes Sprague Research. from next Our from Vertical question Jeff

first, time you said that to statement. I Hey, just this of anything, that I least Hi, going about did you provocative with, throw thanks. businesses morning. or suppose you're portfolio at closed name out you comment at a one know Good obviously, Rich, it somewhat names optionality there. on a but conference. don't earlier

want maybe us elaborate So just be think as you to might on table and headed? you what the on things where lay that

Yeah. years couple Jeff. a of the It's since missing been I portfolio them, questions. got we was

about put run recommendation and was that when a can't descale to talking questions begin into in after portfolio restart did it. think portfolio, we we answer to I Look, XXXX mean, get the then used amount back problem part about you we while. because that that to gave the of a I I you the that decided So to scale

when had be spun asked and we bigger was, opens that a existing the have, that. rescale So fact if to an look, out can we to we firm-wide have so which moves, portfolio, going cost you where about of absorption hey, that of lot Apergy then significant but to got extent an don't about that we there's much the answer take remember, of we the issue. can up restructuring some worry questions avenue the off value And portfolio, also that to create we again to part accommodate we portfolio was the

that's So are. where we

that to more makes more back of of that pre-Apergy terms possible we've If it we're were the on that scale XXXX. fact variety you take close going and a a revenue, rebuilt we and top in scenarios a than in look total of is where where in worth the lot totality where now, portfolio spin at was

Interesting. right. All

maybe -- for off going just the something the Fed maybe take as thinking the to you about tougher, cliff So said, here. bracing is us

cost on would now restructuring bit of in little preparatory potentially further you things color what areas if the & south, Maybe how So of prepare you right Clean leverage Fueling. pull. a could and actions Energy concentrated are going other potential just you think

The -- in Sure. Clean the customers projects Fueling bit signals getting mean, unique. when through were that did were that QX I we a of from year. were is we & all of Energy the one down, the a balance surprised the because little plenty bit went our there we demand was --

in spent decisions we mean, make right? So the some taking amount around QX. position into At it portfolio. been to we of which we us for them planning same broader the and in to money we've now, amount in world, that the significant revitalizing fueling retail post-EMV spent significant the a kind adapt a a basically I reducing forced allows years things. future of January I a business variety for in preparing of mean, and on doing were time other SKUs, footprint of time, scenario us on a actions the pulling its management

had pull to about we the or what forward it did coming by extent, it months. certain that a of we nonetheless. part demand but was in reaction environment, four to just I to was three think So

you But to XXXX. balance only demand think performance I I levers our which in preservation, look of that I But back could want margin see can pull. there we well. portfolio, at go have of that are did in pull, that think of take quite that March to that I variety On destruction I a the XXXX we terms don't we significant we've a proven that -- we that scenario. if if don't the I think

one. quick to XX% The one stack backlog, up that of how just normal? Maybe QX Great. in does relative

historic, cycle. more. it's or the I on is then But than over I cycle if Well, short XX% mean backlog our but double whether look, -- it's it's map, mean, long all depending

look revenue, quite got but right, because there. backlog generally its carry you that's If has actually consumable that printing and it's don't a relative chart, ID backlog, We higher any business. to at low

between longer you're schedules dynamics bifurcation up them. in goods They're the five going between but shorter lead between times. see there's and a So lead with aggregate, capital bigger times of to build all different

Appreciate the it. Right. Thanks for time.

Yes.

Our comes America. Bank Andrew from next Obin from question of

morning. guys, good Hi

Andrew. Hi,

cancellation question backlogs, that Hey, forward, we We've shows, industry participants going it a industry seems adjusting structurally. view that that to think some they just a backlog been on backlog. of we've just about less going the how lead with sort participants that just probably and of just a There's bunch the seems live permanently are themselves there's bigger industry same penalties. and about, some much because heard you industry visibility, And the realized longer as it time, right? how are At longer Can times. protecting also XXXX? think from maybe big you've of Thanks. just in will now the the do about have if as talk anything you into maybe it, process terms, So can given you reducing backlog there just evolving A, pricing, you are that now pricing, of structure of order do terms conditions, like picture? that, if with fact backlog, live to you sort changed probably this backlog even

having quite backlog. Well, there's de tour with nothing the force. wrong Look, that's

you're having we between if then reprice of the whether is debate not you because really And with kind pricing cost did the you had whether the a inflation. having end There or and recall, ran issue thing. it, get are their of And and could XXXX this a we managing of had backlog. choice rather it everybody the of could at backlog, of it with complexities it have stack the not beginning grand issue suffered you at of Given into then the where day. out I'd competitive backlog, thought and coming backlog you large this away which we year your

I think of that chain, think of risk I that's have of supply bit think been of, going the which shortening the a backlogs because kind impact there. little to we've I an beneficiary of supply chain the

but difficult where always So I I certain businesses of Maag pure they're company again, time way products be to these it's company the are the would but compare same elevated think days. backlogs our the very to because XXX mentioned portfolio. have going in XX, to within build unless is -- portfolio, players Belvac,

you about to we being the the So raw and need the you've where orders in even price get just able and backlog place basically time. make deliveries up don't consumer on to because volume it's opposed the you correctly to the -- materials, marketing get order in as before Maags, it to got subcomponents worked have all buy

So there's we I of touch the mean, breadth lot to of I all a scenarios. all, there, it because the portfolio, think Andrew. unpack our

I not the now. that in the in is actions I can we're right? backlog into QX. little deliver we trends that now. let's QX pivot QX, backlog half The it think a it we caution -- up look can't project that think and XXXX, so the that we now caught That's make of of that of taking right have need really back in make that is to chain we're you bit saying basically we're at supply then that making

where going love Anybody's my players? Thanks. they you're looks -- you end terms of flux. changed high-level market of It's in And in willing to markets just approach And you to even Just what the cost to they How question. M&A your next from rates this -- discussion of the like. restricted? do high-yield interest seeing and what market in on with are I'm M&A Are have are, market? PE Thank you. sure M&A anything are capital?

is in discovery difficult, option. anybody's Yes. right be right? know demand price than anymore. months this ago of, can't sold better And you've would thing and multiple, have Well, now now revenue what got Because XXXX have this is to then going is as I and whole most, I got this what issue crazy could it and you XX boy,

I reflect outlook our just the banks. you interest our at end to at Fundamentally, just -- all. we're doing current look else adjustments day. I rates, some think I one's everything mean of not make basically the you're So changed and really haven't but we much. that things mean, and rate to WACC the rates no at buying Sure, discount we'll muddling. big with the all that's debt

hopefully So opportunities medium on can the we're we the -- still pipeline close we've in in some got term. that

So foot, front the discovery difficult. is still on but we're price the

it Let me put just that way.

Thanks so much.

Thanks.

Next from from Ritchie Joe question Sachs. comes Goldman

Hi, thanks. Good morning, guys.

Joe.

Rich, just question start. a Hey. maybe to higher-level

potentially about expansion. in maybe capacity Obviously, the about in is you're does today. capacity having how the slow? just how you manage context curious environment levels of and to slowdown thinking XXXX, I'm demand that talked potential in a guys good if excess the the backlog ultimately, You

we're up I what referenced Well, capacity Yes. look, it. mean, I got where we're -- when So, okay? expanding where Minneapolis that mean, I we've doing believe think I is demand, we're secular we -- in

and same you look about heat at growth the the the think with we've If go that rate I back seen thing the transcript there, exchangers.

time, having But we're fundamentally time can same and said we've it again ramp I've to that got doing at footprint where again. begun after that, XX about over demand of the big we've seen this where months, So, out what last COVID high we actioning due a for. confidence capacity expanded start taking we're the

on cost can't we're I in square tell basis, I'll bet taking you So, -- as adding. out haven't we're but and as much foot I arguably, footprint that a fixed XXXX

it. Got

Okay. and you the be I for curious, calling quarters would just biopharma my I'm the and basically you question the bit just talk helpful. can to of more transition of comp out transition now how a this been about you'll across pumps against see That's follow-on business? trough guess lower in up portfolio? business. you we've in we fact in last a you've toughest that pumps on ago. -- piece that continue process And And just hit super much your year that longer if little think margins maybe do your a couple that

Yes.

the we segment Some growth a is But anyway, XX% versus missed margins, itself me. business. were we of full look, margin think XX.X% that the God help that year on we XX%.

-- were get let's get trying not say, we think you look some what at excited. QX that because back of and quarter-by-quarter. the ago year volatility fact saying of a were we it, but all We've QX, You'll seen -- right, to go I if

for what impact margin we you margin getting saying to think that sub-XX% we've I we're balance I out period up. to XX%, of was QX segment the during the because performance we of the what actually this mix with businesses businesses industrial of let tell in that new normal But how itself. lot, you, actually kept kind portfolio, much meaningfully that got the that lifted XX% that up the time very posted liquidate. biopharma because margins make XX% is got I'm is we've down, those which right, is the pleased capacity were of performance see down inventory just the a can't

ago, matter happened that -- going this has their that profile us to if has would seen operators on to compression XX% years have the meaningful. have year. industrial the is, have But three fact which been the significantly, allowed the improved would margin we're us for the margin side of we the So, is do

point, we look quarter a now pain margin as be I headwind. at the this so potential at a another to this of take -- if look overall enhancement on side, as what opposed So, we'll take XXXX at for that we biopharma it. --

Rich. Thanks helpful. That’s it. Got

Thanks.

Scott question comes next Research. Our Melius from from Davis

good guys. Hey, morning

Hi Scott.

we there's But translation it or extreme that is Most -- adjusted? the questions that's FX Rich, is of a being my now answered. some been -- just mostly And trade or have still have so global gotten it on actually side, issue?

don't in vast on believe done… because step you I FX, out companies, he's can the finding with if I'll translation. majority transaction Look, XX it's But meaningful. is Brad imagine let having operating

of of dynamics said line EPS. that on was the mostly the happens fast what about we at impacts to too. correct. guide, translation. $X.XX to about here $X.XX as we And again, forecast we forecast, be saw our know, and it's about really midpoint the on That's and top our It's so dollar of script, And in changed it in as strength talked the you the the QX No.

significant. of so now. you unique, So of that and we're even to at all Scott. been significant But could look would now where and but lots at at year, ways in think it though, I change. it's And look our more I unique don't that I dollar, regard. you, the way. guide it's think don't we're FX tell we're the strength There's

not. Likely

a at M&A a there's least, the back are the assets wide stab So a are is counterbid traditional -- -- maybe People Rich folks just made the to at by not the there's bit I your take some folks. bit. Is bit, you that a enough side, up by to of available, is And you question out we're something of it's portfolio? I little a that a -- field want ask. hunkering lens, is lens is wide down little I on some how there. But mean comments, where told but a existing you guess,

No. a And I answer long ways. I the in two think of your guess string? how question I is question mean, is -- I'll piece

day. a I think end of the run. it's right that We're to at fundamental a the got got believe to that manufacturer business be we we've a

it, in that are to to end to over similar whatever or and a got left time would to about value making area industrials necessarily we've the the we much in built today. the we're not we've manufacturing now market go now and do, out to the the processes we something tacklers. in be that's doesn't right We how new chasing So ability if allows businesses floor what And of into business to mean, know our have that for any and But it's issue like-minded extract XXXX. participate knows than that good we But turns got materially we're to we know factory meaning an than extract we've team we or thematics. larger management a that on back-office of blockers it a that back are the back XXXX more what meaningful knitting. us engine scale, synergy take costs I have undertaken out at. on

Good helpful. it. Appreciate you. That’s luck Thank guys.

Thanks.

from Our Fargo. Joe Wells next comes question O'Dea from

I raws morning. that you're some seeing come just and in? versus raws and that flows on from cost wanted would environment. about to of of I to get base things. through, good the to timing start components Hi, And much but your how see of putting in of piece you're down assume lower not a pressure then cost sure cost kind when and we you them the what the piece could side raws revisit suppliers I'm talk

material, of up hung inventory There purchaser of about getting the issue as an seeing -- QX. raws raw benefit raws The you're we talk we're because a in now. back was in

positive for the the see you price/cost raw fact roll-forward priced plus we the we're and QX, Now that on in now it, side.

change, don't kind on bit demand subcomponents we On would down the in see reflect the pricing their the a of yet map. then exceeds that We the over be was component harder supply. subcomponents, pricing. to it's come our If because currently, on that some a of to lot suppliers

chain also. want standoff for product, of so product. part we're the in that going And well, you're see. is everybody between, to now, right the a We'll pay you So

now, pricing. on be go seeing forward. our the right yet, I it but subcomponents and through of raw that We're dependent So purchasing we getting cycling guess, we're the volume, not benefit of will on inventory reduced material as

the QX. Energy as sharing? that something looks compares mean of we of out, that. the out, be you're seeing magnitude and magnitude And cost it. on just margin cadence Fueling make and of cost willing the what like think how like degree margin cadence could XXX sort -- some about & the to the magnitude then currently touch it about And something lift, then this early to additional basis sure and to talk Got of just kind of to you're the as on Maybe I the on Clean impact is benefit a point properly.

absorption You cost negative won't that other it's buffering the see the by fixed it in the down. QX fact than production taking

would it, see see can't but segment that QX, it you you then seen out in that cost -- the segment. compression margin a taking see you in in see action, the you'll what have what and we're of some if So you margin,

across We subject QX, terms expect the to we in of for production remain that performance. to portfolio what do

we going Day we're to for set to change let's And do rollover a business get wait and Day, not Joe, upside I have the takeout. Investor the think we cost there. in to XXXX It's is guidance benefit And that the at what I longer-term bridge do clarify model. haven't the fundamental targets. think a and because until we so margin because And it's we'll you Investor just

Thank you.

Dray Next from RBC from Deane question comes Markets. Capital

Thank you. Good morning, everyone.

morning. Hi. Good

you impact got Hey, as customers couple go But It's Rich, clarification as then order questions. want And don't is much. advance questions. lead a Andy's a there have decline back to any you've to hearing improve in We're I bookings. the of to in times? modest.

orders. fewer So their dynamic out? you also that units -- playing seeing in Are and

despite pricing lot sizes Not is on are of to units wants transactional out healthy end sizes was components write what fact and everybody down I by buildup think Why? No a mean, at to lot but were is warning everybody. orders we -- X.X%. better, it's hope one. down then the because of -- the business, a it's that are there, natural. the we the the months going look, going advance, our backlog up, come the and that's day, fewer With get they order the going products And way. chain that the in to six book-to-bills units, one's everybody recognizing the supply I uncertainty that when this no Deane, which But in

are the your utilization, that's a customers as last getting product. more about opposed to, for is, give So go discussion you're to the order back saying it were capacity patterns to traditional And months. the not.' have me with back our or we to 'We're lot our and don't what goes discussions where you a XX We not orders, going of customers

but you're And for yet, you the it. have thought then have that through availability? numbers not are the Just outlook, in on of even how for seeing any in European just place couple your you maybe there Got contingencies and next quarters? it fuel

We a of Europe. are manufacturer footprint point small in a view from

So mean, have we're an it's same. Europe Europe cautious for the through and cautious -- just not we I have are a as It's in But we been chemical input all not cost, quarter. about exposure to manufacturer. demand fuel the the but demand the about

down taking -- working And and that's phenomenon. performance so, is a part capital, of whole part liquidating this discussion of European that production about

related you That's mix had non-COVID helpful. You've biopharma? production, clarify COVID vaccine exposure? the non-COVID? to pump less et if boost. a one. Could is But just cetera, How your on last your and COVID production, how just And side there's is

to going break it. I'm Yes. not

actually, think can send don't as I want and can follow-up, a my that head. top in to at you I the I you clarification. because, guys go through the have with work don't it of

up let So they'll for the work that -- guys you, it. let me take and you through

you. Thank Sure.

welcome. You’re

Research. from Our next Coe comes from Nigel Wolfe question

Thanks. morning, Good everyone.

Hi.

Thanks the always. Hello. for details, as

talking So, kind Rich, of you -- about selectively in the as -- you're we fueling. some obviously, reduction cost across --

taking a hiring? view But mean, the CapEx? thinking disruption. other sounds And dab brakes on other you Are tempered that in demand measures, selective. investing you're you for to macro? more CapEx, think But You're we've maybe XXXX? on about down I measures prepare the what talking your Fed. It about in CapEx about uncertain are I any about like any

Sure.

demand under the scenario. any been think in and down is XXXX, I to it going CapEx would have be

be was but got regardless. for top my year, that, the and going of the it we've we've we what in done next pipe I we've think -- that what in I done think the down full haven't got -- budget what pipe head, the to off

So, aware region in-flight frankly. by not be and already anything out capital announced, I'm then Yes, on I going selectively of hiring, hanging that business. yes, selectively think, and the by we've there. let mostly maintenance it's to

I progressively for that doing during we've quarter, that, the sure. been think

XQ? And if I system that get the can you've year-end? much talent for can just -- build inflation was on then, out a mainly get inventory, inventory understand would there if Q-o-Q. But talked you're slight that the about address year-end? just you -- XXXX the not out was how do And by you maybe Brad, think how Okay. impact. you production do think sure of expecting I'm can be you much by XQ we

it. take I'll Okay.

a get a in is expect I mentioned lot of the goods Brad -- of script, off, And inventory. think we and The don't going down. of in going the how materials, have receivables. have issue be, we What depending up we going first inventory to cadence hung we have don't much -- raw is the ton WIP that's finished on to revenue, as that, right? come is to

performance we've think discussed that down already we we push why. So, hard I taken on because to -- production inventory

between going for going you got of to the versus inventory be into if meaningful. of think because the know monetize working I benefit careful don't capital it's So, to Brad drawdown I is size I to be you. don't about the But the it think receivables.

long and It's to we What -- timing build it's to some it the is time out, think take it. we're to I element I what Yes, exactly was inventory. but take said time would a to say it's the it. taken going proactive that's on

is lot fourth going highest I to It quarter a like think look we've our done historically. is quarter.

time, in XX%, revs six free cases, to cash quarter. with you'll flow seven of find over some last back teens, look in years fourth high the you If out in the

first of We'll into well take could combination Like Our in of do. mirror some comments, the could receivables that. into the part we could XXXX. inventory it liquidating to take the see taking the the goal is prepared how and I into of take the said out

guys. Thanks helpful. That’s Okay.

Julian And Barclays. from question comes Mitchell our last from

to just and inventory Thanks sort try morning. for on circle I the good of wanted Maybe and flow in. Hi, back cash dynamics. me squeezing

of while the sort that about and protect down you're just versus we try underproduction as pernicious receivables? you be toggling assume impact at of we when levels when of customers' just and thinking -- well wondered might just the of your at flow, have think sort match on your excess should inventories the call there cash And do you next the also And as customer into, your flow cash sub-par maybe perhaps sell of I or when free sort inventory maybe where excess bringing the where earnings distributor most you they inventory the areas looking there, inventory. well? and map and you think look as conversion year if sort some and So, excesses you are you're that out

demand Well, okay, where to So, that? start hopefully, if If that inventory, means is take year, go next robust. it's into back we the because inventory we production liquidate on comes down, to right? that

we're XXXX about So, going demand knows. not talk -- but because to nobody

called we can we chain. supply that is inventory. lot can biopharma turned inventory not a in of And What and goods that what finished was kind there in excess don't the inventory we we are the don't down, that's OEM see off. of of from to OEM Our saw see product product is excess But inventory be we on distribution, make -- make side. aware we

finished only our inventory we we order. is raw that So, is that The an have for thing have goods materials.

going demand. get being So, excess I'm materials that over got to consumed will that here overly the of not concerned depending not It sitting get we've are the consumed raw time. on velocity

Understood. Thanks. the and restructuring the around just And follow-up my cost-out.

at unchanged is the I your year $X.XX restructuring now. So think guide for expense

that's from and before, savings share $X.XX year. the was next it But like the seems it guide up think probably just cost I down. you're restructuring talking count coming

the generating So booking you're you're I'm not booked if up restructuring P&L expenses. restructuring or the how just stepping P&L not wondering those savings

is within of What Julian, the full not restructurings year benefit benefit restructuring saying those of the XXXX. the XXXX -- about the in and EPS benefit. that I'm announced expenses. No. talking is I'm given We've in chart you restructuring

that's any other take XX-month forward that not on is, to tell what a and fact that We restructuring of is you we projects year. in will not the matter next It charge, announced. has we we're been we going restructuring obligated have got time. working that a The when announce include restructuring feel does on the benefit benefit

understand. I

in -- could savings in that or the for itself? year, of the measures see next reflected some we that restructuring expenses So XXXX in

Yes, sure.

Full year benefit of it, for sure.

Richard some XoXX, is also that But as of said. in

So it straddles both.

saying. guess, It's counted, we're not I double is what

Yeah, yeah.

you. Thank clear. That’s

of End Q&A Welcome.

That question-and-answer period conclude call. you. XXXX and conference Thank Dover's quarter third our earnings does

have wonderful You and line may day. your now at time, disconnect a this