• Revenue of $311 million in Q4-18, up 17% year-over-year
  • Net income of $23 million and adjusted net income of $28 million in Q4-18
  • Diluted EPS of $0.29 and adjusted diluted EPS of $0.36 in Q4-18
  • Adjusted EBITDA of $78 million in Q4-18, up 37% year-over-year with adjusted EBITDA margins improving 370 basis points to 25%
  • Full year 2018 net income of $94 million, and adjusted EBITDA of $296 million
  • Cash from operating activities of $71 million in Q4-18
  • $25 million of term loan debt repayment in Q4-18, $45 million repaid in the last two quarters of 2018           

THE WOODLANDS, Texas, Feb. 18, 2019 (GLOBE NEWSWIRE) -- Apergy Corporation (“Apergy”) (NYSE: APY) today reported net income of $22.6 million in the fourth quarter of 2018, compared to net income of $61.2 million in the fourth quarter of 2017. The fourth quarter of 2017 included a net tax benefit of $49.3 million related to U.S. tax reform.

Diluted earnings per share in the fourth quarter of 2018 was $0.29 and includes after-tax charges of $5.3 million, or $0.07 per diluted share, related to spin-off and restructuring activities. Adjusted diluted earnings per share in the fourth quarter of 2018 was $0.36, an increase of 50% from $0.24 in the fourth quarter of 2017.

Revenue was $311.2 million in the fourth quarter of 2018, an increase of $46.0 million, or 17%, compared to $265.2 million in the fourth quarter of 2017, and a decrease of $5.3 million, or 2%, compared to $316.5 million in the third quarter of 2018.

Adjusted EBITDA was $77.8 million in the fourth quarter of 2018, an increase of $21.2 million, or 37%, compared to $56.6 million in the fourth quarter of 2017, and a decrease of $0.6 million, or 1%, compared to $78.4 million in the third quarter of 2018. Adjusted EBITDA margin was 25.0% in the fourth quarter of 2018, an increase of 370 basis points year-over-year and 20 basis points sequentially.

Cash from operating activities was $70.9 million in the fourth quarter of 2018, compared to $34.8 million in the fourth quarter of 2017, and $34.3 million in the third quarter of 2018. In the fourth quarter of 2018, Apergy used available cash to repay $25 million of term loan debt, as well as fund a payment of $7.7 million associated with tax liabilities incurred as part of the spin-off transaction. Apergy expects no further material payments associated with tax liabilities incurred as part of the spin-off transaction.

          
    Three Months Ended   Variance 
(dollars in thousands, except per share amounts) Dec. 31, 2018  Sept. 30, 2018  Dec. 31, 2017  Sequential Year-over-year 
Revenue$311,202 $316,468 $265,195  (2)% 17% 
               
Net income attributable to Apergy$22,571 $25,263 $61,155* (11)% (63)% 
Diluted earnings per share attributable to Apergy$0.29 $0.33 $0.79  (12)% (63)% 
               
Adjusted net income attributable to Apergy$27,896 $28,591 $18,311  (2)% 52% 
Adjusted diluted earnings per share attributable to Apergy$0.36 $0.37 $0.24  (3)% 50% 
               
Adjusted EBITDA$77,759 $78,384 $56,585  (1)% 37% 
Adjusted EBITDA margin 25.0%  24.8%  21.3%  20 bps 370 bps 
               
Net cash provided by operating activities$70,868 $34,318 $34,845 $36,550$36,023 
Capital expenditures$15,035 $13,945 $7,209 $1,090$7,826 
       
*Three months ended Dec. 31, 2017 includes a $49.3 million net tax benefit related to U.S. tax reform, and lower interest prior to Apergy’s spin-off into a separate public company. 
  

“In spite of declining oil prices and increasing macroeconomic uncertainty, we executed well in the fourth quarter,” said Sivasankaran “Soma” Somasundaram, President and Chief Executive Officer. “Our strong execution, combined with our differentiated product offering, allowed us to exceed the top-end of our fourth quarter adjusted EBITDA guidance range by approximately $3 million.

“On a year-over-year basis, our Production & Automation Technologies segment fourth quarter revenue increased 15%, powered by our high quality artificial lift portfolio and the ongoing adoption of our digital technologies. Compared to the year ago period, our Drilling Technologies segment revenue increased 24%, or approximately two and half times the increase in the worldwide rig count. Growth in this segment was driven by continued customer demand for our technologically advanced polycrystalline diamond cutters and steadily increasing bearings adoption.

“During the fourth quarter, we generated strong cash from operating activities of $71 million, and repaid $25 million of term loan debt. Our continued focus on cash flow generation, combined with our disciplined capital management, allowed us to repay $45 million of debt during the last two quarters of 2018.

“This past year was a transformational year for Apergy. We established Apergy as a strong stand-alone publicly traded company and delivered solid financial results. In addition, we positioned Apergy for continued success through solid progress on our growth initiatives and further expanding our competitive moats.  

“As we look into 2019, we believe that traction on our growth initiatives and solid cash generation will help us to achieve differentiated performance in the market. We expect our growth will moderate in the first quarter of 2019 driven by slower market activity in the beginning of the quarter. Accordingly, our outlook for the first quarter of 2019 is consolidated adjusted EBITDA between $69 and $73 million, which at the mid-point is an increase of 11% from the first quarter of 2018. The first quarter of 2018 did not include incremental stand-alone corporate costs. We expect market activity to progressively improve through 2019 resulting in another year of strong results.”

     
 Three Months Ended Variance 
(dollars in thousands) Dec. 31, 2018  Sept. 30, 2018  Dec. 31, 2017 Sequential Year-over-year 
Production & Automation Technologies             
  Revenue$235,364 $241,214 $204,206 (2)% 15% 
  Operating profit$18,646 $24,257 $466 (23)% N/M 
  Operating profit margin 7.9%  10.1%  0.2% (220) bps 770 bps 
  Adjusted segment EBITDA$50,469 $51,523 $37,162 (2)% 36% 
  Adjusted segment EBITDA margin 21.4%  21.4%  18.2% 0 bps 320 bps 
              
Drilling Technologies             
  Revenue$75,838 $75,254 $60,989 1% 24% 
  Operating profit$26,882 $26,209 $19,250 3% 40% 
  Operating profit margin 35.4%  34.8%  31.6% 60 bps 380 bps 
  Adjusted segment EBITDA$29,540 $28,926 $22,252 2% 33% 
  Adjusted segment EBITDA margin 39.0%  38.4%  36.5% 60 bps 250 bps 
N/M – not meaningful.             
              

Production & Automation Technologies

In the fourth quarter of 2018, Production & Automation Technologies revenue increased $31.2 million, or 15%, year-over-year driven by volume and growth initiatives in our artificial lift products and strong adoption of our digital products. Revenue from digital products was $32.5 million in the fourth quarter of 2018, an increase of $11.6 million, or 56%, compared to $20.9 million in the fourth quarter of 2017. Segment operating profit increased $18.2 million year-over-year. Adjusted segment EBITDA increased $13.3 million, or 36%, year-over-year primarily driven by revenue growth and cost discipline, with adjusted segment EBITDA margin expanding to 21.4% from 18.2% in the prior year period.

On a sequential basis, revenue decreased $5.9 million, or 2%, primarily due to expected seasonally lower artificial lift volume and lower spending by customers in the quarter. Segment operating profit decreased $5.6 million, or 23%, due to lower revenue and $1.9 million of higher restructuring costs. Adjusted segment EBITDA decreased $1.1 million, or 2%, sequentially due to the seasonably lower revenue.

Drilling Technologies

In the fourth quarter of 2018, Drilling Technologies revenue increased $14.8 million, or 24%, year-over-year as a result of increased worldwide rig count and continued diamond bearings growth. Year-over-year, segment operating profit increased $7.6 million, or 40%, and adjusted segment EBITDA increased by $7.3 million, or 33%, as a result of increased volume combined with focused cost discipline.

On a sequential basis, revenue increased by $0.6 million, or 1%. Segment operating profit increased $0.7 million, or 3%, sequentially. Adjusted segment EBITDA increased by $0.6 million, or 2%, due to productivity initiatives during the quarter.

Full Year 2018 Results Summary

  Twelve Months Ended    
(dollars in thousands, except per share amounts) Dec 31, 2018  Dec. 31, 2017  Variance 
Revenue$1,216,646 $1,010,466  20% 
          
Net income attributable to Apergy$94,041 $111,734* (16)% 
Diluted earnings per share attributable to Apergy$1.21 $1.43  (15)% 
          
Adjusted net income attributable to Apergy$112,006 $74,046  51% 
Adjusted diluted earnings per share attributable to Apergy$1.44 $0.95  52% 
          
Adjusted EBITDA$296,465 $221,089  34% 
Adjusted EBITDA margin 24.4%  21.9%  250 bps 
          
Net cash provided by operating activities$163,900 $76,050 $87,850 
Capital expenditures$57,918 $36,654 $21,264 
     
*Twelve months ended Dec. 31, 2017 includes a $49.3 million net tax benefit related to U.S. tax reform, and lower interest expense prior to
Apergy’s spin-off into a separate public company.
 
 


  Twelve Months Ended
    
(dollars in thousands) Dec. 31, 2018  Dec. 31, 2017  Variance 
Production & Automation Technologies         
  Revenue$931,081 $782,813  19% 
  Operating profit$75,918 $26,890  182% 
  Operating profit margin 8.2%  3.4%  480 bps 
  Adjusted segment EBITDA$195,497 $144,488  35% 
  Adjusted segment EBITDA margin 21.0%  18.5%  250 bps 
          
Drilling Technologies         
  Revenue$285,565 $227,653  25% 
  Operating profit$98,620 $74,317  33% 
  Operating profit margin 34.5%  32.6%  190 bps 
  Adjusted segment EBITDA$109,657 $86,267  27% 
  Adjusted segment EBITDA margin 38.4%  37.9%  50 bps 
          

Other Business Highlights

  • Apergy was recognized as the leader in total customer satisfaction in oilfield products for 2018-19 in a survey conducted by EnergyPoint Research, an independent customer satisfaction research firm
  • Awarded a large multi-year tender for progressive cavity pump solutions in Latin America
  • Fifty-five patents were issued to Drilling Technologies in 2018, thirteen were issued in the fourth quarter of 2018
  • Currently expanding diamond bearings manufacturing capacity to meet robust demand
  • Launched SmartenTM rod lift controller retrofit kit targeting an upgrade opportunity for over 10,000 existing well controllers
  • Released Spotlight for high speed engines, expanding our compressor monitoring footprint to the adjacent engine monitoring market
  • Completed spin-off transition and exited all services agreements with Dover Corporation

Conference Call Details

Apergy Corporation will host a conference call on Tuesday, February 19, 2019, to discuss its fourth quarter and full year 2018 financial results. The call will begin at 10:00 a.m. Eastern Time. Presentation materials that supplement the conference call are available on Apergy’s website at www.investors.apergy.com.

To listen to the call via a live webcast, please visit Apergy’s website at www.apergy.com. The call will also be available by dialing 1-888-424-8151 in the United States and Canada or 1-847-585-4422 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference Apergy conference call number 8776 832.

A replay of the conference call will be available on Apergy’s website. Also, a replay may be accessed by dialing 1-888-843-7419 in the United States and Canada, or 1-630-652-3042 for international calls. The access code is 8776 832#.

Basis of Presentation

For periods prior to May 9, 2018 (the “Separation”), our results of operations, financial position and cash flows are derived from the consolidated financial statements and accounting records of Dover Corporation (“Dover”) and reflect the combined historical results of operations, financial position and cash flows of certain Dover entities conducting its upstream oil and gas energy business within Dover’s Energy segment, including an allocated portion of Dover’s corporate costs. Our financial statements have been presented as if such businesses had been combined for all periods prior to the Separation. These pre-Separation combined financial statements may not include all of the actual expenses that would have been incurred had we been a stand-alone public company during the periods presented prior to the Separation and consequently may not reflect our results of operations, financial position and cash flows had we been a stand-alone public company during the periods presented prior to the Separation. All financial information presented after the Separation represents the consolidated results of operations, financial position and cash flows of Apergy.

About Non-GAAP Measures

This release presents information about Apergy’s adjusted EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, adjusted segment EBITDA margin, adjusted net income attributable to Apergy, and adjusted diluted earnings per share attributable to Apergy, which are non-GAAP financial measures made available as a supplement, and not an alternative, to the results provided in accordance with generally accepted accounting principles in the United States of America (“GAAP”). See Reconciliations of GAAP to Non-GAAP Financial Measures included in the accompanying financial tables for the reconciliation of each non-GAAP financial measure to its most directly comparable financial measure in accordance with GAAP.

Adjusted EBITDA and adjusted segment EBITDA are defined as, or as a result of, net income excluding income taxes, interest income and expense, depreciation and amortization expense, separation and supplemental benefit costs associated with the spinoff from Dover Corporation, royalty expense incurred only prior to the spinoff, and restructuring and other related charges. Adjusted EBITDA margin and adjusted segment EBITDA margin are defined as adjusted EBITDA and adjusted segment EBITDA, respectively, divided by revenue.

Adjusted net income attributable to Apergy and adjusted diluted earnings per share attributable to Apergy are defined as net income attributable to Apergy and earnings per share attributable to Apergy, respectively, excluding separation and supplemental benefit costs associated with the spinoff from Dover Corporation, royalty expense incurred only prior to the spinoff, and restructuring and other related charges.

References to net income, diluted earnings per share, adjusted net income and adjusted diluted earnings per share are exclusive of our non-controlling interests.

These non-GAAP financial measures are included to help facilitate comparisons of Apergy’s operating performance across periods by excluding items that do not reflect the core operating results of our businesses. As such, Apergy’s management believes making available non-GAAP financial measures as a supplemental measurement to investors is useful because it allows investors to evaluate Apergy's performance using the same methodology and information used by Apergy management.

About Apergy

Apergy is a leading provider of highly engineered equipment and technologies that help companies drill for and produce oil and gas safely and efficiently around the world. Apergy's products provide efficient functioning throughout the lifecycle of a well - from drilling to completion to production. Apergy’s Production & Automation Technologies offerings consist of artificial lift equipment and solutions, including rod pumping systems, electric submersible pump systems, progressive cavity pumps and drive systems and plunger lifts, as well as a full automation and digital offering consisting of equipment and software for Industrial Internet of Things (“IIoT”) solutions for downhole monitoring, wellsite productivity enhancement, and asset integrity management.  Apergy’s Drilling Technologies offering provides market leading polycrystalline diamond cutters and bearings that result in cost effective and efficient drilling. To learn more about Apergy, visit our website at http://www.apergy.com.

Forward-Looking Statements

This news release contains statements relating to future actions and results, which are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements relate to, among other things, Apergy's market position and growth opportunities.  Forward-looking statements include, but are not limited to, statements related to Apergy’s expectations regarding the performance of the business, financial results, liquidity and capital resources of Apergy, the benefits resulting from Apergy’s separation from Dover Corporation, the effects of competition, and the effects of future legislation or regulations and other non-historical statements. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, risks associated with our spin-off into a separate public company; tax and regulatory matters; and changes in economic, competitive, strategic, technological, regulatory or other factors that affect the operation of Apergy's businesses. You are encouraged to refer to the documents that Apergy files from time to time with the Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of Amendment No. 1 to Apergy’s Form 10, filed with the SEC on April 12, 2018, as amended and supplemented, and in Apergy’s other filings with the SEC, for a discussion of these and other risks and uncertainties. Readers are cautioned not to place undue reliance on Apergy’s forward-looking statements. Forward-looking statements speak only as of the day they are made and Apergy undertakes no obligation to update any forward-looking statement, except as required by applicable law.

Investor Contact: David Skipper
david.skipper@apergy.com
713-230-8031

Media Contact: John Breed
john.breed@apergy.com
281-403-5751



 
APERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
    
 Three Months Ended Year Ended
 Dec. 31, Sept. 30, Dec. 31, December 31,
(in thousands, except per share amounts)2018 2018 2017* 2018* 2017*
Revenue$311,202  $316,468  $265,195  $1,216,646  $1,010,466 
Cost of goods and services205,931  202,734  189,661  800,347  689,990 
Gross profit105,271  113,734  75,534  416,299  320,476 
Selling, general and administrative expense68,057  69,022  56,198  262,625  218,558 
Interest expense, net10,625  10,584  554  27,440  753 
Other expense (income), net(778) 910  2,449  2,943  10,377 
Income before income taxes27,367  33,218  16,333  123,291  90,788 
Provision for (benefit from) income taxes4,637  7,723  (44,892) 28,796  (21,876)
Net income22,730  25,495  61,225  94,495  112,664 
Net income attributable to
noncontrolling interest
159  232  70  454  930 
Net income attributable to Apergy$22,571  $25,263  $61,155  $94,041  $111,734 
          
Earnings per share attributable to Apergy:         
Basic$0.29  $0.33  $0.79  $1.22  $1.44 
Diluted$0.29  $0.33  $0.79  $1.21  $1.43 
          
Weighted-average shares outstanding:         
Basic77,347  77,340  77,340  77,342  77,340 
Diluted77,546  77,569  77,890  77,692  77,890 

* Previously reported results in 2017 and 2018 include the impact of certain adjustments primarily related to capital leases and other adjustments which were not material.


 
 
APERGY CORPORATION
BUSINESS SEGMENT DATA
(UNAUDITED)
    
 Three Months Ended Year Ended
 Dec. 31, Sept. 30, Dec. 31, December 31,
(in thousands)2018 2018 2017* 2018* 2017*
Segment revenue:         
Production & Automation Technologies$235,364  $241,214  $204,206  $931,081  $782,813 
Drilling Technologies75,838  75,254  60,989  285,565  227,653 
Total revenue$311,202  $316,468  $265,195  $1,216,646  $1,010,466 
          
Income before income taxes:        
Segment operating profit:         
Production & Automation Technologies$18,646  $24,257  $466  $75,918  $26,890 
Drilling Technologies26,882  26,209  19,250  98,620  74,317 
Total segment operating profit45,528  50,466  19,716  174,538  101,207 
Corporate expense and other (1)7,536  6,664  2,829  23,807  9,666 
Interest expense, net10,625  10,584  554  27,440  753 
Income before income taxes$27,367  $33,218  $16,333  $123,291  $90,788 
          
Bookings:         
Production & Automation Technologies$233,178  $241,729  $196,502  $941,302  $792,798 
Book-to-bill ratio (2)0.99  1.00  0.96  1.01  1.01 
Drilling Technologies$78,005  $75,834  $62,010  $293,473  $232,796 
Book-to-bill ratio (2)1.03  1.01  1.02  1.03  1.02 

_______________________

(1)  Corporate expense and other includes costs not directly attributable to our reporting segments such as corporate executive management and other administrative functions, costs related to our separation from Dover Corporation and the results attributable to our noncontrolling interest.
(2)  The book-to-bill ratio compares the dollar value of orders received (bookings) relative to revenue realized during the period.

* Previously reported results in 2017 and 2018 include the impact of certain adjustments primarily related to capital leases and other adjustments which were not material.


 
 
APERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
    
(in thousands)December 31, 2018 December 31, 2017*
Assets   
Cash and cash equivalents$41,832  $23,712 
Receivables, net249,948  201,449 
Inventories, net218,319  201,402 
Prepaid expenses and other current assets20,211  14,912 
Total current assets530,310  441,475 
    
Property, plant and equipment, net244,328  213,562 
Goodwill904,985  910,088 
Intangible assets, net283,688  338,510 
Other non-current assets8,445  2,980 
Total assets1,971,756  1,906,615 
    
Liabilities   
Accounts payable131,058  98,826 
Other current liabilities70,937  51,664 
Total current liabilities201,995  150,490 
    
Long-term debt666,108  5,806 
Other long-term liabilities122,126  109,934 
Equity   
Apergy Corporation stockholders’ equity979,069   
Net parent equity in Apergy  1,635,636 
Noncontrolling interest2,458  4,749 
Total liabilities and equity$1,971,756  $1,906,615 

* Previously reported results in 2017 include the impact of certain adjustments primarily related to capital leases and other adjustments which were not material.


 
 
APERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
  
 Year Ended
December 31,
(in thousands)2018* 2017*
Cash provided (required) by operating activities:   
Net income$94,495  $112,664 
Depreciation72,569  59,161 
Amortization51,892  53,701 
Receivables(53,890) (61,573)
Inventories(38,708) (14,015)
Accounts payable35,185  29,802 
Other (1)2,357  (103,690)
Net cash provided by operating activities163,900  76,050 
    
Cash provided (required) by investing activities:   
Capital expenditures(57,918) (36,654)
Other3,713  (5,295)
Net cash required by investing activities(54,205) (41,949)
    
Cash provided (required) by financing activities:   
Issuances of debt, net of debt issuance costs697,957   
Repayment of long-term debt(45,000) (599)
Distributions to Dover Corporation, net(736,557) (31,192)
Other(7,238) (4,902)
Net cash required by financing activities(90,838) (36,693)
    
Effect of exchange rate changes on cash and cash equivalents(737) 277 
    
Net increase (decrease) in cash and cash equivalents18,120  (2,315)
Cash and cash equivalents at beginning of period23,712  26,027 
Cash and cash equivalents at end of period$41,832  $23,712 

_______________________

(1)  Includes $(73.3) million of deferred income taxes for the year ended December 31, 2017, primarily related to U.S. tax reform.

* Previously reported results in 2017 and 2018 include the impact of certain adjustments primarily related to capital leases and other adjustments which were not material.


APERGY CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
    
 Three Months Ended Year Ended
 Dec. 31, Sept. 30, Dec. 31, December 31,
(in thousands)2018 2018 2017* 2018* 2017*
Net income attributable to Apergy$22,571  $25,263  $61,155  $94,041  $111,734 
Pre-tax adjustments:         
Separation and supplemental benefit costs (1)5,109  4,403    14,649   
Royalty expense (2)    2,359  2,277  9,765 
Restructuring and other related charges1,874  (39) 6,900  4,347  6,921 
Tax impact of adjustments (3)(1,658) (1,036) (2,796) (3,308) (5,067)
Tax impact of U.S. tax reform    (49,307)   (49,307)
Adjusted net income attributable to Apergy27,896  28,591  18,311  112,006  74,046 
Tax impact of adjustments and U.S. tax reform (3)1,658  1,036  52,103  3,308  54,374 
Net income attributable to
noncontrolling interest
159  232  70  454  930 
Depreciation and amortization32,784  30,218  30,439  124,461  112,862 
Provision for (benefit from) income taxes4,637  7,723  (44,892) 28,796  (21,876)
Interest expense, net10,625  10,584  554  27,440  753 
Adjusted EBITDA$77,759  $78,384  $56,585  $296,465  $221,089 
          
Diluted earnings per share attributable to Apergy:         
Reported$0.29  $0.33  $0.79  $1.21  $1.43 
Adjusted$0.36  $0.37  $0.24  $1.44  $0.95 

_______________________

(1)  Separation and supplemental benefit costs primarily relate to separation costs, which will substantially decrease in 2019, and to a lesser extent, supplemental benefits costs related to enhanced or supplemental benefits provided to employees no longer participating in Dover Corporation benefit and compensation plans. Supplemental benefit costs are expected to be incurred through the end of 2020.
(2)  Patents and other intangible assets related to our business were conveyed by Dover Corporation to Apergy on April 1, 2018. No royalty charges were incurred after March 31, 2018.
(3)  We generally tax effect adjustments using a combined federal and state statutory income tax rate of approximately 24 percent in 2018, and approximately 30 percent for periods prior to 2018. Includes tax expense of $1.7 million during the year ended December 31, 2018, associated with capital gains related to certain reorganizations of our subsidiaries as part of the Separation from Dover Corporation.

* Previously reported results in 2017 and 2018 include the impact of certain adjustments primarily related to capital leases and other adjustments which were not material.

  
  
 Three months ended
 December 31, 2018
(in thousands, except percentages)Production &
Automation
Technologies
 Drilling Technologies Corporate expense and other Total
Revenue$235,364  $75,838  $  $311,202 
        
Operating profit (loss) / income before income taxes, as reported$18,646  $26,882  $(18,161) $27,367 
Depreciation and amortization29,949  2,658  177  32,784 
Separation and supplemental benefit costs (1)    5,109  5,109 
Restructuring and other related charges1,874      1,874 
Interest expense, net    10,625  10,625 
Adjusted EBITDA$50,469  $29,540  $(2,250) $77,759 
        
Operating profit margin, as reported7.9% 35.4%   8.8%
Adjusted EBITDA margin21.4% 39.0%   25.0%

_______________________

(1)  Separation and supplemental benefit costs primarily relate to separation costs, which will substantially decrease in 2019, and to a lesser extent, supplemental benefits costs related to enhanced or supplemental benefits provided to employees no longer participating in Dover Corporation benefit and compensation plans. Supplemental benefit costs are expected to be incurred through the end of 2020.
 

  
  
 Three months ended
 September 30, 2018
(in thousands, except percentages)Production &
Automation
Technologies
 Drilling Technologies Corporate expense and other Total
Revenue$241,214  $75,254  $  $316,468 
        
Operating profit (loss) / income before income taxes, as reported$24,257  $26,209  $(17,248) $33,218 
Depreciation and amortization27,305  2,717  196  30,218 
Separation and supplemental benefit costs (1)    4,403  4,403 
Restructuring and other related charges(39)     (39)
Interest expense, net    10,584  10,584 
Adjusted EBITDA$51,523  $28,926  $(2,065) $78,384 
        
Operating profit margin, as reported10.1% 34.8%   10.5%
Adjusted EBITDA margin21.4% 38.4%   24.8%

_______________________

(1)  Separation and supplemental benefit costs primarily relate to separation costs, which will substantially decrease in 2019, and to a lesser extent, supplemental benefits costs related to enhanced or supplemental benefits provided to employees no longer participating in Dover Corporation benefit and compensation plans. Supplemental benefit costs are expected to be incurred through the end of 2020.

  
  
 Three months ended
 December 31, 2017*
(in thousands, except percentages)Production &
Automation
Technologies
 Drilling Technologies Corporate expense and other Total
Revenue$204,206  $60,989  $  $265,195 
        
Operating profit (loss) / income before income taxes, as reported$466  $19,250  $(3,383) $16,333 
Depreciation and amortization27,437  3,002    30,439 
Royalty expense (1)2,359      2,359 
Restructuring and other related charges6,900      6,900 
Interest expense, net    554  554 
Adjusted EBITDA$37,162  $22,252  $(2,829) $56,585 
        
Operating profit margin, as reported0.2% 31.6%   6.2%
Adjusted EBITDA margin18.2% 36.5%   21.3%

_______________________

(1)  Royalty expense represents charges for the right to use of Dover Corporation patents and other intangible assets.

* Previously reported results include the impact of certain adjustments primarily related to capital leases and other adjustments which were not material.

  
  
 Year Ended
 December 31, 2018*
(in thousands, except percentages)Production &
Automation
Technologies
 Drilling Technologies Corporate expense and other Total
Revenue$931,081  $285,565  $  $1,216,646 
        
Operating profit (loss) / income before income taxes, as reported$75,918  $98,620  $(51,247) $123,291 
Depreciation and amortization112,955  11,037  469  124,461 
Separation and supplemental benefit costs (1)    14,649  14,649 
Royalty expense (2)2,277      2,277 
Restructuring and other related charges4,347      4,347 
Interest expense, net    27,440  27,440 
Adjusted EBITDA$195,497  $109,657  $(8,689) $296,465 
        
Operating profit margin, as reported8.2% 34.5%   10.1%
Adjusted EBITDA margin21.0% 38.4%   24.4%

_______________________

(1)  Separation and supplemental benefit costs primarily relate to separation costs, which will substantially decrease in 2019, and to a lesser extent, supplemental benefits costs related to enhanced or supplemental benefits provided to employees no longer participating in Dover Corporation benefit and compensation plans. Supplemental benefit costs are expected to be incurred through the end of 2020.
(2)  Royalty expense represents charges for the right to use of Dover Corporation patents and other intangible assets.

  
  
 Year Ended
 December 31, 2017*
(in thousands, except percentages)Production &
Automation
Technologies
 Drilling Technologies Corporate expense and other Total
Revenue$782,813  $227,653  $  $1,010,466 
        
Operating profit (loss) / income before income taxes, as reported$26,890  $74,317  $(10,419) $90,788 
Depreciation and amortization100,912  11,950    112,862 
Royalty expense (1)9,765      9,765 
Restructuring and other related charges6,921      6,921 
Interest expense, net    753  753 
Adjusted EBITDA$144,488  $86,267  $(9,666) $221,089 
        
Operating profit margin, as reported3.4% 32.6%   9.0%
Adjusted EBITDA margin18.5% 37.9%   21.9%

_______________________

(1)  Royalty expense represents charges for the right to use of Dover Corporation patents and other intangible assets.
 
 

* Previously reported results include the impact of certain adjustments primarily related to capital leases and other adjustments which were not material.