Orders Increased Sequentially; Net Earnings Were $56 Million;
Operating Cash Flow Reached $87 Million SARASOTA, Fla., Oct. 26
/PRNewswire-FirstCall/ -- Roper Industries, Inc. (NYSE:ROP)
reported financial results for the third quarter ended September
30, 2009. Net earnings for the third quarter were $56 million, or
$0.61 per diluted share. Excluding restructuring expenses, adjusted
net earnings were $58 million, or $0.63 per diluted share. Sales
during the quarter were $486 million, an 18% decrease compared to
the same period in 2008. Orders were $499 million, and represented
103% of sales, marking the first time since the second quarter of
2008 that orders exceeded sales. Operating cash flow was $87
million, or 18% of revenue, bringing year-to-date operating cash
flow to $248 million. Free cash flow (operating cash flow less
capital expenditures) during the quarter was $81 million,
representing 143% of net income in the quarter. Year-to-date free
cash flow is $229 million, or 137% of year-to-date net income.
"More than half our businesses experienced greater than 10% growth
in orders over the second quarter, and this improvement in order
momentum is expected to continue in the fourth quarter," said Brian
Jellison, Roper's Chairman, President and CEO. "Although sales in
the quarter were 4% lower than second quarter levels, in part due
to some orders shifting to the fourth quarter, we were pleased with
the performance of our businesses in terms of margins, cost
controls and cash flow. In addition, we increased cash and
liquidity during the quarter with a successful $500 million 10-year
bond offering that increases our flexibility as we pursue strategic
acquisition opportunities." Operating margin was 18.9% in the
quarter, or 19.5% excluding restructuring costs. Decremental margin
(change in operating profit divided by change in sales), excluding
the RF segment was 34% in the quarter, including the cost of
restructuring, and 31% excluding restructuring costs. "Our
decremental margin performance again demonstrated the success of
our operating model, with its focus on breakeven analysis and quick
payback restructuring actions," Mr. Jellison concluded. Outlook and
Guidance Roper expects full year operating cash flow to be in
excess of $350 million. Adjusting for the additional interest costs
related to the recent bond offering, the Company now expects
full-year earnings per diluted share between $2.57 and $2.63, which
excludes the impact of restructuring costs and future acquisitions.
Table 1: Sequential Income Statement (Millions) Q3 2009 Q2 2009 Net
Orders $499 $489 Net Sales 486 505 Cost of Sales 240 250 Gross
Profit $246 $255 Selling, General & Administrative Expenses 154
159 Operating Profit $92 $96 Table 2: Operating Margin (Millions)
Q3 2009 (1) Operating Profit $91.9 Restructuring Costs, All
Segments 2.7 (2) Adjusted Operating Profit $94.6 (3) Revenue $486
Operating Margin (1)/(3) 18.9% Adjusted Operating Margin (2)/(3)
19.5% Table 3: Sales Growth Q3 2009 Organic Growth (19%)
Acquisitions / Divestitures 2% Foreign Currency (FX) (1%) Total
Sales Growth (18%) Conference Call to be Held at 8:30 AM (ET)
October 26, 2009 A conference call to discuss these results has
been scheduled for 8:30 AM ET on Monday, October 26, 2009. The call
can be accessed via webcast or by dialing +1 800-967-7141
(US/Canada) or +1 719-457-2638, using confirmation code 6889450.
Webcast information and conference call materials will be made
available in the Investors section of Roper's website
(http://www.roperind.com/) prior to the start of the call.
Telephonic replays will be available for up to two weeks by calling
+1 888-203-1112 (US/Canada) or +1 719-457-0820 and using the access
code 6889450. About Roper Industries Roper Industries is a
diversified growth company and is a component of the Fortune 1000,
S&P MidCap 400 and the Russell 1000 Indexes. Roper provides
engineered products and solutions for global niche markets,
including water, energy, radio frequency and research/medical
applications. Additional information about Roper Industries is
available on the Company's website at http://www.roperind.com/. The
information provided in this press release contains forward looking
statements within the meaning of the federal securities laws. These
forward looking statements include, among others, statements
regarding operating results, the success of our internal operating
plans, and the prospects for newly acquired businesses to be
integrated and contribute to future growth and profit expectations.
Forward looking statements may be indicated by words or phrases
such as "anticipate," "estimate," "plans," "expects," "projects,"
"should," "will," "believes" or "intends" and similar words and
phrases. These statements reflect management's current beliefs and
are not guarantees of future performance. They involve risks and
uncertainties that could cause actual results to differ materially
from those contained in any forward looking statement. Such risks
and uncertainties include our ability to integrate our acquisitions
and realize expected synergies. We also face other general risks,
including our ability to realize cost savings from our operating
initiatives, general economic conditions, unfavorable changes in
foreign exchange rates, difficulties associated with exports, risks
associated with our international operations, difficulties in
making and integrating acquisitions, risks associated with newly
acquired businesses, increased product liability and insurance
costs, increased warranty exposure, future competition, changes in
the supply of, or price for, parts and components, environmental
compliance costs and liabilities, risks and cost associated with
asbestos related litigation and potential write-offs of our
substantial intangible assets, and risks associated with obtaining
governmental approvals and maintaining regulatory compliance for
new and existing products. Important risks may be discussed in
current and subsequent filings with the SEC. You should not place
undue reliance on any forward looking statements. These statements
speak only as of the date they are made, and we undertake no
obligation to update publicly any of them in light of new
information or future events. Roper Industries, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets (unaudited)
(Amounts in thousands) September 30, December 31, ASSETS 2009 2008
CURRENT ASSETS: Cash and cash equivalents $256,024 $178,069
Accounts receivable 323,959 376,855 Inventories 174,055 185,919
Deferred taxes 27,540 29,390 Unbilled receivable 60,344 61,168
Other current assets 65,572 26,906 Total current assets 907,494
858,307 PROPERTY, PLANT AND EQUIPMENT, NET 104,748 112,463 OTHER
ASSETS: Goodwill 2,142,765 2,118,852 Other intangible assets, net
759,241 804,020 Deferred taxes 31,190 28,050 Other assets 56,383
49,846 Total other assets 2,989,579 3,000,768 TOTAL ASSETS
$4,001,821 $3,971,538 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable $100,561 $121,807 Accrued liabilities
224,483 261,682 Income taxes payable - 1,892 Deferred taxes 1,079 -
Current portion of long-term debt 119,852 233,526 Total current
liabilities 445,975 618,907 NONCURRENT LIABILITIES: Long-term debt
1,004,357 1,033,689 Deferred taxes 286,352 272,182 Other
liabilities 42,662 42,826 Total liabilities 1,779,346 1,967,604
STOCKHOLDERS' EQUITY: Common stock 931 919 Additional paid-in
capital 846,966 815,736 Retained earnings 1,332,555 1,187,467
Accumulated other comprehensive earnings 63,425 21,513 Treasury
stock (21,402) (21,701) Total stockholders' equity 2,222,475
2,003,934 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,001,821
$3,971,538 Roper Industries, Inc. and Subsidiaries Condensed
Consolidated Statements of Earnings (unaudited) (Amounts in
thousands, except per share data) Three months ended Nine months
ended September 30, September 30, 2009 2008 2009 2008 Net sales
$485,676 $593,100 $1,496,030 $1,730,509 Cost of sales 240,156
284,340 744,304 840,029 Gross profit 245,520 308,760 751,726
890,480 Selling, general and administrative expenses 153,648
176,461 477,098 523,374 Income from operations 91,872 132,299
274,628 367,106 Interest expense 14,437 16,122 41,708 42,141 Other
income (expense) 105 (2,836) 2,917 (1,695) Earnings from continuing
operations before income taxes 77,540 113,341 235,837 323,270
Income taxes 21,130 39,312 68,280 112,267 Net Earnings $56,410
$74,029 $167,557 $211,003 Earnings per share: Basic $0.62 $0.83
$1.85 $2.36 Diluted $0.61 $0.79 $1.81 $2.24 Weighted average common
and common equivalent shares outstanding: Basic 90,877 89,629
90,526 89,381 Diluted 92,908 94,251 92,635 94,026 Roper Industries,
Inc. and Subsidiaries Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales) Three months ended
September 30, 2009 2008 Amount % Amount % Net sales: Industrial
Technology $130,538 $169,065 Energy Systems & Controls 102,988
137,535 Scientific & Industrial Imaging 78,934 94,610 RF
Technology 173,216 191,890 Total $485,676 $593,100 Gross profit:
Industrial Technology $62,060 47.5% $82,215 48.6% Energy Systems
& Controls 52,464 50.9% 75,172 54.7% Scientific &
Industrial Imaging 44,169 56.0% 51,457 54.4% RF Technology 86,827
50.1% 99,916 52.1% Total $245,520 50.6% $308,760 52.1% Operating
profit*: Industrial Technology $30,547 23.4% $43,767 25.9% Energy
Systems & Controls 19,214 18.7% 32,541 23.7% Scientific &
Industrial Imaging 14,818 18.8% 18,746 19.8% RF Technology 38,918
22.5% 50,191 26.2% Total $103,497 21.3% $145,245 24.5% Operating
profit excluding restructuring*: Industrial Technology $31,494
24.1% $43,767 25.9% Energy Systems & Controls 20,503 19.9%
32,541 23.7% Scientific & Industrial Imaging 15,195 19.3%
18,746 19.8% RF Technology 38,976 22.5% 50,191 26.2% Total $106,168
21.9% $145,245 24.5% Net Orders: Industrial Technology $125,776
$163,442 Energy Systems & Controls 104,593 134,970 Scientific
& Industrial Imaging 84,329 102,933 RF Technology 184,243
179,274 Total $498,941 $580,619 Nine months ended September 30,
2009 2008 Amount % Amount % Net sales: Industrial Technology
$397,730 $525,929 Energy Systems & Controls 314,997 410,638
Scientific & Industrial Imaging 238,914 282,206 RF Technology
544,389 511,736 Total $1,496,030 $1,730,509 Gross profit:
Industrial Technology $190,501 47.9% $253,719 48.2% Energy Systems
& Controls 164,123 52.1% 223,720 54.5% Scientific &
Industrial Imaging 132,385 55.4% 154,135 54.6% RF Technology
264,717 48.6% 258,906 50.6% Total $751,726 50.2% $890,480 51.5%
Operating profit*: Industrial Technology $91,614 23.0% $136,627
26.0% Energy Systems & Controls 59,926 19.0% 96,359 23.5%
Scientific & Industrial Imaging 43,300 18.1% 54,091 19.2% RF
Technology 115,724 21.3% 119,902 23.4% Total $310,564 20.8%
$406,979 23.5% Operating profit excluding restructuring*:
Industrial Technology $95,931 24.1% $136,627 26.0% Energy Systems
& Controls 63,739 20.2% 96,359 23.5% Scientific &
Industrial Imaging 44,797 18.8% 54,091 19.2% RF Technology 116,542
21.4% 119,902 23.4% Total $321,009 21.5% $406,979 23.5% Net Orders:
Industrial Technology $391,049 $514,326 Energy Systems &
Controls 298,551 402,553 Scientific & Industrial Imaging
235,433 289,606 RF Technology 534,251 538,624 Total $1,459,284
$1,745,109 * Operating profit is before unallocated corporate
general and administrative expenses. These expenses were $11,625
and $12,946 for the three months ended September 30, 2009 and 2008,
respectively, and $35,936 and $39,873 for the nine months ended
September 30, 2009 and 2008, respectively. Roper Industries, Inc.
and Subsidiaries Condensed Consolidated Statements of Cash Flows
(unaudited) (Amounts in thousands) Nine months ended September 30,
2009 2008 Net earnings $167,557 $211,003 Non-cash items:
Depreciation 25,828 24,775 Amortization 51,280 50,588 Stock-based
compensation expense 20,821 22,848 Income taxes (24,146) 2,602
Changes in assets and liabilities: Receivables 54,127 (5,517)
Inventory 14,496 (12,157) Accounts payable (22,354) 5,358 Accrued
liabilities (42,375) 2,234 Other, net 2,615 3,805 Cash provided by
operating activities 247,849 305,539 Business acquisitions, net of
cash acquired (1,248) (701,935) Capital expenditures (18,708)
(20,787) Other, net 6,983 (4,084) Cash used by investing activities
(12,973) (726,806) Principal debt borrowings 500,000 850,000
Principal debt payments (466,186) (957,745) Revolver borrowings
(payments), net (179,000) 393,000 Debt issuance costs (4,310)
(10,169) Dividends (22,343) (19,393) Excess tax benefit from
share-based payment 1,055 4,688 Proceeds from exercise of stock
options 4,845 10,050 Other, net (604) 918 Cash provided by (used
by) financing activities (166,543) 271,349 Effect of exchange rate
changes on cash 9,622 (2,578) Net increase (decrease) in cash and
equivalents 77,955 (152,496) Cash and equivalents, beginning of
period 178,069 308,768 Cash and equivalents, end of period $256,024
$156,272 DATASOURCE: Roper Industries, Inc. CONTACT: Investor
Relations, Roper Industries, Inc., +1-941-556-2601, Web Site:
http://www.roperind.com/
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