Roper Industries Announces Record Third Quarter Results
Roper Industries Announces Record Third Quarter Results
Diluted Earnings Per Share of $0.70; Sales Up 25%; Net Earnings up 28% to $65 Million; Operating Cash Flow of $91 Million
SARASOTA, Fla., Oct. 25 /PRNewswire-FirstCall/ -- Roper Industries, Inc. (NYSE:ROP) reported results for the third quarter ended September 30, 2007 that again exceeded performance in any quarter in the Company's history. Diluted earnings per share (DEPS) were $0.70 compared to $0.56 in the third quarter of 2006. Net earnings were up 28% to $65 million compared to the third quarter 2006. The tax rate for the quarter was 35.0% compared to 33.8% in the third quarter 2006. Third quarter net sales were $533 million, an increase of 25% over the comparable period in the prior year. Excluding acquisitions, internal sales increased 16%, including a 2% benefit from foreign exchange. Net orders were $533 million, an increase of $97 million over the third quarter of 2006; excluding acquisitions, internal orders were up 12%.
"We continue to have exceptional internal sales and orders growth, and our recent acquisitions have performed well across the board," said Brian Jellison, Roper's Chairman, President and CEO. "The combination of this growth and our strong operating performance enabled us to increase EBITDA to a record $137 million with EBITDA margins reaching 25.8%. We are pleased to have delivered operating cash flow of $91 million, which represents 17% of net sales, and cash conversion of 140%. Despite challenges in the Imaging Segment, we achieved operating margins of 21.3%, up 80 basis points from 2006. We are pleased that Roper passed two important milestones in the quarter, with trailing twelve months (TTM) EBITDA exceeding $500 million and TTM sales exceeding $2 billion for the first time in our history."
Roper's acquisition pipeline remains full and the Company has taken additional steps to refine its portfolio of businesses. The Company exercised an option to acquire Black Diamond Advanced Technology, a designer and manufacturer of rugged devices. Roper has exited Redlake Motion through a transaction involving the contribution of working capital and product lines to Integrated Design Tools, Inc., an engineering company specializing in automotive markets and motion technology, with a production hub in Shanghai, China designed to serve the Asian market. In exchange, Roper received a minority, non-controlling interest in the combined business. Roper expects to benefit from these actions in 2008.
Roper's strong order growth was led by the RF and Energy Segments. Strong growth in the Industrial Segment was partially offset by Neptune's comparison to third quarter 2006, when orders were up 38%; Neptune's backlog is 8% higher at the end of the third quarter of 2007 compared to the end of the third quarter of 2006. Continued strength in sales and orders in Roper's businesses reflect the importance of the Company's participation in many secular growth markets.
As a result of its strong third quarter performance and outlook for the remainder of the year, Roper is increasing its full year DEPS guidance from $2.60 - $2.66 to $2.63 - $2.67 and establishing fourth quarter DEPS guidance of $0.72 - $0.76. Roper now expects full year EBITDA in excess of $525 million and operating cash flow of $320 million or more. The Company's guidance does not include benefits from future acquisitions, but does include the dilutive effect of the Company's senior subordinated convertible notes based on the stock price on September 30, 2007.
Conference Call to be Held at 10:00 AM (ET) Tomorrow
A conference call to discuss these results has been scheduled for 10:00 AM ET on Friday, October 26, 2007. The call can be accessed via webcast or by dialing +1 (888) 801-6506 or +1 (913) 312-0839, using access code 1997489. Webcast information and conference call materials will be made available in the "Investor" section of Roper's website (www.roperind.com) prior to the start of the call. Telephonic replays will be available for up to two weeks by calling +1 (719) 457-0820 and using the access code 1997489.
Table 1: EBITDA (Millions) Q4 Q1 Q2 Q3 2006 2007 2007 2007 2007E Net Earnings $57 $51 $61 $65 $245+ Add: Interest Expense 12 13 13 13 54+ Add: Income Taxes 29 28 32 35 131+ Add: Depreciation and Amortization 22 23 24 24 95+ Rounding (1) - - - - EBITDA 119 115 130 137 525+ Table 2: Cash Conversion Q3 2007 Operating Cash Flow $91 Divided by: Net Earnings 65 Cash Conversion 140% About Roper Industries
Roper Industries is a market-driven, diversified growth company with trailing twelve month revenues of $2.0 billion, 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 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, 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 2007 2006 CURRENT ASSETS: Cash and cash equivalents $125,931 $69,478 Accounts receivable 364,751 324,514 Inventories 183,021 168,319 Deferred taxes 19,086 17,908 Other current assets 71,321 47,276 Total current assets 764,110 627,495 PROPERTY, PLANT AND EQUIPMENT, NET 105,528 107,003 OTHER ASSETS: Goodwill 1,689,904 1,651,208 Other intangible assets, net 626,093 544,136 Deferred taxes 24,795 21,702 Other assets 41,638 43,815 Total other assets 2,382,430 2,260,861 TOTAL ASSETS $3,252,068 $2,995,359 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $106,555 $96,139 Accrued liabilities 182,924 184,148 Income taxes payable 24,957 5,896 Deferred taxes 1,466 1,555 Current portion of long-term debt 322,147 299,911 Total current liabilities 638,049 587,649 NONCURRENT LIABILITIES: Long-term debt 656,198 726,881 Deferred taxes 199,955 169,994 Other liabilities 44,675 23,996 Total liabilities 1,538,877 1,508,520 STOCKHOLDERS' EQUITY: Common stock 909 900 Additional paid-in capital 749,312 717,751 Retained earnings 879,093 721,899 Accumulated other comprehensive earnings 105,988 68,666 Treasury stock (22,111) (22,377) Total stockholders' equity 1,713,191 1,486,839 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,252,068 $2,995,359 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, 2007 2006 2007 2006 Net sales $532,902 $427,217 $1,541,965 $1,235,250 Cost of sales 261,123 208,967 769,643 609,720 Gross profit 271,779 218,250 772,322 625,530 Selling, general and administrative expenses 158,041 130,730 457,777 385,142 Income from operations 113,738 87,520 314,545 240,388 Interest expense 13,119 11,066 39,957 33,178 Other income/(expense) (404) 267 (1,884) 108 Earnings from continuing operations before income taxes 100,215 76,721 272,704 207,318 Income taxes 35,075 25,907 94,901 70,725 Net Earnings $65,140 $50,814 $177,803 $136,593 Earnings per share: Basic $0.74 $0.58 $2.01 $1.58 Diluted $0.70 $0.56 $1.91 $1.51 Weighted average common and common equivalent shares outstanding: Basic 88,575 87,050 88,286 86,679 Diluted 93,559 90,963 92,934 90,640 Roper Industries, Inc. and Subsidiaries Selected Segment Financial Data (unaudited) (Amounts in thousands and percents of net sales) Three months ended September 30, 2007 2006 Amount % Amount % Net sales: Industrial Technology $161,828 $140,624 Energy Systems & Controls 131,033 88,485 Scientific & Industrial Imaging 91,331 83,501 RF Technology 148,710 114,607 Total $532,902 $427,217 Gross profit: Industrial Technology $78,394 48.4% $65,863 46.8% Energy Systems & Controls 70,907 54.1% 48,809 55.2% Scientific & Industrial Imaging 50,242 55.0% 49,017 58.7% RF Technology 72,236 48.6% 54,561 47.6% Total $271,779 51.0% $218,250 51.1% Operating profit*: Industrial Technology $42,065 26.0% $32,747 23.3% Energy Systems & Controls 31,858 24.3% 25,108 28.4% Scientific & Industrial Imaging 16,385 17.9% 18,832 22.6% RF Technology 34,997 23.5% 19,344 16.9% Total $125,305 23.5% $96,031 22.5% Net Orders: Industrial Technology $153,236 $149,801 Energy Systems & Controls 145,855 89,003 Scientific & Industrial Imaging 95,729 85,758 RF Technology 138,219 111,113 Total $533,039 $435,675 * Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $11,567 and $8,511 for the three months ended September 30, 2007 and 2006, respectively, and $31,877 and $26,249 for the nine months ended September 30, 2007 and 2006, respectively. Roper Industries, Inc. and Subsidiaries Selected Segment Financial Data (unaudited) (Amounts in thousands and percents of net sales) Nine months ended September 30, 2007 2006 Amount % Amount % Net sales: Industrial Technology $477,667 $402,204 Energy Systems & Controls 361,044 233,109 Scientific & Industrial Imaging 277,042 249,923 RF Technology 426,212 350,014 Total $1,541,965 $1,235,250 Gross profit: Industrial Technology $228,407 47.8% $192,389 47.8% Energy Systems & Controls 191,159 52.9% 126,473 54.3% Scientific & Industrial Imaging 152,629 55.1% 141,725 56.7% RF Technology 200,127 47.0% 164,943 47.1% Total $772,322 50.1% $625,530 50.6% Operating profit*: Industrial Technology $120,721 25.3% $92,489 23.0% Energy Systems & Controls 81,579 22.6% 59,077 25.3% Scientific & Industrial Imaging 53,453 19.3% 52,703 21.1% RF Technology 90,669 21.3% 62,368 17.8% Total $346,422 22.5% $266,637 21.6% Net Orders: Industrial Technology $479,100 $436,595 Energy Systems & Controls 376,611 231,350 Scientific & Industrial Imaging 278,212 245,140 RF Technology 424,827 348,614 Total $1,558,750 $1,261,699 * Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $11,567 and $8,511 for the three months ended September 30, 2007 and 2006, respectively, and $31,877 and $26,249 for the nine months ended September 30, 2007 and 2006, respectively. Roper Industries, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited) (Amounts in thousands) Nine months ended September 30, 2007 2006 Net earnings $177,803 $136,593 Depreciation 23,560 21,632 Amortization 46,643 38,694 Other, net (21,035) (43,386) Cash provided by operating activities 226,971 153,533 Business acquisitions, net of cash acquired (106,287) (103,394) Capital expenditures (19,591) (23,547) Other, net (3,596) (1,383) Cash used by investing activities (129,474) (128,324) Debt payments, net (50,666) (43,856) Windfall tax benefit from exercise of stock options 6,536 5,051 Dividends (17,182) (15,291) Other, net 14,270 14,448 Cash used by financing activities (47,042) (39,648) Effect of exchange rate changes on cash 5,998 2,201 Net increase/(decrease) in cash and equivalents 56,453 (12,238) Cash and equivalents, beginning of period 69,478 53,116 Cash and equivalents, end of period $125,931 $40,878
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FCMN Contact:
Source: Roper Industries, Inc.
CONTACT: Roper Industries Investor Relations, +1-941-556-2601,
investor-relations@roperind.com
Web site: http://www.roperind.com/
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