UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
July 27, 2006
ROPER INDUSTRIES, INC.
DELAWARE
| 1-12273 | 51-0263969 | |
| (COMMISSION FILE NUMBER) | (IRS EMPLOYER IDENTIFICATION NO.) | |
| 2160 SATELLITE BLVD., SUITE 200, DULUTH, GEORGIA | 30097 | |
| (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) | (ZIP CODE) | |
(770) 495-5100
NOT APPLICABLE
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written
communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On July 27, 2006, Roper Industries, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations for the quarter ended June 30, 2006. A copy of the press release is furnished as Exhibit 99.1.
In the press release, the Company uses a non-GAAP financial measure EBITDA. EBITDA is defined as net earnings plus (a) interest expense, (b) income taxes and (c) depreciation and amortization. The Company believes EBITDA is an important indicator of operational strength and performance of the Company’s business because it provides a link between profitability and operating cash flow. EBITDA as calculated by the Company is not necessarily comparable to similarly titled measures reported by other companies. In addition, EBITDA: (a) does not represent net income or cash flows from operations as defined by GAAP; (b) is not necessarily indicative of cash available to fund the Company’s cash flow needs; and (c) should not be considered as an alternative to net earnings, operating income, cash flows from operating activities or the Company’s other financial information determined under GAAP. The Company believes that the line on the Company’s consolidated statement of operations entitled net earnings is the most directly comparable GAAP measure to EBITDA.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
| Not applicable. |
(b) Pro Forma Financial Information.
| Not applicable. |
(c) Exhibits.
| 99.1 Press Release of the Company dated July 27, 2006. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Roper Industries, Inc. | |||||||
| (Registrant) | |||||||
| BY: /s/ Brian D. Jellison | |||||||
| Brian D. Jellison, Chairman of the Board, President and Chief Executive Officer |
Date: July 27, 2006 | ||||||
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Press Release of the Company dated July 27, 2006 |
Exhibit 99.1
Roper Industries, Inc.
Contact Information:
Investor Relations
+1 (770) 495-5100
investor-relations@roperind.com
FOR IMMEDIATE RELEASE
Roper Industries Announces Record Second Quarter Results
Sales Performance Led by Internal Growth; Four Acquisitions Complement Existing Platforms
Duluth, Georgia, July 27, 2006
… Roper Industries, Inc. (NYSE: ROP) reported record results for its second
quarter ended June 30, 2006. Diluted earnings per share (DEPS) were $0.53, an increase of
29% over the comparable period in the prior year. Current year results include the effects
from implementation of SFAS 123R and related equity compensation costs, as well as
dilution from the Company’s senior subordinated convertible notes. Net sales were up
18% to $425 million, which included 12% internal growth. Operating income increased 37% to
$85 million and net earnings grew 35% to $48 million. Net orders increased 19% over prior
year levels to $433 million, which included 13% internal growth.
“We are pleased to
report strong internal sales and order growth during the quarter,” said Brian
Jellison, Roper’s Chairman, President and CEO. “Our operating margins improved
to 20.1% from 17.3% in the second quarter 2005. This combination of internal growth and
operational execution allowed us to grow EBITDA by 33% to $106 million.“
In the second
quarter, Roper completed the acquisitions of Sinmed BV, which provides patient positioning
systems for medical diagnostic and therapeutic applications, and Intellitrans LLC, a
provider of services and software for track and trace logistics. Earlier this week, the
Company also completed the acquisition of Lumenera, which engineers and produces high
performance digital cameras. The Company expects to close a fourth transaction within the
next two weeks. Total consideration for the four transactions approximates $94 million.
The Company expects these acquisitions to produce 2007 net sales in excess of $70 million
with 20% EBITDA margins. We expect these acquisitions to be accretive in 2007.
Mr. Jellison
commented, “The acquisition of Sinmed, based in the Netherlands, increases the reach
of our medical platform into Europe. The combination of Intellitrans’ unique software
and services with TransCore’s RF and Satcom technology offers unparalleled
track-and-trace functionality for rail customers. Lumenera, based in Canada, extends our
imaging leadership into security markets and OEMs serving a variety of new applications.
We welcome the employees of these businesses to the Roper family.“
The Company also
reported second quarter EBITDA of $106 million, or 24.9% of sales, 290 basis points higher
than the second quarter of the previous year. Net working capital was reduced by 270 basis
points to 14.6% of second quarter annualized 2006 sales. Net debt (debt minus cash) was
reduced to 37.4% of total net capitalization and represents 2.1 times twelve month
trailing EBITDA.
As a result of its strong second quarter performance, Roper is increasing
its full year DEPS guidance from $1.98-$2.08 to $2.05-$2.11, and establishing third
quarter DEPS guidance of $0.52-$0.54. The Company is increasing its full year EBITDA
guidance from $390+ million to $405+ million. The Company’s guidance does not include
benefits from future acquisitions or the dilutive effects resulting from the
Company’s convertible notes.
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, July 28, 2006. The call can be accessed via webcast or by dialing (800) 811-0667 or +1 (913) 981-4901, using access code 8942814. 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 8942814.
Table 1: EBITDA (Millions)
| Q2 2005 |
Q2 2006 |
2006 Full Year Estimates |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Earnings | $ | 36 | $ | 48 | $ | 185 | |||||
| Add: Interest Expense | 11 | 11 | 44 | ||||||||
| Add: Income Taxes | 16 | 26 | 94 | ||||||||
| Add: Depreciation and Amortization | 17 | 20 | 82 | ||||||||
| Rounding | 0 | 1 | 0 | ||||||||
| EBITDA | 80 | 106 | 405 | ||||||||
Table 2: Net Debt-to-Net Capital Ratio (Millions)
| Q2 2006 |
|||||
|---|---|---|---|---|---|
| Total Debt | $ | 869 | |||
| Less: Cash | (53 | ) | |||
| Equals: Net Debt | 816 | ||||
| Add: Shareholders' Equity | 1,361 | ||||
| Equals: Net Capital | $ | 2,177 | |||
| Net Debt Divided by Net Capital | 37.4% | ||||
About Roper Industries
Roper Industries is a market-driven, diversified growth company with annual revenues of $1.5 billion, and is a component of the 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)
| June 30, 2006 |
December 31, 2005 |
|||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 53,383 | $ | 53,116 | ||||
| Accounts receivable | 277,041 | 257,210 | ||||||
| Inventories | 147,332 | 131,838 | ||||||
| Deferred taxes | 19,120 | 19,145 | ||||||
| Other current assets | 48,543 | 36,898 | ||||||
| Total current assets | 545,419 | 498,207 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 102,231 | 97,462 | ||||||
| OTHER ASSETS: | ||||||||
| Goodwill | 1,407,958 | 1,353,712 | ||||||
| Other intangible assets, net | 501,839 | 501,365 | ||||||
| Deferred taxes | 22,214 | 25,852 | ||||||
| Other assets | 47,083 | 45,708 | ||||||
| Total other assets | 1,979,094 | 1,926,637 | ||||||
| TOTAL ASSETS | $ | 2,626,744 | $ | 2,522,306 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 84,183 | $ | 71,693 | ||||
| Accrued liabilities | 136,006 | 142,835 | ||||||
| Income taxes payable | 20,880 | 14,718 | ||||||
| Deferred taxes | 3,066 | 3,066 | ||||||
| Current portion of long-term debt | 284,676 | 273,313 | ||||||
| Total current liabilities | 528,811 | 505,625 | ||||||
| NONCURRENT LIABILITIES: | ||||||||
| Long-term debt | 584,436 | 620,958 | ||||||
| Deferred taxes | 128,632 | 124,202 | ||||||
| Other liabilities | 23,412 | 21,733 | ||||||
| Total liabilities | 1,265,291 | 1,272,518 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock | 893 | 883 | ||||||
| Additional paid-in capital | 690,227 | 670,322 | ||||||
| Retained earnings | 625,180 | 549,603 | ||||||
| Accumulated other comprehensive earnings | 67,710 | 51,731 | ||||||
| Treasury stock | (22,557 | ) | (22,751 | ) | ||||
| Total stockholders' equity | 1,361,453 | 1,249,788 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,626,744 | $ | 2,522,306 | ||||
Roper Industries, Inc.
and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in
thousands, except per share data)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 |
2005 |
2006 |
2005 |
|||||||||||
| Net sales | $ | 425,310 | $ | 361,564 | $ | 808,033 | $ | 695,401 | ||||||
| Cost of sales | 210,427 | 181,622 | 400,753 | 352,835 | ||||||||||
| Gross profit | 214,883 | 179,942 | 407,280 | 342,566 | ||||||||||
| Selling, general and administrative expenses | 129,491 | 117,550 | 254,412 | 228,310 | ||||||||||
| Income from operations | 85,392 | 62,392 | 152,868 | 114,256 | ||||||||||
| Interest expense | 11,313 | 10,957 | 22,112 | 21,334 | ||||||||||
| Other income/(expense) | (31 | ) | 231 | (159 | ) | 243 | ||||||||
| Earnings from continuing operations before | ||||||||||||||
| income taxes | 74,048 | 51,666 | 130,597 | 93,165 | ||||||||||
| Income taxes | 25,955 | 16,104 | 44,818 | 29,592 | ||||||||||
| Net Earnings | $ | 48,093 | $ | 35,562 | $ | 85,779 | $ | 63,573 | ||||||
| Earnings per share: | ||||||||||||||
| Basic | $ | 0.55 | $ | 0.42 | $ | 0.99 | $ | 0.75 | ||||||
| Diluted | $ | 0.53 | $ | 0.41 | $ | 0.95 | $ | 0.73 | ||||||
| Weighted average common and common | ||||||||||||||
| equivalent shares outstanding: | ||||||||||||||
| Basic | 86,919 | 85,432 | 86,492 | 85,252 | ||||||||||
| Diluted | 91,043 | 86,928 | 90,350 | 86,694 | ||||||||||
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
| Six months ended June 30, |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2006 |
2005 |
|||||||
| Net earnings | $ | 85,779 | $ | 63,573 | ||||
| Depreciation | 13,927 | 13,684 | ||||||
| Amortization | 25,536 | 21,008 | ||||||
| Other, net | (19,486 | ) | 3,118 | |||||
| Cash provided by operating activities | 105,756 | 101,383 | ||||||
| Business acquisitions, net of cash acquired | (63,454 | ) | (177,375 | ) | ||||
| Capital expenditures | (16,807 | ) | (10,500 | ) | ||||
| Other, net | (870 | ) | (1,600 | ) | ||||
| Cash used by investing activities | (81,131 | ) | (189,475 | ) | ||||
| Debt borrowings (payments), net | (29,322 | ) | 32,893 | |||||
| Windfall tax benefit from exercise of stock options | 2,483 | -- | ||||||
| Dividends | (10,189 | ) | (9,032 | ) | ||||
| Other, net | 10,931 | 8,785 | ||||||
| Cash provided by/(used by) financing activities | (26,097 | ) | 32,646 | |||||
| Effect of exchange rate changes on cash | 1,739 | (5,574 | ) | |||||
| Net increase/(decrease) in cash and equivalents | 267 | (61,020 | ) | |||||
| Cash and equivalents, beginning of period | 53,116 | 129,419 | ||||||
| Cash and equivalents, end of period | $ | 53,383 | $ | 68,399 | ||||
Roper Industries, Inc.
and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and
percents of net sales)
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 |
2005 |
2006 |
2005 |
|||||||||||||||||||||||
| Amount |
% |
Amount |
% |
Amount |
% |
Amount |
% |
|||||||||||||||||||
| Net sales: | ||||||||||||||||||||||||||
| Industrial Technology | $ | 136,783 | $ | 126,943 | $ | 261,580 | $ | 245,387 | ||||||||||||||||||
| Energy Systems & Controls | 75,915 | 77,742 | 144,624 | 149,180 | ||||||||||||||||||||||
| Scientific & Industrial Imaging | 85,644 | 58,356 | 166,422 | 110,040 | ||||||||||||||||||||||
| RF Technology | 126,968 | 98,523 | 235,407 | 190,794 | ||||||||||||||||||||||
| Total | $ | 425,310 | $ | 361,564 | $ | 808,033 | $ | 695,401 | ||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||||||
| Industrial Technology | $ | 65,668 | 48.0 | % | $ | 60,496 | 47.7 | % | $ | 126,526 | 48.4 | % | $ | 116,520 | 47.5 | % | ||||||||||
| Energy Systems & Controls | 41,641 | 54.9 | % | 41,628 | 53.5 | % | 77,664 | 53.7 | % | 78,200 | 52.4 | % | ||||||||||||||
| Scientific & Industrial Imaging | 48,212 | 56.3 | % | 32,600 | 55.9 | % | 92,708 | 55.7 | % | 61,461 | 55.9 | % | ||||||||||||||
| RF Technology | 59,362 | 46.8 | % | 45,218 | 45.9 | % | 110,382 | 46.9 | % | 86,385 | 45.3 | % | ||||||||||||||
| Total | $ | 214,883 | 50.5 | % | $ | 179,942 | 49.8 | % | $ | 407,280 | 50.4 | % | $ | 342,566 | 49.3 | % | ||||||||||
| Operating profit*: | ||||||||||||||||||||||||||
| Industrial Technology | $ | 32,174 | 23.5 | % | $ | 27,082 | 21.3 | % | $ | 59,742 | 22.8 | % | $ | 50,430 | 20.6 | % | ||||||||||
| Energy Systems & Controls | 19,037 | 25.1 | % | 18,788 | 24.2 | % | 33,969 | 23.5 | % | 33,657 | 22.6 | % | ||||||||||||||
| Scientific & Industrial Imaging | 18,027 | 21.0 | % | 10,330 | 17.7 | % | 33,871 | 20.4 | % | 18,991 | 17.3 | % | ||||||||||||||
| RF Technology | 24,596 | 19.4 | % | 12,573 | 12.8 | % | 43,024 | 18.3 | % | 23,746 | 12.4 | % | ||||||||||||||
| Total | $ | 93,834 | 22.1 | % | $ | 68,773 | 19.0 | % | $ | 170,606 | 21.1 | % | $ | 126,824 | 18.2 | % | ||||||||||
| Net Orders: | ||||||||||||||||||||||||||
| Industrial Technology | $ | 151,791 | $ | 121,411 | $ | 286,794 | $ | 246,256 | ||||||||||||||||||
| Energy Systems & Controls | 77,928 | 75,176 | 142,347 | 145,644 | ||||||||||||||||||||||
| Scientific & Industrial Imaging | 79,307 | 65,258 | 159,382 | 117,832 | ||||||||||||||||||||||
| RF Technology | 124,395 | 101,799 | 237,501 | 185,084 | ||||||||||||||||||||||
| Total | $ | 433,421 | $ | 363,644 | $ | 826,024 | $ | 694,816 | ||||||||||||||||||
| * Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $8,442 and $6,381 for the three months ended June 30, 2006 and 2005, respectively, and $17,738 and $12,568 for the six months ended June 30, 2006 and 2006, respectively. |