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

October 25, 2007


DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

ROPER INDUSTRIES, INC.


(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE


(STATE OR OTHER JURISDICTION OF INCORPORATION)
     
1-12273   51-0263969

(COMMISSION FILE NUMBER)   (IRS EMPLOYER IDENTIFICATION NO.)
     
6901 PROFESSIONAL PKWY. EAST, SUITE 200, SARASOTA, FLORIDA   34240

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)   (ZIP CODE)

(941) 556-2601


(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

 


(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)

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 October 25, 2007, Roper Industries, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations for the second quarter ended September 30, 2007. 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 October 25, 2007.


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/ John Humphrey  
     

      John Humphrey,
Vice President and Chief Financial Officer
  Date: October 25, 2007


 

EXHIBIT INDEX

     
Exhibit No.   Description

 
 
99.1   Press Release of the Company dated October 25, 2007

Exhibit 99.1

Roper Industries, Inc.

Contact Information:
Investor Relations

+1 (941) 556-2601
investor-relations@roperind.com

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, Florida, October 25, 2007 … 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 2006

Q1 2007

Q2 2007

Q3 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,

 

Nine months ended September 30,

 

2007

 

2006

 

2007

 

2006

 

Amount

 

%

 

Amount

 

%

 

Amount

 

%

 

Amount

 

%

Net sales:

                             

Industrial Technology

$ 161,828

 

 

$ 140,624

 

 

$ 477,667

 

 

$ 402,204

 

Energy Systems & Controls

131,033

 

 

88,485

 

 

361,044

 

 

233,109

 

Scientific & Industrial Imaging

91,331

 

 

83,501

 

 

277,042

 

 

249,923

 

RF Technology

148,710

 

 

114,607

 

 

426,212

 

 

350,014

 

Total

$ 532,902

 

 

$ 427,217

 

 

$1,541,965

 

 

$ 1,235,250

 

                               

Gross profit:

                             

Industrial Technology

$ 78,394

 

48.4%

 

$ 65,863

 

46.8%

 

$ 228,407

 

47.8%

 

$ 192,389

 

47.8%

Energy Systems & Controls

70,907

 

54.1%

 

48,809

 

55.2%

 

191,159

 

52.9%

 

126,473

 

54.3%

Scientific & Industrial Imaging

50,242

 

55.0%

 

49,017

 

58.7%

 

152,629

 

55.1%

 

141,725

 

56.7%

RF Technology

72,236

 

48.6%

 

54,561

 

47.6%

 

200,127

 

47.0%

 

164,943

 

47.1%

Total

$ 271,779

 

51.0%

 

$ 218,250

 

51.1%

 

$ 772,322

 

50.1%

 

$ 625,530

 

50.6%

                               

Operating profit*:

                             

Industrial Technology

$ 42,065

 

26.0%

 

$ 32,747

 

23.3%

 

$ 120,721

 

25.3%

 

$ 92,489

 

23.0%

Energy Systems & Controls

31,858

 

24.3%

 

25,108

 

28.4%

 

81,579

 

22.6%

 

59,077

 

25.3%

Scientific & Industrial Imaging

16,385

 

17.9%

 

18,832

 

22.6%

 

53,453

 

19.3%

 

52,703

 

21.1%

RF Technology

34,997

 

23.5%

 

19,344

 

16.9%

 

90,669

 

21.3%

 

62,368

 

17.8%

Total

$ 125,305

 

23.5%

 

$ 96,031

 

22.5%

 

$ 346,422

 

22.5%

 

$ 266,637

 

21.6%

                               

Net Orders:

                             

Industrial Technology

$ 153,236

 

 

$ 149,801

 

 

$ 479,100

 

 

$ 436,595

 

Energy Systems & Controls

145,855

 

 

89,003

 

 

376,611

 

 

231,350

 

Scientific & Industrial Imaging

95,729

 

 

85,758

 

 

278,212

 

 

245,140

 

RF Technology

138,219

 

 

111,113

 

 

424,827

 

 

348,614

 

Total

$ 533,039

 

 

$ 435,675

 

 

$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