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
ROPER INDUSTRIES, INC.
DELAWARE
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
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 Companys 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 Companys 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 Companys cash flow needs; and (c) should not be considered as an alternative to net earnings, operating income, cash flows from operating activities or the Companys other financial information determined under GAAP. The Company believes that the line on the Companys 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: +1 (941) 556-2601 |
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 Companys 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.
Ropers 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.
Ropers strong order growth was led by the RF and Energy Segments. Strong growth in the Industrial Segment was partially offset by Neptunes comparison to third quarter 2006, when orders were up 38%; Neptunes 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 Ropers businesses reflect the importance of the Companys 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 Companys guidance does not include benefits from future acquisitions, but does include the dilutive effect of the Companys 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 Ropers 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 Companys 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 |