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
February 21, 2008
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 February 21, 2008, Roper Industries, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations for the year ended December 31, 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 February 21, 2008. |
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: February 22, 2008 | ||||||
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Press Release of the Company dated February 21, 2008 |
Exhibit 99.1
Roper Industries, Inc.
| Contact Information: +1 (941) 556-2601 |
Roper Industries Announces Record Results For 2007 Fourth Quarter and Full Year
Full Year Diluted Earnings Per Share of $2.68; Sales up 24% to $2.1 Billion; Net Earnings up 29% to $250 Million; Operating Cash Flow Increases 31% to $344 Million
Sarasota, Florida,
February 21, 2008... Roper Industries, Inc. (NYSE: ROP) reported record financial results
for the fourth quarter and full year ended December 31, 2007.
Fourth Quarter 2007
Fourth quarter diluted earnings per share (DEPS) were $0.77, up 24% from the comparable period in the prior year. Fourth quarter net earnings increased 27% to $72 million, and net sales were $560 million, an increase of 20% from the comparable period in the prior year. Excluding acquisitions, fourth quarter sales increased 14%, including a 3% benefit from foreign exchange. Operating cash flow of $117 million in the quarter established a record for any quarter in the company’s history.
Operating profit for the fourth quarter increased 27% to $124 million, or 22.1% of net sales, up 120 basis points from the comparable period in the prior year. EBITDA in the fourth quarter increased 23% to $146 million, and represented 26.1% of net sales.
Full Year 2007
For the full year, DEPS were $2.68. Net earnings were $250 million, representing 11.9% of net sales of $2.1 billion. Excluding acquisitions, sales increased 14% for the full year, including a 2% benefit from foreign exchange. Full year operating profit was $438 million, up 30% from 2006, and operating margins expanded 100 basis points to 20.9% of net sales. Operating cash flow was $344 million, an increase of 31% from 2006.
“We are delighted that Roper once again achieved record performance in 2007 with the highest sales, orders, net earnings, EBITDA and cash flow in our history,” said Brian Jellison, Roper’s Chairman, President and CEO. “EBITDA increased $109 million in 2007 to $529 million and EBITDA margins reached 25.2%, up 50 basis points from the prior year. Internal orders grew 10% during 2007, and we finished the year with a record backlog of $532 million. The company’s book-to-bill ratio remained strong despite an unprecedented fourth quarter in 2006 driven by our Middle East tolling win. Our operating margins continued to expand with record results in the fourth quarter and the full year. We are particularly pleased that our operating people made outstanding progress in reducing net working capital. These improvements, along with strong operating performance in our businesses, led to operating cash flow of $344 million in 2007, representing 16.4% of revenue and 137% of net earnings.”
Acquisition of CBORD
Separately, Roper announced today
the acquisition of The CBORD Group, Inc., the leading provider of card systems and integrated security solutions to higher
education, healthcare and other markets in a transaction valued at $367 million, including $23 million in tax benefits that can be
utilized over time. CBORD extends the reach of Roper’s RF segment to the education and healthcare markets, and broadens the
company’s cash generation solution technologies beyond the water utility and transportation markets. Roper expects the
addition of CBORD to be immediately cash accretive, to add $0.02-$0.03 to 2008 diluted earnings per share and to increase 2009
diluted earnings per share by up to $0.10. Including the acquisition of CBORD, Roper has made acquisition investments in the last
twelve months totaling $474 million.
2008 Guidance
“In 2007 we continued the transformation of Roper and finished the year with exceptional strength across our businesses. With a record year end backlog, strong order growth and excellent strategic positioning, we expect a strong first quarter and another record year in 2008,” Mr. Jellison added.
Roper expects 2008 net earnings of at least $294 million and EBITDA to exceed $600 million. The company expects to achieve first quarter DEPS of $0.65-$0.67 and full year 2008 DEPS of $3.10-$3.20, including the dilutive effect of the Company’s senior subordinated convertible notes based on the company’s stock price at the end of 2007.
Table 1: EBITDA (Millions)
Q4 2006 |
Q4 2007 |
2006 |
2007 |
2008E |
|
Net Earnings |
$57 |
$72 |
$193 |
$250 |
$294+ |
Add: Interest Expense |
12 |
12 |
45 |
52 |
48+ |
Add: Income Taxes |
29 |
39 |
100 |
134 |
158+ |
Add: Depreciation and Amortization |
22 |
23 |
82 |
93 |
100+ |
Rounding |
(1) |
- |
- |
- |
- |
EBITDA |
119 |
146 |
420 |
529 |
600+ |
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, February 22, 2007. The call can be accessed via webcast or by dialing (888) 713-3596 (US/Canada) or +1 (913) 312-0853, using access code 5877141. 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 5877141.
About Roper Industries
Roper Industries is a diversified growth company with annual revenues in excess of $2.1 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)
December 31, |
December 31, |
||
2007 |
2006 |
||
ASSETS |
|||
CURRENT ASSETS: |
|||
Cash and cash equivalents |
$ 308,768 |
$ 69,478 |
|
Accounts receivable |
359,808 |
324,514 |
|
Inventories |
174,138 |
168,319 |
|
Deferred taxes |
27,800 |
17,908 |
|
Other current assets |
80,623 |
47,276 |
|
Total current assets |
951,137 |
627,495 |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
107,513 |
107,003 |
|
OTHER ASSETS: |
|||
Goodwill |
1,706,083 |
1,651,208 |
|
Other intangible assets, net |
613,505 |
544,136 |
|
Deferred taxes |
23,854 |
21,702 |
|
Other assets |
51,092 |
43,815 |
|
Total other assets |
2,394,534 |
2,260,861 |
|
TOTAL ASSETS |
$ 3,453,184 |
$ 2,995,359 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
CURRENT LIABILITIES: |
|||
Accounts payable |
$ 115,809 |
$ 96,139 |
|
Accrued liabilities |
194,055 |
184,148 |
|
Income taxes payable |
24,121 |
5,896 |
|
Deferred taxes |
2,442 |
1,555 |
|
Current portion of long-term debt |
331,103 |
299,911 |
|
Total current liabilities |
667,530 |
587,649 |
|
NONCURRENT LIABILITIES: |
|||
Long-term debt |
727,489 |
726,881 |
|
Deferred taxes |
221,411 |
169,994 |
|
Other liabilities |
46,948 |
23,996 |
|
Total liabilities |
1,663,378 |
1,508,520 |
|
STOCKHOLDERS' EQUITY: |
|||
Common stock |
910 |
900 |
|
Additional paid-in capital |
757,318 |
717,751 |
|
Retained earnings |
944,886 |
721,899 |
|
Accumulated other comprehensive earnings |
108,732 |
68,666 |
|
Treasury stock |
(22,040) |
(22,377) |
|
Total stockholders' equity |
1,789,806 |
1,486,839 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 3,453,184 |
$ 2,995,359 |
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts
in thousands, except per share data)
Three months ended |
Twelve months ended |
||||||
2007 |
2006 |
2007 |
|
2006 |
|||
Net sales |
$ 560,084 |
$ 465,484 |
$ 2,102,049 |
$ 1,700,734 |
|||
Cost of sales |
274,011 |
229,689 |
1,043,654 |
|
839,409 |
||
Gross profit |
286,073 |
235,795 |
1,058,395 |
861,325 |
|||
Selling, general and administrative expenses |
162,264 |
138,530 |
620,041 |
|
523,672 |
||
Income from operations |
123,809 |
97,265 |
438,354 |
337,653 |
|||
Interest expense |
12,238 |
11,623 |
52,195 |
44,801 |
|||
Loss on extinguishment of debt |
- |
- |
- |
- |
|||
Other income/(expense) |
(618) |
(88) |
(2,502) |
|
20 |
||
Earnings before income taxes |
110,953 |
85,554 |
383,657 |
292,872 |
|||
Income taxes |
38,723 |
28,823 |
133,624 |
|
99,548 |
||
Net Earnings |
$ 72,230 |
$ 56,731 |
$ 250,033 |
|
$ 193,324 |
||
Earnings per share: |
|||||||
Basic |
$ 0.81 |
$ 0.65 |
$ 2.83 |
$ 2.23 |
|||
Diluted |
$ 0.77 |
$ 0.62 |
$ 2.68 |
$ 2.13 |
|||
Weighted average common and common |
|||||||
equivalent shares outstanding: |
|||||||
Basic |
88,698 |
87,323 |
88,390 |
86,842 |
|||
Diluted |
93,916 |
91,572 |
93,229 |
|
90,880 |
||
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
Twelve months ended |
|||
2007 |
2006 |
||
Net earnings |
$ 250,033 |
$ 193,324 |
|
Depreciation |
31,805 |
29,939 |
|
Amortization |
61,375 |
52,105 |
|
Other, net |
594 |
(12,830) |
|
Cash provided by operating activities |
343,807 |
262,538 |
|
Business acquisitions, net of cash acquired |
(106,942) |
(352,125) |
|
Capital expenditures |
(30,107) |
(32,153) |
|
Other, net |
(5,339) |
(2,387) |
|
Cash used by investing activities |
(142,388) |
(386,665) |
|
Debt borrowings, net |
27,600 |
125,663 |
|
Issuance of common stock |
- |
- |
|
Dividends |
(22,954) |
(20,402) |
|
Other, net |
24,902 |
33,030 |
|
Cash provided by financing activities |
29,548 |
138,291 |
|
Effect of exchange rate changes on cash |
8,323 |
2,198 |
|
Net increase in cash and equivalents |
239,290 |
16,362 |
|
Cash and equivalents, beginning of period |
69,478 |
53,116 |
|
Cash and equivalents, end of period |
$ 308,768 |
$ 69,478 |
|
Roper
Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
Three months ended December 31, |
Twelve months ended December 31, |
||||||||||||||
2007 |
2006 |
2007 |
2006 |
||||||||||||
Amount |
% |
Amount |
% |
Amount |
% |
Amount |
% |
||||||||
Net sales: |
|||||||||||||||
Industrial Technology |
$ 166,769 |
|
$ 147,789 |
|
$ 644,436 |
|
$ 549,993 |
|
|||||||
Energy Systems & Controls |
155,376 |
|
110,590 |
|
516,420 |
|
343,699 |
|
|||||||
Scientific & Industrial Imaging |
99,121 |
|
88,983 |
|
376,163 |
|
338,906 |
|
|||||||
RF Technology |
138,818 |
|
118,122 |
|
565,030 |
|
468,136 |
|
|||||||
Total |
$ 560,084 |
|
$ 465,484 |
|
$2,102,049 |
|
$1,700,734 |
|
|||||||
|
|||||||||||||||
Gross profit: |
|||||||||||||||
Industrial Technology |
$ 82,293 |
49.3% |
$ 70,885 |
48.0% |
$ 310,700 |
48.2% |
$ 263,274 |
47.9% |
|||||||
Energy Systems & Controls |
85,616 |
55.1% |
59,906 |
54.2% |
276,775 |
53.6% |
186,379 |
54.2% |
|||||||
Scientific & Industrial Imaging |
54,032 |
54.5% |
50,671 |
56.9% |
206,661 |
54.9% |
192,396 |
56.8% |
|||||||
RF Technology |
64,132 |
46.2% |
54,333 |
46.0% |
264,259 |
46.8% |
219,276 |
46.8% |
|||||||
Total |
$ 286,073 |
51.1% |
$ 235,795 |
50.7% |
$1,058,395 |
50.4% |
$ 861,325 |
50.6% |
|||||||
|
|||||||||||||||
Operating profit*: |
|||||||||||||||
Industrial Technology |
$ 44,029 |
26.4% |
$ 36,179 |
24.5% |
$ 164,750 |
25.6% |
$ 128,668 |
23.4% |
|||||||
Energy Systems & Controls |
44,788 |
28.8% |
31,313 |
28.3% |
126,367 |
24.5% |
90,390 |
26.3% |
|||||||
Scientific & Industrial Imaging |
19,777 |
20.0% |
19,782 |
22.2% |
73,230 |
19.5% |
72,485 |
21.4% |
|||||||
RF Technology |
26,388 |
19.0% |
18,700 |
15.8% |
117,057 |
20.7% |
81,068 |
17.3% |
|||||||
Total |
$ 134,982 |
24.1% |
$ 105,974 |
22.8% |
$ 481,404 |
22.9% |
$ 372,611 |
21.9% |
|||||||
|
|||||||||||||||
Net Orders: |
|||||||||||||||
Industrial Technology |
$ 160,248 |
|
$ 152,727 |
|
$ 639,348 |
|
$ 589,322 |
|
|||||||
Energy Systems & Controls |
149,288 |
|
115,530 |
|
525,899 |
|
346,880 |
|
|||||||
Scientific & Industrial Imaging |
99,735 |
|
96,038 |
|
377,653 |
|
341,178 |
|
|||||||
RF Technology |
149,979 |
|
162,574 |
|
575,100 |
|
511,188 |
|
|||||||
Total |
$ 559,250 |
|
$ 526,869 |
|
$2,118,000 |
|
$1,788,568 |
|
|||||||
*
Operating profit is before unallocated corporate general and administrative expenses. Such expenses
were $11,173 and
$8,709 for the three months ended December 31, 2007 and 2006, respectively, and
$43,050 and $34,958 for the twelve months
ended December 31, 2007 and 2006, respectively.