UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 26, 2010
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:
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))
[ ] 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 April
26, 2010, Roper Industries, Inc. (the “Company”) issued a press release
containing information about the Company’s results of operations for
the quarter ended March 31, 2010. A copy of the press release is furnished
as Exhibit
99.1.
In the
press release, the Company uses the non-GAAP financial measures EBITDA and
Free Cash Flow. 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. Free Cash
Flow is defined as "Cash Provided by Operating Activities" ("Operating Cash
Flow") as stated in our Consolidated Statements of Cash Flows, reduced by
capital expenditures. We believe that Free Cash Flow is useful to investors as
the basis for comparing our performance and coverage ratios with other companies
in our industries, although our measure of Free Cash Flow may not be comparable
to similar measures used by other companies.
Item 9.01.
Financial Statements and Exhibits.
(a) Financial Statements of Businesses
Acquired.
| Not applicable. |
(b) Pro Forma Financial
Information.
| Not applicable. |
(c) Shell Company
Transactions.
| Not applicable |
(d) Exhibits.
| 99.1 Press Release of the Company dated April 26, 2010. |
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: April 26, 2010 |
EXHIBIT INDEX
| Exhibit No. | Description | |
|
|
|
|
| 99.1 | Press Release of the Company dated April 26, 2010 |
Exhibit 99.1
|
Contact
Information:
Investor
Relations
941-556-2601
investor-relations@roperind.com
|
 Roper
Industries, Inc.
|
Roper Industries Announces
2010 First
Quarter
Results
Net
Earnings Increase 16%; Orders Increase 20% to $567 Million;
Record
First Quarter Operating Cash Flow of $95 Million
Sarasota, Florida, April 26, 2010 ...
Roper Industries, Inc. (NYSE: ROP) reported financial results
for its first quarter ended March 31, 2010.
Net
earnings for the first quarter were $60 million, or $0.62 per diluted
share. Adjusted earnings per diluted share were $0.65, which excludes
a previously announced acquisition-related inventory charge of
$0.03. Orders were a record $567 million, an increase of 20% over the
first quarter of the prior year. Sales in the first quarter were $534
million, a 6% increase from the comparable period in 2009. Operating
cash flow was a record $95 million, an increase of 88% over the prior year
quarter.
Adjusted
operating margin expanded 170 basis points to 19.6% and operating margin as
reported expanded 160 basis points to 18.8%. During the quarter,
EBITDA increased to $130 million, or 24.3% of sales. Free Cash Flow
was $89 million, representing 17% of sales and 148% of net
earnings.
“We are
encouraged by both a 20% increase in orders and an acceleration of order growth
during the quarter, putting us on track to generate record net earnings for the
year,” said Brian Jellison, Roper’s Chairman, President and CEO. “In
addition to the order growth, our businesses performed well in the quarter, with
a consistent focus on cash and working capital management, resulting in record
free cash flow. Gross margins increased to 52.3%, reflecting strong
execution and growth in higher margin businesses.”
“Our
Verathon acquisition performed very well in its first full quarter as part of
our Scientific and Industrial Imaging segment, with continued double-digit sales
growth,” continued Mr. Jellison. “During the quarter, we acquired the
Heartscape product line, a technology we are enhancing to improve the speed and
accuracy of detecting heart attacks. Our acquisition pipeline is
exciting and we expect to complete additional acquisitions during the
year.”
As a
result of its strong first quarter performance and improving order trends, Roper
is increasing its full year DEPS guidance to $2.95-$3.10 from $2.83-$3.03, and
establishing second quarter DEPS guidance of $0.71-$0.75. The Company
is also increasing its guidance for operating cash flow to $400-$425 million, up
from $375-$400 million. The Company’s guidance excludes the first
quarter impact of acquisition-related inventory charges and any future
acquisitions.
Table
1:
|
Q1 Sales Growth
|
Q1 Orders Growth
|
|
|
Organic
Growth
|
(3%)
|
10%
|
|
Acquisitions
/ Divestitures
|
7%
|
8%
|
|
Foreign
Currency
|
2%
|
2%
|
|
Total
Sales Growth
|
6%
|
20%
|
Table
2: Adjusted Operating Margin
|
Q1 2009
|
Q1 2010
|
Variance
|
|
|
Sales
(A)
|
505.4
|
534.4
|
|
|
Operating
Income (B)
|
86.8
|
100.7
|
|
|
Add: Restructuring
Expenses
|
3.8
|
0
|
|
|
Add: Acquisition-Related
Inventory Charge
|
0
|
3.9
|
|
|
Adjusted
Operating Income (C)
|
90.6
|
104.6
|
|
|
Operating
Margin (B)/(A)
|
17.2%
|
18.8%
|
+160
bps
|
|
Adjusted
Operating Margin (C)/(A)
|
17.9%
|
19.6%
|
+170
bps
|
Table
3: Free Cash Flow (millions)
|
Q1 2010
|
|
|
Operating
Cash Flow
|
$95
|
|
Less:
Capital Expenditures
|
(6)
|
|
Free
Cash Flow
|
$89
|
Conference Call to be Held
at 8:30 AM (ET) Today
A
conference call to discuss these results has been scheduled for 8:30 AM ET on
Monday, April 26, 2010. The call can be accessed via webcast or by
dialing +1 800-967-7184 (US/Canada) or +1 719-325-2100, using confirmation code
4432773. Webcast information and conference call materials will be
made available in the Investors 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
4432773.
About Roper
Industries
Roper
Industries is a market-driven, diversified growth company and is a constituent
of the S&P 500, Fortune 1000, and the Russell 1000 indices. 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, general economic
conditions, 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.
# #
#
Condensed
Consolidated Balance Sheets (unaudited)
(Amounts
in thousands)
|
|
||||||||
|
ASSETS
|
March
31, 2010 |
December
31, 2009 |
||||||
|
CURRENT
ASSETS:
|
||||||||
|
Cash
and cash equivalents
|
$ | 191,285 | $ | 167,708 | ||||
|
Accounts
receivable
|
352,505 | 381,658 | ||||||
|
Inventories
|
174,535 | 178,795 | ||||||
|
Deferred
taxes
|
26,505 | 27,306 | ||||||
|
Unbilled
receivable
|
64,130 | 57,153 | ||||||
|
Other
current assets
|
53,363 | 58,125 | ||||||
|
Total
current assets
|
862,323 | 870,745 | ||||||
|
PROPERTY,
PLANT AND EQUIPMENT, NET
|
107,193 | 109,493 | ||||||
|
|
||||||||
|
OTHER
ASSETS:
|
||||||||
|
Goodwill
|
2,377,257 | 2,388,432 | ||||||
|
Other
intangible assets, net
|
853,296 | 868,900 | ||||||
|
Deferred
taxes
|
29,965 | 33,123 | ||||||
|
Other
assets
|
59,527 | 57,043 | ||||||
|
Total
other assets
|
3,320,045 | 3,347,498 | ||||||
|
TOTAL
ASSETS
|
$ | 4,289,561 | $ | 4,327,736 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Accounts
payable
|
$ | 121,472 | $ | 110,103 | ||||
|
Accrued
liabilities
|
214,576 | 253,441 | ||||||
|
Income
taxes payable
|
- | - | ||||||
|
Deferred
taxes
|
1,452 | 1,671 | ||||||
|
Current
portion of long-term debt
|
110,804 | 112,796 | ||||||
|
Total
current liabilities
|
448,304 | 478,011 | ||||||
|
NONCURRENT
LIABILITIES:
|
||||||||
|
Long-term
debt
|
1,007,443 | 1,040,962 | ||||||
|
Deferred
taxes
|
326,085 | 328,299 | ||||||
|
Other
liabilities
|
59,563 | 58,974 | ||||||
|
Total
liabilities
|
1,841,395 | 1,906,246 | ||||||
|
STOCKHOLDERS'
EQUITY:
|
||||||||
|
Common
stock
|
960 | 958 | ||||||
|
Additional
paid-in capital
|
989,365 | 982,321 | ||||||
|
Retained
earnings
|
1,446,390 | 1,395,586 | ||||||
|
Accumulated
other comprehensive earnings
|
32,694 | 63,945 | ||||||
|
Treasury
stock
|
(21,243 | ) | (21,320 | ) | ||||
|
Total
stockholders' equity
|
2,448,166 | 2,421,490 | ||||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 4,289,561 | $ | 4,327,736 | ||||
Roper Industries, Inc. and Subsidiaries
Condensed
Consolidated Statements of Earnings (unaudited)
(Amounts
in thousands, except per share data)
|
Three
months ended
|
||||||||
|
March
31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Net
sales
|
$ | 534,441 | $ | 505,444 | ||||
|
Cost
of sales
|
254,876 | 254,308 | ||||||
|
Gross
profit
|
279,565 | 251,136 | ||||||
|
Selling,
general and administrative expenses
|
178,849 | 164,344 | ||||||
|
Income
from operations
|
100,716 | 86,792 | ||||||
|
Interest
expense
|
16,181 | 13,509 | ||||||
|
Other
income/(expense)
|
447 | (356 | ) | |||||
|
Earnings
from continuing operations before income
taxes
|
84,982 | 72,927 | ||||||
|
Income
taxes
|
25,257 | 21,368 | ||||||
|
Net
Earnings
|
$ | 59,725 | $ | 51,559 | ||||
|
Earnings
per share:
|
||||||||
|
Basic
|
$ | 0.64 | $ | 0.57 | ||||
|
Diluted
|
$ | 0.62 | $ | 0.56 | ||||
|
Weighted
average common and common
|
||||||||
|
equivalent
shares outstanding:
|
||||||||
|
Basic
|
93,810 | 90,132 | ||||||
|
Diluted
|
96,036 | 92,302 | ||||||
Roper
Industries, Inc. and Subsidiaries
Condensed
Consolidated Statements of Cash Flows (unaudited)
(Amounts
in thousands)
|
|
||||||||
|
Three
months ended March 31,
|
||||||||
| 2010 | 2009 |
|
||||||
|
Net
earnings
|
$ | 59,725 | $ | 51,559 | ||||
|
Non-cash
items:
|
||||||||
|
Depreciation
|
9,409 | 8,769 | ||||||
|
Amortization
|
19,095 | 17,457 | ||||||
|
Stock-based
compensation expense
|
7,008 | 6,985 | ||||||
|
Income
taxes
|
11,353 | (12,449 | ) | |||||
|
Changes
in assets and liabilities:
|
||||||||
|
Receivables
|
2,781 | 27,264 | ||||||
|
Inventory
|
(2,344 | ) | (2,855 | ) | ||||
|
Accounts
payable
|
12,901 | (5,524 | ) | |||||
|
Accrued
liabilities
|
(24,762 | ) | (41,461 | ) | ||||
|
Other,
net
|
(80 | ) | 832 | |||||
|
Cash
provided by operating activities
|
95,086 | 50,577 | ||||||
|
Business
acquisitions, net of cash acquired
|
(15,000 | ) | (683 | ) | ||||
|
Capital
expenditures
|
(6,485 | ) | (5,228 | ) | ||||
|
Other,
net
|
2,841 | (963 | ) | |||||
|
Cash
used by investing activities
|
(18,644 | ) | (6,874 | ) | ||||
|
Principal
debt borrowings
|
- | - | ||||||
|
Principal
debt payments
|
(2,999 | ) | (83,917 | ) | ||||
|
Revolver
borrowings (payments), net
|
(40,000 | ) | 51,000 | |||||
|
Debt
issuance costs
|
- | (404 | ) | |||||
|
Dividends
|
(8,878 | ) | (7,394 | ) | ||||
|
Excess
tax benefit from share-based payment
|
1,021 | - | ||||||
|
Proceeds
from exercise of stock options
|
2,443 | 1,168 | ||||||
|
Other,
net
|
366 | (1,347 | ) | |||||
|
Cash
used by financing activities
|
(48,047 | ) | (40,894 | ) | ||||
|
Effect
of exchange rate changes on cash
|
(4,818 | ) | (3,369 | ) | ||||
|
Net
increase (decrease) in cash and equivalents
|
23,577 | (560 | ) | |||||
|
Cash
and equivalents, beginning of period
|
167,708 | 178,069 | ||||||
|
Cash
and equivalents, end of period
|
$ | 191,285 | $ | 177,509 | ||||
Roper
Industries, Inc. and Subsidiaries
Selected
Segment Financial Data (unaudited)
(Amounts
in thousands and percents of net sales)
|
Three
months ended March 31,
|
||||||||||||||||
|
2010
|
2009
|
|||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||
|
Net
sales:
|
||||||||||||||||
|
Industrial
Technology
|
$ | 135,312 | $ | 130,641 | ||||||||||||
|
Energy
Systems & Controls
|
105,678 | 106,611 | ||||||||||||||
|
Scientific
& Industrial Imaging
|
130,244 | 84,120 | ||||||||||||||
|
RF
Technology
|
163,207 | 184,072 | ||||||||||||||
|
Total
|
$ | 534,441 | $ | 505,444 | ||||||||||||
|
Gross
profit:
|
||||||||||||||||
|
Industrial
Technology
|
$ | 67,512 | 49.9 | % | $ | 62,709 | 48.0 | % | ||||||||
|
Energy
Systems & Controls
|
53,491 | 50.6 | % | 55,363 | 51.9 | % | ||||||||||
|
Scientific
& Industrial Imaging
|
77,510 | 59.5 | % | 45,750 | 54.4 | % | ||||||||||
|
RF
Technology
|
81,052 | 49.7 | % | 87,314 | 47.4 | % | ||||||||||
|
Total
|
$ | 279,565 | 52.3 | % | $ | 251,136 | 49.7 | % | ||||||||
|
Operating
profit*:
|
||||||||||||||||
|
Industrial
Technology
|
$ | 31,766 | 23.5 | % | $ | 28,583 | 21.9 | % | ||||||||
|
Energy
Systems & Controls
|
18,923 | 17.9 | % | 17,519 | 16.4 | % | ||||||||||
|
Scientific
& Industrial Imaging
|
29,334 | 22.5 | % | 16,081 | 19.1 | % | ||||||||||
|
RF
Technology
|
32,201 | 19.7 | % | 37,383 | 20.3 | % | ||||||||||
|
Total
|
$ | 112,224 | 21.0 | % | $ | 99,566 | 19.7 | % | ||||||||
|
Operating
profit excluding restructuring*:
|
||||||||||||||||
|
Industrial
Technology
|
$ | 31,766 | 23.5 | % | $ | 30,377 | 23.3 | % | ||||||||
|
Energy
Systems & Controls
|
18,923 | 17.9 | % | 18,911 | 17.7 | % | ||||||||||
|
Scientific
& Industrial Imaging
|
29,334 | 22.5 | % | 16,634 | 19.8 | % | ||||||||||
|
RF
Technology
|
32,201 | 19.7 | % | 37,482 | 20.4 | % | ||||||||||
|
Total
|
$ | 112,224 | 21.0 | % | $ | 103,404 | 20.5 | % | ||||||||
|
Net
Orders:
|
||||||||||||||||
|
Industrial
Technology
|
$ | 154,093 | $ | 139,393 | ||||||||||||
|
Energy
Systems & Controls
|
115,300 | 97,814 | ||||||||||||||
|
Scientific
& Industrial Imaging
|
131,110 | 76,599 | ||||||||||||||
|
RF
Technology
|
166,743 | 157,783 | ||||||||||||||
|
Total
|
$ | 567,246 | $ | 471,589 | ||||||||||||
* Operating
profit is before unallocated corporate general and administrative
expenses. These expenses were
$11,508 and $12,774 for the three months ended March 31, 2010 and 2009,
respectively.