SEC Filing | Roper Technologies, Inc.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . ---------- --------- Commission File Number 0-19818 ROPER INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 51-0263969 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 160 Ben Burton Road Bogart, Georgia 30622 (Address of principal executive offices) (Zip Code) (706) 369-7170 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- The number of shares outstanding of the Registrant's common stock as of September 10, 1996 was 15,153,586.

ROPER INDUSTRIES, INC. REPORT ON FORM 10-Q FOR THE QUARTER ENDED JULY 31, 1996 TABLE OF CONTENTS Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Condensed Consolidated Statements of Earnings 1 Condensed Consolidated Balance Sheets 2 Condensed Consolidated Statements of Cash Flows 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 i

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Roper Industries, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended July 31, July 31, 1996 1995 1996 1995 - -------------------------------------------------------------------------------- Net sales $ 59,947 $ 47,095 $ 159,948 $ 121,328 Cost of sales 30,259 21,634 78,760 58,330 - -------------------------------------------------------------------------------- Gross profit 29,688 25,461 81,188 62,998 Selling, general and administrative expenses 18,242 14,676 47,409 39,847 - -------------------------------------------------------------------------------- Income from operations 11,446 10,785 33,779 23,151 Interest expense 1,099 519 1,778 1,499 Other income 14 31 106 101 - -------------------------------------------------------------------------------- Earnings before income taxes 10,361 10,297 32,107 21,753 Income taxes 3,372 3,629 10,656 7,633 - -------------------------------------------------------------------------------- Net earnings $ 6,989 $ 6,668 $ 21,451 $ 14,120 ================================================================================ Per share data: Earnings per common share (note 2) $ 0.45 $ 0.44 $ 1.39 $ 0.94 ================================================================================ Cash dividends per common share $ 0.075 $ 0.05 $ 0.225 $ 0.15 ================================================================================ Weighted average common shares outstanding 15,522 15,198 15,417 15,098 ================================================================================ See accompanying notes to condensed consolidated financial statements. 1

Roper Industries, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (In thousands) July 31, October 31, ASSETS 1996 1995 - -------------------------------------------------------------------------------- CURRENT ASSETS Cash and cash equivalents $ 569 $ 2,322 Receivables (note 3) 49,687 38,853 Inventories (note 5) 32,945 23,330 Other current assets 3,121 2,063 - -------------------------------------------------------------------------------- Total current assets 86,322 66,568 - -------------------------------------------------------------------------------- PROPERTY, PLANT & EQUIPMENT Property, plant and equipment 51,935 45,583 Less: accumulated depreciation (27,518) (24,834) - -------------------------------------------------------------------------------- Property, plant and equipment, net 24,417 20,749 - -------------------------------------------------------------------------------- INTANGIBLES & OTHER ASSETS, NET 134,389 68,228 - -------------------------------------------------------------------------------- TOTAL ASSETS $ 245,128 $ 155,545 ================================================================================ LIABILITIES AND STOCKHOLDERS' EQUITY - -------------------------------------------------------------------------------- CURRENT LIABILITIES Accounts payable $ 10,608 $ 7,690 Other current liabilities 16,343 15,051 Income taxes payable 1,118 4,959 - -------------------------------------------------------------------------------- Total current liabilities 28,069 27,700 - -------------------------------------------------------------------------------- NON-CURRENT LIABILITIES Long-term debt 82,597 20,150 Other liabilities 3,252 2,100 - -------------------------------------------------------------------------------- Total liabilities 113,918 49,950 - -------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY Preferred stock - - Common stock 151 149 Additional paid-in capital 50,927 43,379 Retained earnings 80,132 62,067 - -------------------------------------------------------------------------------- Total stockholders' equity 131,210 105,595 - -------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $245,128 $155,545 ================================================================================ See accompanying notes to condensed consolidated financial statements. 2

Roper Industries, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine Months Ended July 31, 1996 1995 - ------------------------------------------------------------------------------ Net cash provided by operating activities $ 18,147 $ 9,790 - ------------------------------------------------------------------------------ Cash flows from investing activities: Acquisitions of businesses, net of cash acquired (74,718) (12,002) Capital expenditures (4,160) (1,997) - ------------------------------------------------------------------------------ Net cash used in investing activities (78,878) (13,999) - ------------------------------------------------------------------------------ Cash flows from financing activities: Proceeds from long-term debt 75,702 27,257 Principal payments on long-term debt (13,272) (21,437) Decrease in bank overdraft (699) (172) Dividends paid on common stock (3,385) (2,231) Other 670 419 - ------------------------------------------------------------------------------ Net cash provided by financing activities 59,016 3,836 - ------------------------------------------------------------------------------ Effect of exchange rate changes on cash (38) 108 Net decrease in cash and cash equivalents (1,753) (265) - ------------------------------------------------------------------------------ Cash and cash equivalents, beginning of period 2,322 2,023 Cash and cash equivalents, end of period $ 569 $ 1,758 - ------------------------------------------------------------------------------ See accompanying notes to condensed consolidated financial statements. 3

Roper Industries, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements 1. Basis of Presentation The accompanying condensed consolidated financial statements for the three-month and nine-month periods ended July 31, 1996 and 1995 are unaudited. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows of Roper Industries, Inc. and its wholly-owned subsidiaries ("the Company") for all periods presented. The results of operations are not necessarily indicative of the results to be expected for the full fiscal year. It is recommended that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's 1995 Annual Report on Form 10-K as filed with the Securities and Exchange Commission. 2. Earnings Per Share Earnings per common share is calculated by dividing net earnings by the weighted average common and common equivalent shares outstanding during the period. Common stock equivalents consist of stock options. There is no difference between earnings per share on a primary or fully diluted basis. 3. Concentration of Credit Risk At July 31,1996, the Company had approximately $9.1 million of trade receivables due from Gazprom, the Russian natural gas company, of which $1.5 million is classified as long term assets in the accompanying condensed consolidated balance sheet. Subsequent to quarter end, the Company received another payment from Gazprom totaling $3.3 million. Based on past credit experience with this customer, management believes that these receivables will be collected. 4. Supplemental Cash Flow Information Cash payments for the nine months ended July 31, 1996 and 1995 included interest of $1,108,000 and $1,286,000, respectively and income taxes of $13,720,000 and $10,695,000, respectively. 4

Supplemental schedule of noncash investing and financing activities: In connection with the businesses acquired, liabilities were assumed as follows: Nine Months Ended July 31, 1996 1995 ------------------ Fair value of assets acquired $ 86,222 $ 14,925 Cash paid for assets acquired (75,702) (12,435) Common stock issued (5,700) (1,814) ------------------------------------------------------- Total liabilities assumed $ 4,820 $ 676 ------------------------------------------------------- 5. Inventories Inventories are summarized below (in thousands): July 31, October 31, 1996 1995 ------------------------------------------------------------- Raw materials and supplies $ 17,004 $ 12,052 Work in process 9,851 6,218 Finished products 7,745 6,576 Less LIFO Reserve (1,655) (1,516) ------------------------------------------------------------- Total $ 32,945 $ 23,330 ============================================================= 6. Business Acquisitions On May 22, 1996 the Company acquired Fluid Metering, Inc. ("FMI") which manufactures and sells low-flow, precision dispense pumps. The purchase price for the acquisition was approximately $30.2 million, consisting of (i) $23.0 million in cash, (ii) 124,026 shares of the Company's common stock valued at $5.7 million, (iii) $1,124,000 cash paid to FMI June 21, 1996 to fund the redemption of its outstanding debentures, and (iv) $400,000 in cash to be paid in equal installments on May 22, 1997 and 1998. The cash portion of the purchase price paid at closing was financed under the Company's existing credit agreement. The excess of the purchase price over the fair value of the net assets acquired of $27.2 million is being amortized over 30 years. On May 31, 1996 the Company acquired Gatan International, Inc. (collectively with its subsidiaries referred to as "Gatan"), which designs, manufactures, and markets analytical systems and products used in the operation of transmission and scanning electron microscopes. The purchase price for the acquisition was approximately $49.3 5

million, net of cash acquired. The purchase price was financed under the Company's existing credit agreement. The excess of the purchase price over the fair value of the net assets acquired of $36.9 million is being amortized over 30 years. These acquisitions were accounted for by the purchase method of accounting, and accordingly, the assets acquired and liabilities assumed were recorded at their fair values. The results of operations of the acquired companies were included subsequent to their respective dates of acquisition. 7. Industry Segment Sales and operating profit by industry segment are set forth in the following table (in thousands): Three Months Ended Nine Months Ended July 31, July 31, 1996 1995 % Chg 1996 1995 % Chg - ------------------------------------------------------------------------------------------------------ (unaudited) (unaudited) Net sales: Industrial Controls $ 37,992 $ 26,577 43.0% $ 97,941 $ 67,806 44.4% Fluid Handling 21,955 20,518 7.0% 62,007 53,522 15.9% - ------------------------------------------------------------------------------------------------------ Total $ 59,947 $ 47,095 27.3% $ 159,948 $ 121,328 31.8% - ------------------------------------------------------------------------------------------------------ Gross profit: Industrial Controls $ 20,574 $ 15,200 35.4% $ 53,444 $ 37,500 42.5% Fluid Handling 9,114 10,261 -11.2% 27,744 25,498 8.8% - ------------------------------------------------------------------------------------------------------ Total $ 29,688 $ 25,461 16.6% $ 81,188 $ 62,998 28.9% - ------------------------------------------------------------------------------------------------------ Operating profit (a): Industrial Controls $ 7,293 $ 4,614 58.1% $ 19,476 $ 9,347 108.4% Fluid Handling 5,004 7,027 -28.8% 17,227 16,335 5.5% - ------------------------------------------------------------------------------------------------------ Total $ 12,297 $ 11,641 5.6% $ 36,703 $ 25,682 42.9% - ------------------------------------------------------------------------------------------------------ (a) Operating profit is before any allocation for corporate general and administrative expenses. Corporate general and administrative expenses were $851 for three months ended July 31, 1996 and $856 for three months ended July 31, 1995, and $2,924 and $2,531 for the nine months ended July 31, 1996 and 1995, respectively. 6

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This discussion should be read in conjunction with Management's Discussion and Analysis included in the Company's latest Annual Report on Form 10-K. 1. Results of operations General For the current quarter and year-to-date, the Company achieved increased net sales, net earnings and earnings per share. These increases were due mainly to the inclusion of the three latest acquisitions, Metrix Instrument Co. L.P. ("Metrix"), acquired in September 1995, and Gatan and FMI, acquired in May 1996, and sales gains at most core businesses. The following table sets forth certain information relating to the operations of the Company expressed as a percentage of net sales: Three Months Ended Nine Months Ended July 31, July 31, 1996 1995 1996 1995 - -------------------------------------------------------------------------------- Sales 100.0% 100.0% 100.0% 100.0% Cost of sales 50.5% 45.9% 49.2% 48.1% - -------------------------------------------------------------------------------- Gross profit 49.5% 54.1% 50.8% 51.9% Selling, general and administrative expenses 30.4% 31.2% 29.7% 32.9% - -------------------------------------------------------------------------------- Income from operations 19.1% 22.9% 21.1% 19.0% Interest expense 1.8% 1.1% 1.1% 1.2% Other income 0.0% 0.1% 0.1% 0.1% - -------------------------------------------------------------------------------- Earnings before income taxes 17.3% 21.9% 20.1% 17.9% Income taxes 5.6% 7.7% 6.7% 6.3% - -------------------------------------------------------------------------------- Net earnings 11.7% 14.2% 13.4% 11.6% - -------------------------------------------------------------------------------- 7

The profit margins for each segment are listed below as a percentage of net sales. Three Months Ended Nine Months Ended July 31, July 31, 1996 1995 1996 1995 - -------------------------------------------------------------------------- Gross profit: Industrial Controls 54.1% 57.2% 54.6% 55.3% Fluid Handling 41.5% 50.0% 44.7% 47.6% - -------------------------------------------------------------------------- Operating profit (a): Industrial Controls 19.2% 17.4% 19.9% 13.8% Fluid Handling 22.8% 34.2% 27.8% 30.5% - -------------------------------------------------------------------------- (a) Before allocation of corporate general and administrative expenses Three Months Ended July 31, 1996 Compared to 1995 Net sales totaled $59.9 million as compared to $47.1 million for the same period last year. The Industrial Controls segment experienced an increase in net sales totaling $11.4 million or 43%. Completion of several significant equipment and engineering projects at Compressor Controls Corporation and the inclusion of two recent acquisitions, Metrix (acquired in September 1995) and Gatan (acquired in May 1996) were the principal factors affecting this segment. Net sales for the Fluid Handling segment increased by $1.4 million to $22.0 million, an increase of 7%. Inclusion of FMI (acquired May 1996) offset a steep decline in sales volume at Integrated Designs LP (IDI), which was adversely affected by a slow-down in the semi-conductor capital equipment market. Gross profit of $29.7 million in the third quarter of 1996 increased by $4.2 million from the same period last year. The gross margin declined to 49.5% as compared to 54.1% for 1995. The gross margin for the Industrial Controls segment declined slightly due to a less favorable product mix, principally a higher percentage of lower margin outsourced products shipped to Gazprom. The gross margin for the Fluid Handling segment decreased to 41.5% versus 50.0% for 1995, primarily due to lower margins at IDI caused by lower sales volumes, vendor price increases, and increased discounted sales to OEM's, and lower sales volumes at Roper Pump Company. Selling, general and administrative expenses (S,G&A) increased by $3.6 million to $18.2 million, an increase of 24%. S,G&A as a percentage of net sales was 30.4% in 1996 and 31.2% in 1995. Inclusion of Metrix, FMI, and Gatan in the current quarter was the principal factor affecting S,G&A. 8

Income from operations increased by $0.7 million to $11.4 million, while operating margins decreased to 19.1% versus 22.9% in the prior year period. In the Industrial Controls segment, operating profit (before allocation of corporate administrative expenses) increased by $2.7 million to $7.3 million or 19.2% of net sales, principally due to the inclusion of Metrix and Gatan and favorable operating leverage on the higher sales volume. For the Fluid Handling segment, operating profit (before allocation of corporate administrative expenses) decreased by $2.0 million to $5.0 million or 22.8% of net sales, principally due to lower operating results at IDI. Interest expense increased by $0.6 million to $1.1 million, principally due to additional borrowings for the recent acquisitions. The Company's effective tax rate was 32.6% versus 35.2% for the same period last year. The decrease in the effective rate reflects an estimated higher tax benefit associated with foreign sales, a reduction in the state income tax burden, and increased tax credits related to research and experimentation costs. Net earnings in the third quarter of 1996 were $7.0 million or $.45 per common share as compared to $6.7 million or $.44 per common share for 1995. For the current year quarter, bookings decreased by 20% to $54.1 million (pro forma to include Metrix, FMI, and Gatan for 1995). The decrease in bookings largely reflect a $15.5 million order received from Gazprom in the prior year quarter. Excluding this order, bookings at core businesses increased by 4%. Sales order backlog was $51.0 million and $46.6 million at July 31, 1996 and 1995, respectively. Nine Months Ended July 31, 1996 Compared to 1995 Net sales totaled $159.9 million as compared to $121.3 million for the same period last year. The Industrial Controls segment experienced an increase in net sales totaling $30.1 million or 44.4%. Increased shipments to Gazprom, inclusion of recent acquisitions, and sales gains at all of the remaining companies accounted for the increase in this segment. Net sales for the Fluid Handling segment increased by $8.5 million to $62.0 million, an increase of 16%, principally due to sales gains at IDI, occurring early in the fiscal year, and the inclusion of FMI. Gross profit of $81.2 million in 1996 increased by $18.2 million from the same period last year, while the gross margin fell to 50.8% from 51.9% 1995. Both business segments experienced slightly lower gross margins, with the decline in the Industrial Controls segment being principally attributable to less favorable product mix, while, the decline in the Fluid Handling segment largely occurred at IDI. IDI's lower gross margin was primarily caused by three factors: (i) increasing concentration of sales to OEM's and (ii) higher field service engineering costs to support business growth, and (iii) price pressures from suppliers. Selling, general and administrative expenses (S,G&A) increased by $7.6 million to $47.4 million, an increase of 19%. S,G&A as a percentage of net sales was 29.7% in 1996 and 9

32.9% in 1995. Inclusion of recent acquisitions and higher commission costs from a changed mix of sales were the principal factors affecting S,G&A. Income from operations increased by $10.6 million to $33.8 million, accompanied by an increase in the operating margin to 21.1% versus 19.0% in the prior year period. In the Industrial Controls segment, operating profit (before allocation of corporate administrative expenses) increased by $10.1 million to $19.5 million or 19.9% of net sales, principally due to the increased shipments to Gazprom, inclusion of recent acquisitions, and sales gains in most core businesses. For the Fluid Handling segment, operating profit (before allocation of corporate administrative expenses) increased by $.9 million to $17.2 million or 27.8% of net sales. Sales gains by Integrated Designs and inclusion of FMI accounted for the majority of this increase. Interest expense increased by $0.3 million or 19%, due to additional borrowing to finance the recent acquisitions. The Company's effective tax rate was 33.2% versus 35.1% for the same period last year. The decrease in the effective rate reflects an estimated higher tax benefit associated with foreign sales and a reduction in the state tax burden. Net earnings for the first nine months of 1996 were $21.5 million or $1.39 per common share as compared to $14.1 million of $.94 per common share for 1995. For the current year, bookings totaled $157.8 million and were comparable with the prior year period (pro forma to include Metrix, FMI, and Gatan for 1995). 2. Financial Condition, Liquidity and Capital Resources Working capital increased to $58.3 million at July 31, 1996 from $38.9 million at October 31, 1995. The acquisitions of FMI and Gatan contributed $10.2 million to the increase in working capital. The balance of the change is principally due to an increase in accounts receivable and a reduction in income taxes payable. The increase in accounts receivable was comparable with the growth in net sales. For the first nine months, cash flow from operations was $18.1 million as compared to $9.8 million for the same period last year. The increase in cash flow from operations resulted from higher net earnings for the period. Capital expenditures totaled $4.2 million as compared to $2.0 million for the nine months ended July 31, 1995. Fiscal 1996 included the addition of a large machining center in the Fluid Handling segment. In May 1996, Roper modified its principal bank credit agreement, raising the borrowing capacity to $100 million, up from $50 million, and obtained more favorable financing terms. Total long-term debt increased from $20.2 million at October 31, 1995 to $82.6 million. This increase in long-term debt resulted from financing the acquisitions of FMI and Gatan, totaling $74.7 million. As of July 31, 1996, the Company had $19.9 million available under its revolving line of credit. Long-term debt to total capitalization was 38.6% at July 31, 1996 as compared to 16.0% at previous fiscal year-end. The increase in intangible 10

assets reflects the goodwill, totaling $64.1 million, recorded from the acquisitions of FMI and Gatan, and other intangible assets acquired at Gatan totaling $3.7 million. The Company believes that internally generated cash flow and the available unused line of credit will be adequate to finance normal operating requirements. However, the rate at which the Company can reduce its debt in the balance of fiscal 1996 and beyond (and reduce the associated interest expense) will be affected by both the financing of any new acquisitions and the receipt, timing and shipments of new orders from Gazprom. The Company continues to cooperate with Gazprom in arranging for financing of its business with the Company to facilitate a more even and predictable flow of future shipments. Gazprom formally applied in the 1996 second quarter for U.S. Export Import Bank guarantee assistance for additional purchases from CCC over the next five years, and following the third quarter's close, the Bank preliminarily approved the application and referred it for Congressional review as required by law. However, availability of this financing still requires the Bank's final commitment and mutually satisfactory documentation. Every aspect of the Company's future business with Gazprom will continue to require the involvement of and cooperation of numerous managers at different authority levels within Gazprom and its affiliates. This business will continue to be subject to unpredictable credit, financing and other business and political risks, and cannot be assured. 11

Part II - Other Information Item 6. Exhibits and Reports on Form 8-K a. Exhibits * 3.1 Amended and Restated Certificate of Incorporation. * 3.2 Amended and Restated By-Laws. * 4.1 Second Amended and Restated Credit Agreement dated May 8, 1996, by and between Roper Industries, Inc. and NationsBank, N.A. (South) as initial lender and agent. ** 4.2 First Modification of Second Amended and Restated Credit Agreement 11(a) Statement re Computation of Per Share Earnings- Primary 11(b) Statement re Computation of Per Share Earnings- Fully- Diluted 27 Financial Data Schedule b. Reports on Form 8-K (i) Report on Form 8-K dated June 5, 1996 and filed June 6, 1996, reporting under Item 2 thereof the Company's May 22, 1996, acquisition of Fluid Metering, Inc., but excluding the report of financial statements under Item 7 thereof, which financial statements were subsequent provided in the Company's Report on Form 8-K/A dated August 1, 1996 and filed August 2, 1996. (ii) Report on Form 8-K dated June 13, 1996 and filed June 14, 1996 reporting under Item 2 thereof the Company's May 31, 1996 acquisition of Gatan International, Inc., but excluding the report of financial statements under Item 7 thereof, which financial statements were subsequently provided in the Company's Report on Form 8-K/A dated and filed August 12, 1996. - ------------------------------------- * Incorporated herein by this reference to Roper Industries, Inc. Report on Form 8-K dated June 5, 1996 and filed June 6, 1996. ** Incorporated herein by reference to Roper Industries, Inc. Report on Form 8- K/A dated August 1, 1996 and filed August 2, 1996. 12

Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Reference source not found. Signature Title Date --------- ----- ---- /s/ Derrick N. Key President and Chief - ---------------------- Executive Officer September 11, 1996 Derrick N. Key ------------------- /s/ Martin S. Headley Vice President and - ---------------------- Chief Financial Officer September 11, 1996 Martin S. Headley ------------------ 13

EXHIBIT INDEX TO REPORT ON FORM 10-Q Number Exhibit - ------ ------- 3.1 Amended and Restated Certificate of Incorporation, included as Exhibit 3.1 in the June 5, 1996 Roper Industries, Inc. Report on Form 8-K filed June 6, 1996, and incorporated herein by this reference. 3.2 Amended and Restated By-Laws, included as Exhibit 3.2 in the June 5, 1996 Roper Industries, Inc. Report on Form 8-K filed June 6, 1996, and incorporated herein by this reference. 4.1 Second Amended and Restated Credit Agreement dated May 8, 1996, by and between Roper industries, Inc. and NationsBank, N.A. (South) as initial lender and as agent, included as Exhibit 4 in the June 5, 1996 Roper Industries, Inc. Report on Form 8-K filed June 6, 1996, and incorporated herein by this reference. 4.2 First Modification of Second Amended and Restated Credit Agreement, included as Exhibit 4.2 in the August 1, 1996 Roper Industries, Inc. Report on Form 8-K/A filed on August 2, 1996, and incorporated herein by this reference. 11(a) Statement re Computation of Per Share Earnings - Primary 11(b) Statement re Computation of Per Share Earnings - Fully - Diluted 27 Financial Data Schedule a

Roper Industries, Inc. and Subsidiaries Exhibit 11(a) Statement re: Computation of Primary Earnings Per Share (In thousands, except per share data) Three Months Ended Nine Months Ended July 31, July 31, 1996 1995 1996 1995 ------------------------ ------------------------ Net earnings $ 6,989 $ 6,668 $ 21,451 $ 14,120 ------------------------ ------------------------ Common and common equivalent shares used to compute earnings per share: Weighted average number of common shares outstanding 15,106,296 14,907,950 15,022,748 14,859,547 Common stock equivalents-stock options (a) 415,731 290,095 394,693 238,433 ------------------------ ------------------------ Weighted average common and common equivalent shares outstanding 15,522,027 15,198,045 15,417,441 15,097,980 ------------------------ ------------------------ Net earnings per common share $ 0.45 $ 0.44 $ 1.39 $ 0.94 ------------------------ ------------------------ (a) Employee stock options outstanding are included in the calculation of primary earnings per share by applying the "Treasury Stock" method. Such calculations are made using the average daily market prices for the period. b

Roper Industries, Inc. and Subsidiaries Exhibit 11(b) Statement re: Computation of Fully-Diluted Earnings Per Share (In thousands, except per share data) Three Months Ended Nine Months Ended July 31, July 31, 1996 1995 1996 1995 ------------------------ ------------------------ Net earnings $ 6,989 $ 6,668 $ 21,451 $ 14,120 ======================== ======================== Common and common equivalent shares used to compute earnings per share: Weighted average number of common shares outstanding 15,106,296 14,907,950 15,022,748 14,859,547 Common stock equivalents-stock options (a) 415,760 295,700 396,713 294,786 ------------------------ ------------------------ Weighted average common and common equivalent shares outstanding 15,522,056 15,203,650 15,419,461 15,154,333 ======================== ======================== Net earnings per common share $ 0.45 $ 0.44 $ 1.39 $ 0.93 ======================== ======================== (a) Employee stock options outstanding are included in the calculation of fully diluted earnings per share by applying the "Treasury Stock" method. Such calculations are made using the higher of the average daily market prices or the market price at the end of quarter, in order to reflect the maximum potential dilution. c

5 9-MOS OCT-31-1996 NOV-01-1995 JUL-31-1996 569 0 50,256 0 32,945 2,552 51,935 27,518 245,128 28,069 0 0 0 151 131,059 245,128 159,948 160,054 78,760 78,760 0 0 1,778 32,107 10,656 21,451 0 0 0 21,451 1.39 1.39