SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 28, 2003
ROPER INDUSTRIES, INC.
DELAWARE
| 1-12273 | 51-0263969 | |
| (COMMISSION FILE NUMBER) | (IRS EMPLOYER IDENTIFICATION NO.) | |
| 2160 SATELLITE BLVD., SUITE 200, DULUTH, GEORGIA | 30097 | |
| (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) | (ZIP CODE) | |
(770) 495-5100
160 BEN BURTON ROAD, BOGART, GEORGIA 30622
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
| (a) | Financial Statements of Business Acquired | |
| Not Applicable | ||
| (b) | Pro Forma Financial Statements | |
| Not Applicable | ||
| (c) | Exhibits | |
| 99.1 Press Release of Roper Industries, Inc. (the “Company”) dated May 28, 2003. |
ITEM 9. REGULATION FD DISCLOSURE
The information contained in this Item 9 is being furnished to the Securities and Exchange Commission pursuant to Item 12 of Form 8-K, “Disclosure of Results of Operation and Financial Condition,” as directed in Release No. 34-47583.
On May 28, 2003, the Company issued a press release containing information about the Company’s results of operations for the quarter ended April 30, 2003. A copy of the press release is attached hereto as Exhibit 99.1.
The press release presented non-GAAP financial information that the Company believes is useful because it allows investors to perform meaningful comparisons of the Company’s results for 2002 and 2003.
SIGNATURE
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/ Martin S. Headley | |||||
|
|
|||||
| Martin S. Headley, Vice President, Chief Financial Officer |
Date: May 28, 2003 | ||||
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Press Release of the Company dated May 28, 2003 |
EXHIBIT 99.1 CONTACT INFORMATION: Chris Hix Director of Investor Relations +1 (770) 495-5100 investor-relations@roperind.com FOR IMMEDIATE RELEASE ROPER INDUSTRIES ANNOUNCES SECOND QUARTER 2003 RESULTS, DIVIDEND RECORD SECOND QUARTER CASH FLOW; STRONG SEQUENTIAL IMPROVEMENTS; CONSIDERABLE PROGRESS MADE ON RESTRUCTURING ACTIVITIES DULUTH, GEORGIA, MAY 28, 2003 ... ROPER INDUSTRIES, INC. (NYSE: ROP) announced diluted earnings per share (DEPS) from continuing operations for its second fiscal quarter ended April 30, 2003 of $0.47, and net DEPS (including discontinued operations) of $0.45. This is less than prior year DEPS from continuing operations of $0.54, due largely to $8 million lower net sales to Gazprom, the large Russian natural gas company, and restructuring activities costing over $2 million during the quarter. The Company reported second quarter net sales of $166 million, 10% higher than net sales of $151 million in the second quarter of the previous year. Excluding acquisitions made in 2002, net sales declined 1% (see Table 1 for a list of acquired companies), but increased 5% excluding the Company's net sales to Gazprom (see Table 2 for a reconciliation of net sales). "We were pleased to see the 20% sequential improvement in our net sales from the first quarter," said Mr. Brian Jellison, President and Chief Executive Officer. "At the same time, our business units continue to make substantial progress improving operations and working capital." Roper's second quarter cash flow from operating activities grew 10% from the prior year's quarter to a record $23 million, including substantial improvements in net working capital performance. The Company announced that it has reduced its net debt-to-capital ratio from 46% at the beginning of the year to 42% at quarter end. As previously announced this year, the Company launched restructuring activities designed to generate as much as $15 million in annualized cost savings. Mr. Jellison commented, "Our new, strengthened segment leadership has accelerated the pace of our restructuring efforts, and we are now expecting to complete all of the planned activity prior to the end of this fiscal year." The Company reported progress on several key initiatives: - Largely completed the integration of its Acton Research and Integrated Design business units. - Made considerable progress on the integration of Qualitek into the Uson business unit, which will be completed in the third quarter. - Began integrating the production operations of its Redlake business unit into other Company facilities, scheduled to be substantially completed in the third quarter. - Opened a new production facility in China. 1
- Announced that the production operations of its Dynamco business unit will be moved into a new operation in Mexico in the third quarter. "These actions will help to lower manufacturing costs and enhance margins," stated Mr. Jellison. "Overall, we anticipate a rapid payback for our restructuring initiatives, with the benefits becoming particularly evident in 2004." The Company earlier received indication of Gazprom's intention to release $36 million of total orders in calendar 2003; however, based on recent information, it does not expect to convert the total amount into net sales in the current fiscal year. The Company now expects fiscal 2003 net sales to Gazprom of $25 to $30 million, or $10 million less than previous expectations. Accordingly, the Company now forecasts DEPS from continuing operations to be in the range of $2.00 to $2.11 for the 2003 fiscal year, compared to previous expectations of $2.11 to $2.26. DEPS from continuing operations for the second half of fiscal 2003 is expected to be $1.24 to $1.35, with expected DEPS in the third quarter of $0.50 to $0.55 and exceeding $0.70 in the fourth quarter. Mr. Jellison commented, "Given the decrease in net sales to Gazprom this year of up to $31 million, generally soft market conditions, and full year restructuring investments of at least $6 million, our cash generation and earnings performance remains strong. We see continued earnings improvement throughout fiscal 2003, and this momentum will carry forward throughout fiscal 2004. With the benefits of our restructuring in front of us and a strong acquisition pipeline, we see substantial opportunities ahead." CASH DIVIDEND The Company announced that its Board of Directors approved a cash dividend of $0.0875 per common share payable on July 31, 2003, to shareholders of record on July 17, 2003. RESULTS BY SEGMENT ENERGY SYSTEMS & CONTROLS segment second quarter net sales of $38 million were 27% higher than the prior year period, principally as a result of the 2002 acquisition of Zetec and higher net sales for non-Gazprom oil & gas applications, somewhat offset by a 48% reduction in net sales to Gazprom. Net orders of $40 million in the quarter were 23% higher than the prior year quarter. Operating profit improved 4% to $7 million. INDUSTRIAL TECHNOLOGY segment net sales were $41 million in the second quarter, or 1% higher than in the year-ago period. Quarterly net orders improved 5% to $42 million. Second quarter operating profit decreased 11% to $9 million primarily as a result of higher European sourcing and production costs due to adverse currency exchange rates and the start-up of a new production facility in China. INSTRUMENTATION segment second quarter net sales increased 2% from the prior year period to $44 million, with the fall-off in net sales at the Company's Logitech business unit more than offset by the 2002 acquisition of Qualitek and favorable currency benefits. Net orders increased 2% with acquisition contributions and currency benefits making up for lower activity in refining, semiconductor and telecom markets. Second quarter 2003 operating profit decreased $3 million compared with the same period last year as a result of $1.9 million of restructuring charges, higher European sourcing and production 2
costs due to currency exchange rate changes, and lower margins from the Qualitek acquisition prior to completing its full integration into Uson. SCIENTIFIC & INDUSTRIAL IMAGING segment second quarter net sales of $44 million were 14% higher than in the year-ago quarter due to the strong backlog for electron microscopy applications, initial shipments of the new motion imaging products and the inclusion of results from 2002 acquisitions. Net orders declined 11% as a result of reduced Japanese government spending, reduced economic activity in Asia relating to the outbreak of severe acute respiratory syndrome, declining industrial camera orders, and the uneven timing of large project orders. Second quarter operating profits declined nearly 6% versus the second quarter of 2002, including the impact of restructuring costs. However, segment performance has nearly doubled compared with the first quarter of 2003, with operating profits increasing $5 million. CONFERENCE CALL TO BE HELD AT 10:00 AM (EDT) TOMORROW The Company will conduct a webcasted conference call at 10:00 AM EDT on Thursday, May 29, 2003. To access the webcast, and to obtain copies of the slides, please visit the Investor Information section of the Company's web site at www.roperind.com. Telephonic replays of the conference call will be available for two weeks by calling +1 (402) 220-3007 and using the passcode 1323. Table 1: Acquisitions Qualitek, Instrumentation Segment, July 2002 Zetec, Energy Systems & Controls Segment, August 2002 QImaging, Scientific & Industrial Imaging Segment, August 2002 Duncan Technologies, Scientific & Industrial Imaging Segment, August 2002 Definitive Imaging, Scientific & Industrial Imaging Segment, September 2002 Table 2: Reconciliation of Net Sales (Millions) Q2 2003 Q2 2002 ------- ------- Net sales excluding 2002 acquisitions $141 $134 +5% and excluding net sales to Gazprom Net sales from 2002 acquisitions 16 -- Net sales to Gazprom 9 17 -48% Net sales as reported $166 $151 +10% Additional information about Roper Industries, including a glossary for terms used by the Company, and registration for Company press releases via email, are also available on the Company's website. Roper Industries is a diversified provider of engineered products and solutions for global niche markets. # # # The information provided in this news release, in Company filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended October 31, 2002, and in other press releases and public disclosures, contain forward looking statements within the meaning of the federal securities laws, including statements regarding our expected business outlook and strategies. These statements reflect management's current beliefs, but are not guarantees of performance. They involve risks and uncertainties, which could cause actual results to differ materially 3
from those contained in any forward looking statement. Such risks and uncertainties include reductions in our business with Gazprom; unfavorable changes in foreign exchange rates; difficulties associated with exports, risks associated with our international operations, difficulty making acquisitions and successfully integrating acquired business, 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. Other important risk factors are discussed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2002, and may be discussed in subsequent filings with the SEC. Readers should not place undue reliance on any forward looking statements. These statements speak only as of the date of this document, and we undertake no obligation to update publicly any of them in light of new information or future events. 4
ROPER INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (AMOUNTS IN THOUSANDS) APRIL 30, OCTOBER 31, ASSETS 2003 2002 -------- -------- CURRENT ASSETS: Cash and cash equivalents $ 22,972 $ 12,422 Accounts receivable 130,016 138,290 Inventories 95,488 88,313 Other current assets 4,833 5,224 Assets held for sale 5,574 4,578 -------- -------- Total current assets 258,883 248,827 -------- -------- PROPERTY, PLANT AND EQUIPMENT, NET 50,722 51,089 -------- -------- OTHER ASSETS: Goodwill, net 473,250 459,233 Other intangible assets, net 37,511 37,032 Other assets 35,319 32,792 -------- -------- Total other assets 546,080 529,057 -------- -------- TOTAL ASSETS $855,685 $828,973 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 38,048 $ 35,253 Accrued liabilities 54,869 65,153 Liabilities related to assets held for sale 2,524 1,698 Income taxes payable 11,664 7,618 Current portion of long-term debt 10,866 20,515 -------- -------- Total current liabilities 117,971 130,237 NONCURRENT LIABILITIES: Long-term debt 313,911 311,590 Other liabilities 12,734 11,134 -------- -------- Total liabilities 444,616 452,961 -------- -------- STOCKHOLDERS' EQUITY: Common stock 327 326 Additional paid-in capital 90,757 89,153 Retained earnings 321,614 304,995 Accumulated other comprehensive earnings 22,664 5,940 Treasury stock (24,293) (24,402) -------- -------- Total stockholders' equity 411,069 376,012 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $855,685 $828,973 ======== ========
ROPER INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED SIX MONTHS ENDED APRIL 30, APRIL 30, ----------------------- -------------------------- 2003 2002 2003 2002 ----------------------- -------------------------- Net sales $ 165,527 $150,827 $ 303,838 $ 297,344 Cost of sales 79,517 68,811 146,405 136,781 --------- -------- --------- --------- Gross profit 86,010 82,016 157,433 160,563 Selling, general and administrative expenses 60,156 51,780 115,710 105,387 --------- -------- --------- --------- Income from operations 25,854 30,236 41,723 55,176 Interest expense 4,420 4,588 8,876 9,219 Other income/(expense) (416) 581 155 2,544 --------- -------- --------- --------- Earnings from continuing operations before income taxes and change in accounting principle 21,018 26,229 33,002 48,501 Income taxes 6,272 8,916 9,898 16,491 --------- -------- --------- --------- Earnings from continuing operations before change in accounting principle 14,746 17,313 23,104 32,010 (Loss)/income from discontinued operations, net of tax (616) 143 (985) (44) --------- -------- --------- --------- Earnings before change in accounting principle 14,130 17,456 22,119 31,966 Goodwill impairment, net of taxes of $11,130 25,970 --------- -------- --------- --------- Net earnings $ 14,130 $ 17,456 $ 22,119 $ 5,996 ========= ======== ========= ========= Earnings per share: Basic: Earnings from continuing operations before change in accounting principle $ 0.47 $ 0.55 $ 0.74 $ 1.03 (Loss)/income from discontinued operations $ (0.02) $ 0.00 $ (0.03) $ (0.00) Goodwill adjustment effective November 1, 2001 $ (0.84) --------- -------- --------- --------- Net Earnings $ 0.45 $ 0.56 $ 0.70 $ 0.19 ========= ======== ========= ========= Diluted: Earnings from continuing operations before change in accounting principle $ 0.47 $ 0.54 $ 0.73 $ 1.00 (Loss)/income from discontinued operations $ (0.02) $ 0.00 $ (0.03) $ (0.00) Goodwill adjustment effective November 1, 2001 $ (0.81) --------- -------- --------- --------- Net Earnings $ 0.45 $ 0.55 $ 0.70 $ 0.19 ========= ======== ========= ========= Weighted average common and common equivalent shares outstanding: Basic 31,428 31,213 31,395 31,098 Diluted 31,687 31,991 31,748 31,907 ========= ======== ========= =========
ROPER INDUSTRIES, INC. AND SUBSIDIARIES SELECTED SEGMENT FINANCIAL DATA (UNAUDITED) (AMOUNTS IN THOUSANDS AND PERCENTS OF NET SALES) THREE MONTHS ENDED APRIL 30, SIX MONTHS ENDED APRIL 30, ------------------------------------------- -------------------------------------- 2003 2002 2003 2002 --------------------- ------------------- ------------------ ----------------- AMOUNT % AMOUNT % AMOUNT % AMOUNT % --------------------- -------------------- ------------------ ----------------- NET SALES: Instrumentation $ 43,581 $ 42,596 $ 86,919 $ 88,105 Industrial Technology 40,588 40,223 77,124 76,940 Energy Systems & Controls 37,660 29,705 62,661 56,441 Scientific & Industrial Imaging 43,698 38,303 77,134 75,858 -------- ---------- -------- -------- Total $165,527 $ 150,827 $303,838 $297,344 ======== ========== ======== ======== GROSS PROFIT: Instrumentation $ 25,037 57.4 $ 24,744 58.1 $ 50,205 57.8 $ 52,357 59.4 Industrial Technology 18,649 45.9 18,835 46.8 35,049 45.4 35,128 45.7 Energy Systems & Controls 19,773 52.5 17,934 60.4 32,209 51.4 33,368 59.1 Scientific & Industrial Imaging 22,551 51.6 20,503 53.5 39,970 51.8 39,710 52.3 -------- ---- ---------- ---- -------- ---- -------- ---- Total $ 86,010 52.0 $ 82,016 54.4 $157,433 51.8 $160,563 54.0 ======== ==== ========== ==== ======== ==== ======== ==== OPERATING PROFIT*: Instrumentation $ 5,598 12.8 $ 8,579 20.1 $ 13,197 15.2 $ 17,963 20.4 Industrial Technology 8,580 21.1 9,644 24.0 15,525 20.1 16,478 21.4 Energy Systems & Controls 7,257 19.3 7,000 23.6 8,540 13.6 12,658 22.4 Scientific & Industrial Imaging 7,662 17.5 8,121 21.2 10,593 13.7 14,621 19.3 -------- ---- ---------- ---- -------- ---- -------- ---- Total $ 29,097 17.6 $ 33,344 22.1 $ 47,855 15.8 $ 61,720 20.8 ======== ==== ========== ==== ======== ==== ======== ==== BOOKINGS: Instrumentation $ 42,004 $ 41,205 $ 84,848 $ 82,681 Industrial Technology 41,749 39,914 81,334 82,724 Energy Systems & Controls 40,156 32,764 63,124 59,200 Scientific & Industrial Imaging 32,709 36,695 76,724 75,858 -------- ---------- -------- -------- Total $156,618 $ 150,578 $306,030 $300,463 ======== ========== ======== ======== * Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $3,243 and $3,108 for the three months ended April 30, 2003 and 2002, respectively, and $6,132 and $6,544 for the six months ended April 30, 2003 and 2002, respectively.
ROPER INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Amounts in thousands) SIX MONTHS ENDED APRIL 30, --------------------------- 2003 2002 --------------------------- Net earnings $ 22,119 $ 5,996 Depreciation 5,811 5,661 Amortization 2,177 1,901 Goodwill transitional impairment, net of tax -- 25,970 Other, net (40) (6,935) -------- -------- Cash provided by operating activities 30,067 32,593 Business acquisitions, net of cash acquired -- (7,892) Capital expenditures (4,092) (3,881) Other, net (1,277) 432 -------- -------- Cash used by investing activities (5,369) (11,341) Debt borrowings (payments), net (11,986) (21,780) Dividends (5,500) (5,146) Other, net 1,606 6,962 -------- -------- Cash used by financing activities (15,880) (19,964) Effect of exchange rate changes on cash 1,732 (290) -------- -------- Net increase in cash and equivalents 10,550 998 Cash and equivalents, beginning of period 12,422 16,419 -------- -------- Cash and equivalents, end of period 22,972 17,417 ======== ========