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
July 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 July 26, 2010, Roper Industries, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations for the quarter ended June 30, 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 op
erating 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 July 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: July 26, 2010 |
EXHIBIT INDEX
| Exhibit No. | Description | |
|
|
|
|
| 99.1 | Press Release of the Company dated July 26, 2010 |
Exhibit 99.1
|
Contact Information:
Investor Relations
941-556-2601
investor-relations@roperind.com
|
 Roper Industries, Inc.
|
Roper Industries Announces 2010 Second Quarter Results
Orders Increase 27% to Record $619 Million
Net Earnings Increase 20% to $71 Million
Full Year Cash Flow and DEPS Guidance Increased
Sarasota, Florida, July 26, 2010 ... Roper Industries, Inc. (NYSE: ROP) reported financial results for its second quarter ended June 30, 2010.
Net earnings for the second quarter were $71 million, a 20% increase over the second quarter of 2009, and diluted earnings per share (DEPS) were $0.74 compared to $0.64 in the prior year second quarter. Results for the quarter include a $1.9M pre-tax loss due to foreign exchange remeasurement. Sales increased 12% to $567 million and orders increased 27% to a record $619 million, representing a 1.09 book-to-bill ratio. Operating Cash Flow was $110 million, bringing year-to-date operating cash flow to a record $205 million.
Second quarter gross margin expanded to 53.2% and operating margin was 21.0%, an increase of 200 basis points over the prior year. During the quarter, EBITDA grew to $145 million, or 25.7% of sales. Free cash flow represented 18% of sales and 144% of net earnings.
“We are encouraged by the outstanding order growth in our businesses, driven by an 82% increase in Scientific Imaging/Medical, a 32% increase in Energy Systems & Controls and a 31% increase in Industrial Technology,” said Brian Jellison, Roper’s Chairman, President and CEO. “We were delighted to see organic sales growth return in the second quarter and, with record backlog, we now expect stronger organic sales growth in the second half.”
Today, Roper announced the acquisition of iTradeNetwork, Inc. in a $525 million all-cash transaction. iTradeNetwork provides subscription-based hosted software solutions to the food industry that facilitate transactions between retail grocers, restaurant chain operators, foodservice distributors and their respective customers. The Company’s SaaS (Software-as-a-Service) solutions serve over 6,200 customers transacting over $250 billion annually. Roper expects iTradeNetwork to generate more than $55 million of EBITDA in 2011.
“iTradeNetwork is an excellent addition to our growing SaaS businesses, complementing the outstanding software services platforms we have built with our CBORD/Horizon and Freight Matching businesses,” said Mr. Jellison. “We are excited about the prospects for the year given our record backlog, strong order momentum during the first half, and the strategic acquisition of iTradeNetwork,” continued Mr. Jellison.”
Third Quarter and Full Year Guidance
Roper is increasing its full year DEPS guidance to $3.05-$3.15 from $2.95-$3.10, and establishing third quarter DEPS guidance of $0.75-$0.80. The Company is increasing its guidance for operating cash flow to $425-$450 million from $400-$425 million. The Company’s guidance includes iTradeNetwork but excludes future acquisitions and the first quarter impact of acquisition-related inventory charges.
Table 1:
|
Q2
Sales Growth |
Q2
Orders Growth |
||
|
Total Growth
|
12.3%
|
26.7%
|
|
|
Organic Growth
|
5.1%
|
18.3%
|
|
|
Acquisitions / Divestitures
|
7.2%
|
8.2%
|
|
|
Foreign Currency
|
0.0%
|
0.2%
|
|
Table 2: Free Cash Flow (millions)
|
Q2 2010
|
|
|
Sales (A)
|
567.1
|
|
Net Earnings (B)
|
71.3
|
|
Operating Cash Flow
|
$110.3
|
|
Less: Capital Expenditures
|
(7.6)
|
|
Rounding
|
(0.1)
|
|
Free Cash Flow (C)
|
$102.6
|
|
Free Cash Flow as % of Net Earnings (C)/(B)
|
144%
|
|
Free Cash Flow as % of Q2 Revenue (C)/(A)
|
18%
|
Table 3: EBITDA (millions)
|
Q2 2010
|
|
|
Net Earnings
|
$71.3
|
|
Add: Interest Expense
|
16.3
|
|
Add: Income Taxes
|
30.0
|
|
Add: Depreciation and Amortization
|
27.9
|
|
EBITDA
|
$145.5
|
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, July 26, 2010. The call can be accessed via webcast or by dialing +1 888-282-4591 (US/Canada) or +1 719-457-2665, using confirmation code 2045224. 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 2045224.
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. I
mportant 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)
|
June 30,
|
December 31,
|
|||||||
|
ASSETS
|
2010
|
2009
|
||||||
|
CURRENT ASSETS:
|
||||||||
|
Cash and cash equivalents
|
$ | 290,740 | $ | 167,708 | ||||
|
Accounts receivable
|
347,681 | 381,658 | ||||||
|
Inventories
|
170,943 | 178,795 | ||||||
|
Deferred taxes
|
26,884 | 27,306 | ||||||
|
Unbilled receivable
|
80,327 | 57,153 | ||||||
|
Other current assets
|
68,893 | 58,125 | ||||||
|
Total current assets
|
985,468 | 870,745 | ||||||
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
104,505 | 109,493 | ||||||
|
|
||||||||
|
OTHER ASSETS:
|
||||||||
|
Goodwill
|
2,365,297 | 2,388,432 | ||||||
|
Other intangible assets, net
|
833,594 | 868,900 | ||||||
|
Deferred taxes
|
29,848 | 33,123 | ||||||
|
Other assets
|
68,615 | 57,043 | ||||||
|
Total other assets
|
3,297,354 | 3,347,498 | ||||||
|
TOTAL ASSETS
|
$ | 4,387,327 | $ | 4,327,736 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Accounts payable
|
$ | 120,313 | $ | 110,103 | ||||
|
Accrued liabilities
|
240,393 | 253,441 | ||||||
|
Income taxes payable
|
- | - | ||||||
|
Deferred taxes
|
1,446 | 1,671 | ||||||
|
Current portion of long-term debt
|
112,028 | 112,796 | ||||||
|
Total current liabilities
|
474,180 | 478,011 | ||||||
|
NONCURRENT LIABILITIES:
|
||||||||
|
Long-term debt
|
1,016,400 | 1,040,962 | ||||||
|
Deferred taxes
|
328,578 | 328,299 | ||||||
|
Other liabilities
|
60,692 | 58,974 | ||||||
|
Total liabilities
|
1,879,850 | 1,906,246 | ||||||
|
STOCKHOLDERS' EQUITY:
|
||||||||
|
Common stock
|
963 | 958 | ||||||
|
Additional paid-in capital
|
1,003,289 | 982,321 | ||||||
|
Retained earnings
|
1,508,724 | 1,395,586 | ||||||
|
Accumulated other comprehensive earnings
|
15,677 | 63,945 | ||||||
|
Treasury stock
|
(21,176 | ) | (21,320 | ) | ||||
|
Total stockholders' equity
|
2,507,477 | 2,421,490 | ||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 4,387,327 | $ | 4,327,736 | ||||
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)
|
Three months ended
|
Six months ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Net sales
|
$ | 567,104 | $ | 504,910 | $ | 1,101,545 | $ | 1,010,354 | ||||||||
|
Cost of sales
|
265,157 | 249,840 | 520,033 | 504,148 | ||||||||||||
|
Gross profit
|
301,947 | 255,070 | 581,512 | 506,206 | ||||||||||||
|
Selling, general and administrative expenses
|
182,760 | 159,106 | 361,609 | 323,450 | ||||||||||||
|
Income from operations
|
119,187 | 95,964 | 219,903 | 182,756 | ||||||||||||
|
Interest expense
|
16,293 | 13,762 | 32,474 | 27,271 | ||||||||||||
|
Other income/(expense)
|
(1,657 | ) | 3,168 | (1,210 | ) | 2,812 | ||||||||||
|
Earnings from continuing operations before
|
||||||||||||||||
|
income taxes
|
101,237 | 85,370 | 186,219 | 158,297 | ||||||||||||
|
Income taxes
|
29,956 | 25,782 | 55,213 | 47,150 | ||||||||||||
|
Net Earnings
|
$ | 71,281 | $ | 59,588 | $ | 131,006 | $ | 111,147 | ||||||||
|
Earnings per share:
|
||||||||||||||||
|
Basic
|
$ | 0.76 | $ | 0.66 | $ | 1.40 | $ | 1.23 | ||||||||
|
Diluted
|
$ | 0.74 | $ | 0.64 | $ | 1.36 | $ | 1.20 | ||||||||
|
Weighted average common and common
|
||||||||||||||||
|
equivalent shares outstanding:
|
||||||||||||||||
|
Basic
|
94,011 | 90,562 | 93,911 | 90,348 | ||||||||||||
|
Diluted
|
96,449 | 92,712 | 96,235 | 92,508 | ||||||||||||
Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||
|
Net sales:
|
||||||||||||||||||||||||||||||||
|
Industrial Technology
|
$ | 145,490 | $ | 136,551 | $ | 280,802 | $ | 267,192 | ||||||||||||||||||||||||
|
Energy Systems & Controls
|
119,387 | 105,398 | 225,065 | 212,009 | ||||||||||||||||||||||||||||
|
Scientific & Industrial Imaging
|
128,514 | 75,860 | 258,758 | 159,980 | ||||||||||||||||||||||||||||
|
RF Technology
|
173,713 | 187,101 | 336,920 | 371,173 | ||||||||||||||||||||||||||||
|
Total
|
$ | 567,104 | $ | 504,910 | $ | 1,101,545 | $ | 1,010,354 | ||||||||||||||||||||||||
|
Gross profit:
|
||||||||||||||||||||||||||||||||
|
Industrial Technology
|
$ | 73,930 | 50.8 | % | $ | 65,732 | 48.1 | % | $ | 141,442 | 50.4 | % | $ | 128,441 | 48.1 | % | ||||||||||||||||
|
Energy Systems & Controls
|
64,803 | 54.3 | % | 56,296 | 53.4 | % | 118,294 | 52.6 | % | 111,659 | 52.7 | % | ||||||||||||||||||||
|
Scientific & Industrial Imaging
|
78,307 | 60.9 | % | 42,466 | 56.0 | % | 155,817 | 60.2 | % | 88,216 | 55.1 | % | ||||||||||||||||||||
|
RF Technology
|
84,907 | 48.9 | % | 90,576 | 48.4 | % | 165,959 | 49.3 | % | 177,890 | 47.9 | % | ||||||||||||||||||||
|
Total
|
$ | 301,947 | 53.2 | % | $ | 255,070 | 50.5 | % | $ | 581,512 | 52.8 | % | $ | 506,206 | 50.1 | % | ||||||||||||||||
|
Operating profit*:
|
||||||||||||||||||||||||||||||||
|
Industrial Technology
|
$ | 38,742 | 26.6 | % | $ | 32,484 | 23.8 | % | $ | 70,508 | 25.1 | % | $ | 61,067 | 22.9 | % | ||||||||||||||||
|
Energy Systems & Controls
|
29,072 | 24.4 | % | 23,193 | 22.0 | % | 47,995 | 21.3 | % | 40,712 | 19.2 | % | ||||||||||||||||||||
|
Scientific & Industrial Imaging
|
27,796 | 21.6 | % | 12,401 | 16.3 | % | 57,130 | 22.1 | % | 28,482 | 17.8 | % | ||||||||||||||||||||
|
RF Technology
|
34,704 | 20.0 | % | 39,423 | 21.1 | % | 66,905 | 19.9 | % | 76,806 | 20.7 | % | ||||||||||||||||||||
|
Total
|
$ | 130,314 | 23.0 | % | $ | 107,501 | 21.3 | % | $ | 242,538 | 22.0 | % | $ | 207,067 | 20.5 | % | ||||||||||||||||
|
Operating profit excluding restructuring*:
|
||||||||||||||||||||||||||||||||
|
Industrial Technology
|
$ | 38,742 | 26.6 | % | $ | 34,060 | 24.9 | % | $ | 70,508 | 25.1 | % | $ | 64,437 | 24.1 | % | ||||||||||||||||
|
Energy Systems & Controls
|
29,072 | 24.4 | % | 24,325 | 23.1 | % | 47,995 | 21.3 | % | 43,236 | 20.4 | % | ||||||||||||||||||||
|
Scientific & Industrial Imaging
|
27,796 | 21.6 | % | 12,968 | 17.1 | % | 57,130 | 22.1 | % | 29,602 | 18.5 | % | ||||||||||||||||||||
|
RF Technology
|
34,704 | 20.0 | % | 40,084 | 21.4 | % | 66,905 | 19.9 | % | 77,566 | 20.9 | % | ||||||||||||||||||||
|
Total
|
$ | 130,314 | 23.0 | % | $ | 111,437 | 22.1 | % | $ | 242,538 | 22.0 | % | $ | 214,841 | 21.3 | % | ||||||||||||||||
|
Net Orders:
|
||||||||||||||||||||||||||||||||
|
Industrial Technology
|
$ | 164,685 | $ | 125,880 | $ | 318,778 | $ | 265,273 | ||||||||||||||||||||||||
|
Energy Systems & Controls
|
126,960 | 96,144 | 242,260 | 193,958 | ||||||||||||||||||||||||||||
|
Scientific & Industrial Imaging
|
135,265 | 74,505 | 266,375 | 151,104 | ||||||||||||||||||||||||||||
|
RF Technology
|
192,419 | 192,225 | 359,162 | 350,008 | ||||||||||||||||||||||||||||
|
Total
|
$ | 619,329 | $ | 488,754 | $ | 1,186,575 | $ | 960,343 | ||||||||||||||||||||||||
* Operating profit is before unallocated corporate general and administrative expenses. These expenses were $11,127 and $11,537 for the three months ended June 30, 2010 and 2009, respectively and $22,635 and $24,311 for the six months ended June 30, 2010 and 2009, respectively.
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
|
Six months ended
|
||||||||
|
June 30,
|
||||||||
|
2010
|
2009
|
|||||||
|
Net earnings
|
$ | 131,006 | $ | 111,147 | ||||
|
Non-cash items:
|
||||||||
|
Depreciation
|
18,161 | 17,520 | ||||||
|
Amortization
|
38,289 | 34,308 | ||||||
|
Stock-based compensation expense
|
13,118 | 14,081 | ||||||
|
Income taxes
|
1,910 | (16,102 | ) | |||||
|
Changes in assets and liabilities:
|
||||||||
|
Receivables
|
(5,000 | ) | 48,929 | |||||
|
Inventory
|
(998 | ) | 8,740 | |||||
|
Accounts payable
|
12,856 | (23,568 | ) | |||||
|
Accrued liabilities
|
2,770 | (38,828 | ) | |||||
|
Other, net
|
(6,757 | ) | 4,635 | |||||
|
Cash provided by operating activities
|
205,355 | 160,862 | ||||||
|
Business acquisitions, net of cash acquired
|
(14,651 | ) | (1,248 | ) | ||||
|
Capital expenditures
|
(14,113 | ) | (12,359 | ) | ||||
|
Other, net
|
2,153 | 8,014 | ||||||
|
Cash used by investing activities
|
(26,611 | ) | (5,593 | ) | ||||
|
Principal debt payments
|
(3,013 | ) | (86,104 | ) | ||||
|
Revolver borrowings (payments), net
|
(40,000 | ) | (19,000 | ) | ||||
|
Debt issuance costs
|
- | (404 | ) | |||||
|
Dividends
|
(17,793 | ) | (14,850 | ) | ||||
|
Excess tax benefit from share-based payment
|
2,862 | 423 | ||||||
|
Proceeds from exercise of stock options
|
8,489 | 3,038 | ||||||
|
Other, net
|
890 | (955 | ) | |||||
|
Cash used by financing activities
|
(48,565 | ) | (117,852 | ) | ||||
|
Effect of exchange rate changes on cash
|
(7,147 | ) | 5,340 | |||||
|
Net increase (decrease) in cash and equivalents
|
123,032 | 42,757 | ||||||
|
Cash and equivalents, beginning of period
|
167,708 | 178,069 | ||||||
|
Cash and equivalents, end of period
|
$ | 290,740 | $ | 220,826 | ||||