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
January 31, 2011
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)
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1-12273
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51-0263969
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(COMMISSION FILE NUMBER)
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(IRS EMPLOYER IDENTIFICATION NO.)
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6901 PROFESSIONAL PKWY. EAST, SUITE 200, SARASOTA, FLORIDA
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34240
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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(ZIP CODE)
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(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 January 31, 2011, Roper Industries, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations for the quarter and year ended December 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 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 o
r 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) Shell Company Transactions.
| Not applicable |
(d) Exhibits.
| 99.1 Press Release of the Company dated January 31, 2011. |
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: January 31, 2011 |
EXHIBIT INDEX
| Exhibit No. | Description | |
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| 99.1 | Press Release of the Company dated January 31, 2011 |
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Contact Information:
Investor Relations
941-556-2601
investor-relations@roperind.com
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 Roper Industries, Inc.
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Roper Industries Announces Record Fourth Quarter and Full Year Results
Fourth Quarter Net Earnings Increase 49%
Fourth Quarter Sales and Orders Increase 23%
Full Year Operating Cash Flow of $500M
Sarasota, Florida, January 31, 2011 ... Roper Industries, Inc. (NYSE: ROP) reported financial results for the fourth quarter and full year ended December 31, 2010.
Fourth Quarter 2010
Net earnings for the fourth quarter were $107 million, or $1.10 per diluted share. Sales in the fourth quarter were $679 million, a 23% increase over the same period in 2009. Operating income was $166 million, representing 24.5% of sales, an increase of 270 basis points over the prior year. Operating cash flow was $155 million and represented 23% of sales.
EBITDA reached $200 million and EBITDA margin expanded to 29.4% of sales, 280 basis points over the prior year. “Our businesses performed exceptionally well in the fourth quarter, with 15% organic growth, a book-to-bill ratio of 1.02 and record margin performance,” said Brian Jellison, Roper’s Chairman, President and CEO.
Full Year 2010
Net earnings for 2010 were $323 million, a 35% increase over 2009. Sales for the year were $2.4 billion, up 16% over the prior year. Gross margin expanded 250 basis points to 53.4%. Operating income was $514 million and operating margin increased 230 basis points to 21.6%. EBITDA grew to $638 million, representing 26.7% of sales.
“Roper achieved record performance in 2010 with the highest sales, orders, net earnings, EBITDA and cash flow in our history,” said Mr. Jellison. “Our record performance reflects our strategy of growing high margin, asset light businesses with exceptional cash conversion characteristics. Our focus on working capital management, combined with outstanding execution by our operating people, led to record operating cash flow of $500 million, representing 155% of net earnings.”
2011 Outlook and Guidance
Roper expects 2011 full year diluted earnings per share (DEPS) to be between $3.82 and $4.02 with operating cash flow in excess of $550 million. First quarter DEPS are expected to be between $0.83 and $0.87. The Company’s guidance excludes future acquisitions.
“We enter 2011 with a record backlog of $785 million, and improving end markets with businesses well positioned to continue their growth in 2011,” Mr. Jellison added.
Table 1: Sales Growth
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Q4 2010
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Organic Growth
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15%
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Acquisitions / Divestitures
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9%
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Foreign Currency
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(1%)
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Total Sales Growth
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23%
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Table 2: EBITDA and EBITDA Margins
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Q4 2010
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FY 2010
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|||
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Net Earnings
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$107.3
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$322.6
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Add: Interest Expense
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16.9
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66.5
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Add: Income Taxes
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41.1
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125.8
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Add: Depreciation & Amortization
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34.3
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123.0
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Rounding
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0.1
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-
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EBITDA (A)
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$199.7
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$637.9
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Revenue (B)
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$679.5
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$2,386.1
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EBITDA Margin (A)/(B)
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29.4%
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26.7%
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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, January 31, 2011. The call can be accessed via webcast or by dialing +1 888-300-2324 (US/Canada) or +1 719-325-2426, using confirmation code 4697732. 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 4697732.
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)
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December 31,
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December 31,
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|||||||
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ASSETS
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2010
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2009
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||||||
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CURRENT ASSETS:
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||||||||
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Cash and cash equivalents
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$ | 270,394 | $ | 167,708 | ||||
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Accounts receivable
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403,337 | 381,658 | ||||||
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Inventories
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178,559 | 178,795 | ||||||
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Deferred taxes
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32,894 | 27,306 | ||||||
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Unbilled receivable
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75,620 | 57,153 | ||||||
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Other current assets
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37,287 | 58,125 | ||||||
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Total current assets
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998,091 | 870,745 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, NET
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103,487 | 109,493 | ||||||
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OTHER ASSETS:
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||||||||
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Goodwill
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2,727,780 | 2,388,432 | ||||||
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Other intangible assets, net
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1,104,513 | 868,900 | ||||||
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Deferred taxes
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57,850 | 33,123 | ||||||
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Other assets
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77,803 | 57,043 | ||||||
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Total other assets
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3,967,946 | 3,347,498 | ||||||
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TOTAL ASSETS
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$ | 5,069,524 | $ | 4,327,736 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
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||||||||
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Accounts payable
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$ | 137,778 | $ | 110,103 | ||||
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Accrued liabilities
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298,080 | 253,441 | ||||||
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Income taxes payable
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- | - | ||||||
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Deferred taxes
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10,445 | 1,671 | ||||||
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Current portion of long-term debt
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93,342 | 112,796 | ||||||
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Total current liabilities
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539,645 | 478,011 | ||||||
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NONCURRENT LIABILITIES:
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||||||||
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Long-term debt
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1,247,703 | 1,040,962 | ||||||
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Deferred taxes
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465,001 | 328,299 | ||||||
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Other liabilities
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66,268 | 58,974 | ||||||
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Total liabilities
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2,318,617 | 1,906,246 | ||||||
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STOCKHOLDERS' EQUITY:
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||||||||
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Common stock
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971 | 958 | ||||||
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Additional paid-in capital
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1,045,286 | 982,321 | ||||||
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Retained earnings
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1,680,849 | 1,395,586 | ||||||
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Accumulated other comprehensive earnings
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43,978 | 63,945 | ||||||
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Treasury stock
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(20,177 | ) | (21,320 | ) | ||||
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Total stockholders' equity
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2,750,907 | 2,421,490 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 5,069,524 | $ | 4,327,736 | ||||
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)
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Three months ended
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Twelve months ended
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|||||||||||||||
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December 31,
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December 31,
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|||||||||||||||
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2010
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2009
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2010
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2009
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Net sales
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$ | 679,479 | $ | 553,638 | $ | 2,386,112 | $ | 2,049,668 | ||||||||
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Cost of sales
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307,614 | 262,226 | 1,110,986 | 1,006,530 | ||||||||||||
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Gross profit
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371,865 | 291,412 | 1,275,126 | 1,043,138 | ||||||||||||
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Selling, general and administrative expenses
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205,707 | 170,644 | 760,832 | 647,742 | ||||||||||||
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Income from operations
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166,158 | 120,768 | 514,294 | 395,396 | ||||||||||||
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Interest expense
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16,925 | 16,836 | 66,533 | 58,544 | ||||||||||||
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Other income (expense)
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(788 | ) | (1 | ) | 633 | 2,916 | ||||||||||
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Earnings from continuing operations before
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||||||||||||||||
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income taxes
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148,445 | 103,931 | 448,394 | 339,768 | ||||||||||||
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Income taxes
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41,134 | 32,007 | 125,814 | 100,287 | ||||||||||||
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Net Earnings
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$ | 107,311 | $ | 71,924 | $ | 322,580 | $ | 239,481 | ||||||||
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Earnings per share:
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||||||||||||||||
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Basic
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$ | 1.13 | $ | 0.79 | $ | 3.42 | $ | 2.64 | ||||||||
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Diluted
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$ | 1.10 | $ | 0.77 | $ | 3.34 | $ | 2.58 | ||||||||
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Weighted average common and common
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||||||||||||||||
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equivalent shares outstanding:
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||||||||||||||||
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Basic
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94,823 | 91,156 | 94,242 | 90,685 | ||||||||||||
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Diluted
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97,517 | 93,370 | 96,653 | 92,820 | ||||||||||||
Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
|
Three months ended December 31,
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Twelve months ended December 31,
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|||||||||||||||||||||||||||||||
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2010
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2009
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2010
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2009
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|||||||||||||||||||||||||||||
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Amount
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%
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Amount
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%
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Amount
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%
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Amount
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%
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|||||||||||||||||||||||||
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Net sales:
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||||||||||||||||||||||||||||||||
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Industrial Technology
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$ | 165,557 | $ | 138,489 | $ | 607,564 | $ | 536,219 | ||||||||||||||||||||||||
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Energy Systems & Controls
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155,374 | 125,922 | 503,897 | 440,919 | ||||||||||||||||||||||||||||
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Scientific & Industrial Imaging
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155,526 | 115,862 | 548,718 | 354,776 | ||||||||||||||||||||||||||||
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RF Technology
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203,022 | 173,365 | 725,933 | 717,754 | ||||||||||||||||||||||||||||
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Total
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$ | 679,479 | $ | 553,638 | $ | 2,386,112 | $ | 2,049,668 | ||||||||||||||||||||||||
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Gross profit:
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Industrial Technology
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$ | 85,854 | 51.9 | % | $ | 64,892 | 46.9 | % | $ | 309,679 | 51.0 | % | $ | 255,393 | 47.6 | % | ||||||||||||||||
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Energy Systems & Controls
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86,622 | 55.8 | % | 69,794 | 55.4 | % | 270,506 | 53.7 | % | 233,917 | 53.1 | % | ||||||||||||||||||||
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Scientific & Industrial Imaging
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97,698 | 62.8 | % | 67,926 | 58.6 | % | 336,125 | 61.3 | % | 200,311 | 56.5 | % | ||||||||||||||||||||
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RF Technology
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101,691 | 50.1 | % | 88,800 | 51.2 | % | 358,816 | 49.4 | % | 353,517 | 49.3 | % | ||||||||||||||||||||
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Total
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$ | 371,865 | 54.7 | % | $ | 291,412 | 52.6 | % | $ | 1,275,126 | 53.4 | % | $ | 1,043,138 | 50.9 | % | ||||||||||||||||
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Operating profit*:
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Industrial Technology
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$ | 46,547 | 28.1 | % | $ | 32,345 | 23.4 | % | $ | 162,009 | 26.7 | % | $ | 123,959 | 23.1 | % | ||||||||||||||||
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Energy Systems & Controls
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43,821 | 28.2 | % | 32,862 | 26.1 | % | 120,427 | 23.9 | % | 92,788 | 21.0 | % | ||||||||||||||||||||
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Scientific & Industrial Imaging
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42,235 | 27.2 | % | 30,883 | 26.7 | % | 130,558 | 23.8 | % | 74,183 | 20.9 | % | ||||||||||||||||||||
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RF Technology
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46,651 | 23.0 | % | 38,706 | 22.3 | % | 150,711 | 20.8 | % | 154,430 | 21.5 | % | ||||||||||||||||||||
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Total
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$ | 179,254 | 26.4 | % | $ | 134,796 | 24.3 | % | $ | 563,705 | 23.6 | % | $ | 445,360 | 21.7 | % | ||||||||||||||||
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Operating profit excluding restructuring*:
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||||||||||||||||||||||||||||||||
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Industrial Technology
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$ | 46,547 | 28.1 | % | $ | 32,394 | 23.4 | % | $ | 162,009 | 26.7 | % | $ | 128,325 | 23.9 | % | ||||||||||||||||
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Energy Systems & Controls
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43,821 | 28.2 | % | 34,557 | 27.4 | % | 120,427 | 23.9 | % | 98,296 | 22.3 | % | ||||||||||||||||||||
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Scientific & Industrial Imaging
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42,235 | 27.2 | % | 31,032 | 26.8 | % | 130,558 | 23.8 | % | 75,829 | 21.4 | % | ||||||||||||||||||||
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RF Technology
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46,651 | 23.0 | % | 38,800 | 22.4 | % | 150,711 | 20.8 | % | 155,342 | 21.6 | % | ||||||||||||||||||||
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Total
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$ | 179,254 | 26.4 | % | $ | 136,783 | 24.7 | % | $ | 563,705 | 23.6 | % | $ | 457,792 | 22.3 | % | ||||||||||||||||
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Net Orders:
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||||||||||||||||||||||||||||||||
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Industrial Technology
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$ | 181,217 | $ | 137,159 | $ | 669,882 | $ | 528,208 | ||||||||||||||||||||||||
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Energy Systems & Controls
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161,377 | 128,452 | 538,861 | 427,003 | ||||||||||||||||||||||||||||
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Scientific & Industrial Imaging
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160,083 | 113,699 | 578,957 | 349,132 | ||||||||||||||||||||||||||||
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RF Technology
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193,109 | 185,415 | 748,536 | 719,666 | ||||||||||||||||||||||||||||
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Total
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$ | 695,786 | $ | 564,725 | $ | 2,536,236 | $ | 2,024,009 | ||||||||||||||||||||||||
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
|
Twelve months ended
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||||||||
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December 31,
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||||||||
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2010
|
2009
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|||||||
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Net earnings
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$ | 322,580 | $ | 239,481 | ||||
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Non-cash items:
|
||||||||
|
Depreciation
|
36,728 | 34,163 | ||||||
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Amortization
|
86,293 | 69,285 | ||||||
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Stock-based compensation expense
|
25,150 | 27,476 | ||||||
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Income taxes
|
10,123 | (6,225 | ) | |||||
|
Changes in assets and liabilities:
|
||||||||
|
Receivables
|
(25,812 | ) | 26,978 | |||||
|
Inventory
|
(5,687 | ) | 31,081 | |||||
|
Accounts payable
|
26,602 | (17,011 | ) | |||||
|
Accrued liabilities
|
25,938 | (41,790 | ) | |||||
|
Other, net
|
(2,375 | ) | 4,061 | |||||
|
Cash provided by operating activities
|
499,540 | 367,499 | ||||||
|
Business acquisitions, net of cash acquired
|
(536,413 | ) | (354,561 | ) | ||||
|
Capital expenditures
|
(28,591 | ) | (25,885 | ) | ||||
|
Other, net
|
1,730 | 6,254 | ||||||
|
Cash used by investing activities
|
(563,274 | ) | (374,192 | ) | ||||
|
Principal debt borrowings
|
- | 500,000 | ||||||
|
Principal debt payments
|
(23,411 | ) | (474,270 | ) | ||||
|
Revolver borrowings (payments), net
|
190,000 | (139,000 | ) | |||||
|
Debt issuance costs
|
- | (4,708 | ) | |||||
|
Dividends
|
(35,706 | ) | (29,823 | ) | ||||
|
Excess tax benefit from share-based payment
|
6,364 | 2,813 | ||||||
|
Proceeds from issuance of common stock
|
- | 121,450 | ||||||
|
Proceeds from exercise of stock options
|
29,047 | 10,506 | ||||||
|
Other, net
|
1,315 | (565 | ) | |||||
|
Cash provided by (used by) financing activities
|
167,609 | (13,597 | ) | |||||
|
Effect of exchange rate changes on cash
|
(1,189 | ) | 9,929 | |||||
|
Net increase (decrease) in cash and equivalents
|
102,686 | (10,361 | ) | |||||
|
Cash and equivalents, beginning of period
|
167,708 | 178,069 | ||||||
|
Cash and equivalents, end of period
|
$ | 270,394 | $ | 167,708 | ||||