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UNITED STATES
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

October 28, 2004

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.)
     
2160 SATELLITE BLVD., SUITE 200, DULUTH, GEORGIA   30097
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)   (ZIP CODE)

(770) 495-5100

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

NOT APPLICABLE

(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:

[    ] 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))  

Item 2.02 Results of Operations and Financial Condition.

On October 28, 2004, Roper Industries, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations for the third quarter ended September 30, 2004. A copy of the press release is furnished as Exhibit 99.1.

The Company uses certain non-GAAP financial measures in the press release. A description of these measures and the reasons why the Company believes such measures are useful are set forth below.

In the press release, the Company gives its projections for adjusted diluted earnings per share for fiscal 2004 excluding inventory revaluation costs from the acquisition of Neptune Technology Group Holdings, Inc. (“Neptune”) and the effects from the acquisition of TransCore Holdings, Inc. (“TransCore”) and related financing initiatives. The Company believes it is appropriate add back inventory revaluation costs from the acquisition of Neptune and the effects from the acquisition of TransCore and related financing initiatives to diluted earnings per share because these items are not indicative of the Company’s core operating performance.   In addition, there is uncertainty as to the precise timing of the completion of the TransCore acquisition and related financing initiatives and management is not currently able to estimate the contributions (which are expected to be immaterial) that the ownership of TransCore during the later part of December could have on diluted earnings per share.   Management has used this adjusted measure of diluted earnings per share during fiscal 2004 to assess the Company’s performance and believes it is important for investors to be able to evaluate the Company using the same measures used by management.  The Company also believes that analysts and other investors have used similar measures to value the Company and its performance during 2004.  The Company believes that diluted earnings per share is the most directly comparable GAAP financial measure to adjusted diluted earnings per share excluding inventory revaluation costs from the acquisition of Neptune and the effects from the acquisition of TransCore and related financing initiatives. 

In the press release, the Company also uses the supplemental 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 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.

Item 9.01. Financial Statements and Exhibits.

(a)     Financial Statements of Businesses Acquired.

  Not applicable.

(b)     Pro Forma Financial Information.

  Not applicable.

(c)     Exhibits.

  99.1 Press Release of the Company dated October 28, 2004.

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/ Brian D. Jellison  
     
      Brian D. Jellison,
Chairman of the Board, President and Chief Executive Officer 		  Date: October 28, 2004

 

 

EXHIBIT INDEX

     
Exhibit No.   Description
 
 
99.1   Press Release of the Company dated October 28, 2004

Roper Industries, Inc.

Contact Information:
Chris Hix
Director of Investor Relations
+1 (770) 495-5100
investor-relations@roperind.com

FOR IMMEDIATE RELEASE

Roper Industries Achieves Record Performance in the Third Quarter

Sales Increase 40%; Net Earnings Grow 53%; Cash Flow Expands 68%

Duluth, Georgia, October 28, 2004 .... Roper Industries, Inc. (NYSE: ROP) reported record diluted earnings per share (DEPS) of $0.73 in the third quarter of 2004, as compared with $0.56 reported in the prior year period. Net earnings grew 53% to a record $27 million on record net sales of $240 million, a 40% increase. Net orders increased 53% in the quarter to $248 million.

“Our record results in the third quarter demonstrate our progress in developing our operational and strategic growth capabilities,” said Brian Jellison, Chairman, President and CEO of Roper Industries. “The Neptune business acquired at the end of 2003 continues to perform strongly. We are on pace to achieve our integration plans with the power generation business acquired from RD Tech earlier this year. Our operations posted 11% organic order growth during the third quarter. Margins have strengthened throughout the year, and cash flow performance is very strong.”

Roper reported record EBITDA of $56 million in the third quarter, 61% higher than the prior year, and EBITDA margins of 23.2%, a 320 basis point improvement. The Company converted 130% of third quarter net earnings into cash flow from operating activities, demonstrating its successful focus on cash generation. Net working capital efficiency improved sequentially from the second quarter. The Company reported $36 million of cash flow from operating activities in the third quarter, 68% higher than the prior year quarter, and continues to expect to achieve cash flow from operating activities of $150-$160 million in 2004 with record performance in the fourth quarter.

The Company expects 2004 net sales of $940-$945 million and affirmed its adjusted DEPS guidance of $2.58-$2.70, excluding inventory revaluation costs from the acquisition of Neptune Technology Group Holdings (NTGH) and any effects from the acquisition of TransCore and related financing initiatives.

Mr. Jellison said, “Over the past few years, we have accelerated our successful growth strategy with the acquisition of new growth platforms, such as Neptune and the recently announced agreement to acquire TransCore Holdings. TransCore clearly meets all of our disciplined criteria, with high levels of recurring revenue, multiple growth paths and scale advantages. The acquisition is expected to close in December, and we look forward to the TransCore team joining us.” TransCore provides technologies and related services in areas such as radio frequency identification (RFID), satellite-based communication, mobile asset tracking, security applications and comprehensive toll system and processing services.

Third Quarter Results by Segment

All comparisons are made against the year-ago period unless otherwise stated.

In the Industrial Technology segment, net sales increased 133% to $101 million in the third quarter due primarily to contributions from the Neptune acquisition and organic sales gains. Net orders increased 153%. The segment produced a record $22 million of operating profit during the quarter and an operating margin of 22%.

Third quarter net sales in the Energy Systems & Controls segment improved 3% to $43 million. Excluding sales to Gazprom, third quarter net sales increased 22% due to strong activity with oil & gas and power utility maintenance customers, and contributions from the power generation business of RD Tech acquired in this year’s second quarter. Excluding Gazprom, third quarter net orders increased 73%; the segment reported total net orders increased 27% to $48 million. The segment reported operating profit of $10 million and operating margins of 23%.

Instrumentation segment net sales grew 14% to $51 million in the third quarter, experiencing continued strength in petroleum analysis and materials testing markets. The segment earned $9 million of operating profit, and operating margins held steady at 18%. Net orders increased 22% to $55 million in the third quarter.

The Scientific & Industrial Imaging segment reported a net sales increase of 8% to $46 million, including sales of handheld instruments acquired as part of the NTGH transaction. Net orders increased 11%. The segment posted operating profit of $8 million with an 18% operating margin.

Conference Call to be Held at 10:00 AM (ET) Tomorrow

A conference call to discuss these results has been scheduled for 10:00 AM ET on Friday, October 29, 2004. The call can be accessed via webcast or by dialing (800) 289-0569 (US/Canada) or +1 (913) 981-5542, using confirmation code 880914. Webcast information and conference call materials will be made available in the “Investor Information” 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 passcode 880914.

Table 1: EBITDA (Millions)

Q3 2004
 Q3 2003
Net earnings     $ 27.4   $ 17.9  
Interest expense    7.3    4.0  
Income tax expense    10.7    8.5  
Depreciation & amortization expense    10.2    4.1  
EBITDA   $ 55.6   $ 34.5  

Table 2: Adjusted Diluted Earnings per Share

Full Year 2004 Estimates
Diluted Earnings per Share     $2.54-$2.66    
Add Back: $2.2 Million Pre-Tax Inventory      
   Revaluation Charge from Acquisition of NTGH   $0.04-$0.04  
Adjusted Diluted Earnings per Share   $2.58-$2.70  

About Roper Industries

Roper Industries is a diversified industrial growth company providing engineered products and solutions for global niche markets. Additional information about Roper Industries, including registration to receive press releases via email, is available on the Company’s website, 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 our proposed acquisition of TransCore (the acquisition), the terms of our financing plan, the prospects for TransCore to compete in its market and achieve future growth and profit expectations, and the impact of the acquisition on our future results of operations and cash flows, and 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 performance. They involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward looking statement. Such risks and uncertainties include our ability to complete the acquisition, secure financing on favorable terms and through the facility and issuance currently anticipated, integrate the acquisition and realize expected synergies. We also face other general risks, including further reductions in our business with Gazprom, our ability to realize cost savings from our restructuring initiatives, 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 TransCore’s 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. Important risk factors include those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, and may be discussed in 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.

We refer to certain non-GAAP financial measures in this press release. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found within this press release.

_________________

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(Amounts in thousands)

September 30,
2004
 December 31,
2003
CURRENT ASSETS:            
  Cash and cash equivalents   $ 102,416   $ 70,234  
  Accounts receivable    169,592    150,856  
  Inventories    109,316    107,082  
  Deferred taxes    20,671    33,314  
  Other current assets    9,019    19,706  
    Total current assets    411,014    381,192  
PROPERTY, PLANT AND EQUIPMENT, NET    74,189    78,461  
OTHER ASSETS:  
  Goodwill    739,418    711,158  
  Other intangible assets, net    297,015    298,669  
  Deferred taxes    10,828    6,034  
  Other assets    40,674    39,481  
    Total other assets    1,087,935    1,055,342  
TOTAL ASSETS   $ 1,573,138   $ 1,514,995  
LIABILITIES AND STOCKHOLDERS' EQUITY  
CURRENT LIABILITIES:  
  Accounts payable   $ 46,165   $ 45,412  
  Accrued liabilities    80,012    93,523  
  Deferred taxes    1,640    1,639  
  Current portion of long-term debt    20,951    20,923  
    Total current liabilities    148,768    161,497  
NONCURRENT LIABILITIES:  
  Long-term debt    594,746    630,186  
  Deferred taxes    55,426    50,187  
  Other liabilities    18,692    17,344  
    Total liabilities    817,632    859,214  
STOCKHOLDERS' EQUITY:  
  Common stock    383    372  
  Additional paid-in capital    333,516    293,402  
  Retained earnings    394,908    336,520  
  Accumulated other comprehensive earnings    49,931    48,989  
  Treasury stock    (23,232 )  (23,502 )
    Total stockholders' equity    755,506    655,781
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 1,573,138   $ 1,514,995  

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
 (Amounts in thousands, except per share data)

Three months ended
September 30,
 Nine months ended
September 30,
2004
 2003
 2004
 2003
Net sales     $ 240,141   $ 72,064   $ 693,215   $ 487,562  
Cost of sales    120,570    78,894    348,191    230,504  
Gross profit    119,571    93,170    345,024    257,058  
Selling, general and administrative expenses    74,151    60,649    225,924    178,262  
Income from operations    45,420    32,521    119,100    78,796  
Interest expense    7,327    4,018    21,066    12,653  
Other income/(expense)    (17 )  (239 )  18    (195 )
Earnings from continuing operations before  
   income taxes    38,076    28,264    98,052    65,948  
Income taxes    10,694    8,479    28,986    19,784  
Earnings from continuing operations    27,382    19,785    69,066    46,164  
Loss from discontinued operations, net of tax expense  
    of $631and $151, respectively for 2003    --    (1,912 )  --    (2,822 )
Net Earnings   $ 27,382   $ 17,873   $ 69,066   $ 43,342  
Earnings per share:  
  Basic:  
    Earnings from continuing operations   $ 0.74   $ 0.63   $ 1.87   $ 1.47  
    Loss from discontinued operations   $ --    (0.06 ) $ --    (0.09 )
    Net Earnings   $ 0.74   $ 0.57   $ 1.87   $ 1.38  
  Diluted:  
    Earnings from continuing operations   $ 0.73   $ 0.62   $ 1.84   $ 1.45  
    Loss from discontinued operations   $ --    (0.06 ) $ --    (0.09 )
    Net Earnings   $ 0.73   $ 0.56   $ 1.84   $ 1.36  
Weighted average common and common  
  equivalent shares outstanding:  
    Basic    37,039    31,571    36,870    31,482  
    Diluted    37,673    32,055    37,474    31,844  

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)

Nine months ended
September 30,
2004
 2003
Net earnings     $ 69,066   $ 43,342  
Depreciation    13,437    8,556  
Amortization    16,390    3,550  
Other, net    2,666    2,322  
  Cash provided by operating activities    101,559    57,770  
Business acquisitions, net of cash acquired    (51,861 )  (1,654 )
Capital expenditures    (8,108 )  (8,084 )
Other, net    (3,521 )  (1,969 )
  Cash used by investing activities    (63,490 )  (11,707 )
Debt payments, net    (34,954 )  (45,800 )
Issuance of common stock    28,873    --  
Dividends    (10,678 )  (8,284 )
Other, net    10,876    5,340  
  Cash used by financing activities    (5,883 )  (48,744 )
Effect of exchange rate changes on cash    (4 )  1,921  
Net increase/(decrease) in cash and equivalents    32,182    (760 )
Cash and equivalents, beginning of period    70,234    15,270  
Cash and equivalents, end of period   $ 102,416   $ 14,510  

Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)

Three months ended September 30,
 Nine months ended September 30,
2004
 2003
 2004
 2003
Amount
 %
 Amount
 %
 Amount
 %
 Amount
 %
Net sales:                                    
  Instrumentation   $ 50,751        $ 44,607        $ 149,578        $ 130,445  
  Industrial Technology    100,735         43,213         294,814         126,816  
  Energy Systems & Controls    42,807         41,621         111,145         105,260  
  Scientific & Industrial Imaging    45,848         42,623         137,678         125,041  
    Total   $ 240,141        $ 172,064        $ 693,215        $ 487,562  
Gross profit:  
  Instrumentation   $ 28,049    55.3 % $ 26,316    59.0 % $ 85,809    57.4 % $ 76,223    58.4 %
  Industrial Technology    43,859    43.5 %  19,926    46.1 %  124,371    42.2 %  58,576    46.2 %
  Energy Systems & Controls    21,468    50.2 %  23,053    55.4 %  58,059    52.2 %  55,253    52.5 %
  Scientific & Industrial Imaging    26,195    57.1 %  23,875    56.0 %  76,785    55.8 %  67,006    53.6 %
    Total   $ 119,571    49.8 % $ 93,170    54.1 % $ 345,024    49.8 % $ 257,058    52.7 %
Operating profit*:  
  Instrumentation   $ 9,233    18.2 % $ 8,200    18.4 % $ 27,063    18.1 % $ 21,042    16.1 %
  Industrial Technology    22,451    22.3 %  9,394    21.7 %  59,862    20.3 %  27,586    21.8 %
  Energy Systems & Controls    9,818    22.9 %  10,636    25.6 %  21,467    19.3 %  19,591    18.6 %
  Scientific & Industrial Imaging    8,268    18.0 %  8,097    19.0 %  22,648    16.4 %  20,796    16.6 %
    Total   $ 49,770    20.7 % $ 36,327    21.1 % $ 131,040    18.9 % $ 89,015    18.3 %
Net Orders:  
  Instrumentation   $ 55,282        $ 45,144        $ 152,842        $ 126,930  
  Industrial Technology    101,875         40,315         291,185         127,892  
  Energy Systems & Controls    47,826         37,676         113,571         105,511  
  Scientific & Industrial Imaging    43,397         39,094         133,896         112,064  
    Total   $ 248,380        $ 162,229        $ 691,494        $ 472,397  
* Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $4,350 and $3,806 for the three months ended September 30, 2004 and 2003, respectively, and $11,940 and $10,219 for the nine months ended September 30, 2004 and 2003, respectively.