EX-99.1 2 pressrelq209.htm Q2 2009 PRESS RELEASE pressrelq209.htm
Exhibit 99.1
 
 
 
Contact Information:
Investor Relations
941-556-2601
investor-relations@roperind.com
Roper Industries, Inc.



Roper Industries Announces Results For 2009 Second Quarter


Sequential Improvement in Orders, Operating Margin and Diluted Earnings Per Share;
Record Q2 Operating Cash Flow; Raising Full-Year Operating Cash Flow Guidance

Sarasota, Florida, July 28, 2009 ... Roper Industries, Inc.  (NYSE: ROP) reported financial results for the second quarter ended June 30, 2009.

Net earnings for the second quarter were $60 million, or $0.64 per diluted share.  Orders increased 4% over the first quarter, and second quarter sales were $505 million, flat to the first quarter and a 15% decrease compared to the same period in 2008.  Operating margin was 19.0%, an increase of 180 basis points from the first quarter.  Excluding restructuring costs, adjusted operating margin was 19.8% compared to 17.9% in the first quarter.  Operating cash flow was $110 million, an increase of 15% from the prior year and a second quarter record for the Company.  Results for the quarter include a charge of $0.03 per share for restructuring expenses and a gain of $0.03 per share from the sale of certain assets of the Company’s satellite communications business.

“During the second quarter we fulfilled our commitment to execute efficiently in this challenging environment,” said Brian Jellison, Roper’s Chairman, President and CEO.  “We are pleased with the performance of our businesses, particularly the improvements in gross margin, operating margin and cash generation.  Our asset-light business model continues to pay dividends, with record operating cash flow for the quarter resulting from strong earnings, high margins and continued working capital improvements.”

Sales in the RF Technology segment increased 7% compared to the same period in 2008, while sales in the remaining segments declined from the prior year due to the continuing effects of the economic environment.  Decremental margin (change in operating profit divided by change in sales), excluding the RF segment was 30% in the quarter, including the cost of restructuring, and 27% excluding restructuring costs.  “Our decremental margin performance was an improvement over our strong first quarter performance, and benefited from completed restructuring actions,” said Mr. Jellison.

Free cash flow (operating cash flow less capital expenditures) reached 173% of net income in the quarter and is 134% of net income year-to-date.  The Company ended the quarter with over $750 million in cash and available liquidity. “With the acquisition environment improving, we expect our liquidity position will serve us well as we pursue disciplined investments,” Mr. Jellison concluded.

 
Outlook and Guidance

Roper is increasing its full year operating cash flow guidance from $325 million to $350 million.  The Company expects full-year earnings per diluted share between $2.60 and $2.72, excluding the impact of restructuring costs and future acquisitions.


Table 1:  Sequential Income Statement (Millions)
 
Q2 2009
Q1 2009
     
Net Sales
505
505
Cost of Sales
250
254
Gross Profit
255
251
Selling, General & Administrative Expenses
159
164
Operating Profit
96
87


Table 2:  Operating Margin (Millions)
   
Q2 2009
Q1 2009
       
(1)
Operating Income
$96.0
$86.8
 
Restructuring Costs, All Segments
3.9
3.8
(2)
Adjusted Operating Income
99.9
90.6
       
(3)
Revenue
505
505
       
 
Operating Margin (1)/(3)
19.0%
17.2%
 
Adjusted Operating Margin (2)/(3)
19.8%
17.9%


Table 3:  Sales Growth
 
Q2 2009
Organic Growth
(16)%
Acquisitions / Divestitures
4%
Foreign Currency (FX)
(3%)
Total Sales Growth
(15%)


Table 4:  Decremental Margin (Millions)
   
As Reported
Excluding Restructuring
       
(1)
Change in Segment Operating Profit, Excluding RF
(30.4)
(30.4)
 
Restructuring Costs, Excluding RF
 
3.3
(2)
Adjusted Change in Segment Operating Profit, Excluding RF
 
(27.1)
       
(3)
Change in Revenue, Excluding RF
(101)
(101)
       
 
Decremental Margin (1)/(3)
30%
 
 
Adjusted Decremental Margin (2)/(3)
 
27%
 

 
Conference Call to be Held at 10:00 AM (ET) July 28, 2009

A conference call to discuss these results has been scheduled for 10:00 AM ET on Tuesday, July 28, 2009.  The call can be accessed via webcast or by dialing +1 888-352-6806 (US/Canada) or +1 719-325-2206, using confirmation code 4258775.  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 +1 888-203-1112 (US/Canada) or +1 719-457-0820 and using the access code 4258775.

About Roper Industries

Roper Industries is a diversified growth company and is a component of the Fortune 1000, S&P MidCap 400 and the Russell 1000 Indexes. 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.  Important 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,
 
 
 
2009
   
2008
 
ASSETS
           
CURRENT ASSETS:
           
  Cash and cash equivalents
  $ 220,826     $ 178,069  
  Accounts receivable
    325,922       376,855  
  Inventories
    177,360       185,919  
  Deferred taxes
    27,309       29,390  
  Unbilled Receivables
    56,915       61,168  
  Other current assets
    57,105       26,906  
    Total current assets
    865,437       858,307  
                 
PROPERTY, PLANT AND EQUIPMENT, NET
    106,588       112,463  
                 
OTHER ASSETS:
               
  Goodwill
    2,134,121       2,118,852  
  Other intangible assets, net
    774,682       804,020  
  Deferred taxes
    28,149       28,050  
  Other assets
    50,673       49,846  
    Total other assets
    2,987,625       3,000,768  
                 
TOTAL ASSETS
  $ 3,959,650     $ 3,971,538  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
CURRENT LIABILITIES:
               
  Accounts payable
  $ 98,645     $ 121,807  
  Accrued liabilities
    225,988       261,682  
  Income taxes payable
    -       1,892  
  Deferred taxes
    880       -  
  Current portion of long-term debt
    148,745       233,526  
    Total current liabilities
    474,258       618,907  
                 
NONCURRENT LIABILITIES:
               
  Long-term debt
    1,014,487       1,033,689  
  Deferred taxes
    280,485       272,182  
  Other liabilities
    45,182       42,826  
    Total liabilities
    1,814,412       1,967,604  
                 
STOCKHOLDERS' EQUITY:
               
  Common stock
    928       919  
  Additional paid-in capital
    835,475       815,736  
  Retained earnings
    1,283,652       1,187,467  
  Accumulated other comprehensive earnings
    46,673       21,513  
  Treasury stock
    (21,490 )     (21,701 )
    Total stockholders' equity
    2,145,238       2,003,934  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 3,959,650     $ 3,971,538  

 
 
 
 
 
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,
 
   
2009
   
2008 (1)
   
2009
   
2008 (1)
 
                         
Net sales
  $ 504,910     $ 594,414     $ 1,010,354     $ 1,137,409  
Cost of sales
    249,840       289,084       504,148       555,689  
                                 
Gross profit
    255,070       305,330       506,206       581,720  
                                 
Selling, general and administrative expenses
    159,106       178,789       323,450       346,913  
                                 
Income from operations
    95,964       126,541       182,756       234,807  
                                 
Interest expense
    13,762       12,055       27,271       26,019  
Other income/(expense)
    3,168       (636 )     2,812       1,141  
                                 
Earnings from continuing operations before
                         
   income taxes
    85,370       113,850       158,297       209,929  
                                 
Income taxes
    25,782       39,327       47,150       72,955  
                                 
Net Earnings
  $ 59,588     $ 74,523     $ 111,147     $ 136,974  
                                 
                                 
                                 
                                 
                                 
Earnings per share:
                               
  Basic
  $ 0.66     $ 0.83     $ 1.23     $ 1.53  
  Diluted
  $ 0.64     $ 0.79     $ 1.20     $ 1.46  
                                 
Weighted average common and common
                         
  equivalent shares outstanding:
                               
    Basic
    90,562       89,476       90,348       89,256  
    Diluted
    92,712       94,398       92,508       93,918  

 
(1) - 2008 results have been restated due to the adoption of FSP APB 14-1 which increased interest expense resulting from the amortization of the equity component of our convertible notes.  See the Company's 8-K filed on May 15, 2009 for additional information.


 
 
 
 
 
 
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,
 
   
2009
         
2008
         
2009
         
2008
       
   
Amount
 
%
   
Amount
   
%
   
Amount
   
%
   
Amount
   
%
 
Net sales:
                                               
  Industrial Technology
  $ 136,551           $ 183,247           $ 267,192           $ 356,864        
  Energy Systems & Controls
    105,398             144,716             212,009             273,103        
  Scientific & Industrial Imaging
    75,860             91,153             159,980             187,596        
  RF Technology
    187,101             175,298             371,173             319,846        
    Total
  $ 504,910           $ 594,414           $ 1,010,354           $ 1,137,409        
                                                         
                                                         
Gross profit:
                                                       
  Industrial Technology
  $ 65,732       48.1 %   $ 86,837       47.4 %   $ 128,441       48.1 %   $ 171,504       48.1 %
  Energy Systems & Controls
    56,296       53.4 %     79,874       55.2 %     111,659       52.7 %     148,548       54.4 %
  Scientific & Industrial Imaging
    42,466       56.0 %     49,090       53.9 %     88,216       55.1 %     102,678       54.7 %
  RF Technology
    90,576       48.4 %     89,529       51.1 %     177,890       47.9 %     158,990       49.7 %
    Total
  $ 255,070       50.5 %   $ 305,330       51.4 %   $ 506,206       50.1 %   $ 581,720       51.1 %
                                                                 
                                                                 
Operating profit*:
                                                               
  Industrial Technology
  $ 32,484       23.8 %   $ 47,591       26.0 %   $ 61,067       22.9 %   $ 92,860       26.0 %
  Energy Systems & Controls
    23,193       22.0 %     35,577       24.6 %     40,712       19.2 %     63,818       23.4 %
  Scientific & Industrial Imaging
    12,401       16.3 %     15,330       16.8 %     28,482       17.8 %     35,345       18.8 %
  RF Technology
    39,423       21.1 %     41,682       23.8 %     76,806       20.7 %     69,711       21.8 %
    Total
  $ 107,501       21.3 %   $ 140,180       23.6 %   $ 207,067       20.5 %   $ 261,734       23.0 %
                                                                 
                                                                 
Operating profit excluding restructuring*:
                                                       
  Industrial Technology
  $ 34,060       24.9 %   $ 47,591       26.0 %   $ 64,437       24.1 %   $ 92,860       26.0 %
  Energy Systems & Controls
    24,325       23.1 %     35,577       24.6 %     43,236       20.4 %     63,818       23.4 %
  Scientific & Industrial Imaging
    12,968       17.1 %     15,330       16.8 %     29,602       18.5 %     35,345       18.8 %
  RF Technology
    40,084       21.4 %     41,682       23.8 %     77,566       20.9 %     69,711       21.8 %
    Total
  $ 111,437       22.1 %   $ 140,180       23.6 %   $ 214,841       21.3 %   $ 261,734       23.0 %
                                                                 
                                                                 
Net Orders:
                                                               
  Industrial Technology
  $ 125,880             $ 165,873             $ 265,273             $ 350,884          
  Energy Systems & Controls
    96,144               139,247               193,958               267,583          
  Scientific & Industrial Imaging
    74,505               88,973               151,104               186,673          
  RF Technology
    192,225               212,394               350,008               359,350          
    Total
  $ 488,754             $ 606,487             $ 960,343             $ 1,164,490          
 
 
  *  Operating profit is before unallocated corporate general and administrative expenses.  These expenses
       were $11,537 and $13,639 for the three months ended June 30, 2009 and 2008, respectively and
       $24,311 and $26,927 for the six months ended June 30, 2009 and 2008, respectively.


 
 
 
 

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


   
Six months ended
 
   
June 30,
 
   
2009
   
2008
 
             
Net earnings
  $ 111,147     $ 136,974  
Depreciation
    17,520       16,190  
Amortization
    34,308       32,582  
Other, net
    (2,113 )     (18,450 )
  Cash provided by operating activities
    160,862       167,296  
                 
Business acquisitions, net of cash acquired
    (1,248 )     (399,708 )
Capital expenditures
    (12,359 )     (14,336 )
Other, net
    8,014       (2,271 )
  Cash used by investing activities
    (5,593 )     (416,315 )
                 
Debt borrowings (payments), net
    (105,104 )     84,875  
Dividends
    (14,850 )     (12,907 )
Other, net
    2,102       11,755  
  Cash provided by (used by) financing activities
    (117,852 )     83,723  
                 
Effect of exchange rate changes on cash
    5,340       2,714  
                 
Net increase (decrease) in cash and equivalents
    42,757       (162,582 )
Cash and equivalents, beginning of period
    178,069       308,768  
                 
Cash and equivalents, end of period
  $ 220,826     $ 146,186