Contact Information: Investor Relations 941-556-2601 investor-relations@roperind.com | Roper Industries, Inc. |
Roper Industries Announces Results For 2009 Fourth Quarter and Full Year
Fourth Quarter Net Earnings Per Diluted Share of $0.77
Orders Increase Over Prior Year Period
Fourth Quarter Operating Cash Flow of $120 Million
Full Year Operating Cash Flow of $368 Million
Sarasota, Florida, February 3, 2010 .... Roper Industries, Inc. (NYSE: ROP) reported financial results for the fourth quarter and full year ended December 31, 2009.
Net earnings for the fourth quarter were $72 million, or $0.77 per diluted share. Adjusted earnings per diluted share were $0.81, which excludes $0.04 of restructuring and acquisition charges. Sales in the fourth quarter were $554 million, a 4% decrease from the same period in 2008. Orders were $565 million, an increase of 1% over the fourth quarter of the prior year, marking the first time since the third quarter of 2008 that orders exceeded the prior year. Operating margin was 21.8%, an increase of 110 basis points from the prior year, and operating cash flow was $120 million, representing 22% of revenue and 166% of net earnings.
Compared sequentially to the third quarter, Roper’s fourth quarter performance reflected a double digit increase in sales and orders, a 31% increase in operating profit and margin expansion of 290 basis points.
For the full year, net earnings were $239 million, or $2.58 per diluted share, including $0.12 of restructuring and acquisition charges. Sales for the year were $2.05 billion, down 11% from the prior year. Operating cash flow was $368 million, representing 18% of revenue and 153% of net earnings.
“Our businesses performed very well during the fourth quarter, as we saw continued improvement in order trends across all segments,” said Brian Jellison, Roper’s Chairman, President and CEO. “Margins expanded as a result of strong execution, favorable leverage on increased sales compared to the third quarter, and the benefits of prior restructuring actions. Our consistent focus on cash flow and working capital management resulted in exceptional cash performance for 2009, the twelfth consecutive year that free cash flow exceeded net income.”
“We invested over $350 million in two acquisitions during the quarter,” continued Mr. Jellison. “Verathon, a leading global provider of proprietary medical devices and services, expands our medical platform and provides global coverage to hospitals, primary care physicians, acute care and military end markets with direct sales coverage. United Toll Systems, which provides software and in-lane hardware systems for toll and traffic markets, adds to our RF solutions for the toll industry. We are excited about the contribution of these businesses to our growth in 2010 and expect to pursue other strategic acquisitions during the year.”
2010 Outlook and Guidance
The Company expects full year diluted earnings per share (DEPS) to be between $2.83 and $3.03 with operating cash flow between $375 million and $400 million. First quarter DEPS are expected to be between $0.62 and $0.65, which excludes an expected $0.03 impact from fair value adjustments to acquisition-related inventory. The Company’s guidance excludes future acquisitions.
Table 1: Sales Growth
Q4 2009 | FY 2009 | ||
Organic Growth | (8%) | (14%) | |
Acquisitions / Divestitures | 2% | 4% | |
Foreign Currency | 2% | (1%) | |
Total Sales Growth | (4%) | (11%) |
Table 2: Free Cash Flow (millions)
FY 2009 | |
Operating Cash Flow | $368 |
Less: Capital Expenditures | (26) |
Free Cash Flow | $342 |
Conference Call to be Held at 8:00 AM (ET) Today
A conference call to discuss these results has been scheduled for 8:00 AM ET on Wednesday, February 3, 2010. The call can be accessed via webcast or by dialing +1 888-539-3679 (US/Canada) or +1 719-457-2638, using confirmation code 1194375. 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 1194375.
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. 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) | ||||||||
December 31, | December 31, | |||||||
ASSETS | 2009 | 2008 | ||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 167,708 | $ | 178,069 | ||||
Accounts receivable | 381,658 | 376,855 | ||||||
Inventories | 178,795 | 185,919 | ||||||
Deferred taxes | 27,306 | 29,390 | ||||||
Unbilled receivable | 57,153 | 61,168 | ||||||
Other current assets | 58,125 | 26,906 | ||||||
Total current assets | 870,745 | 858,307 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 109,493 | 112,463 | ||||||
OTHER ASSETS: | ||||||||
Goodwill | 2,388,432 | 2,118,852 | ||||||
Other intangible assets, net | 868,900 | 804,020 | ||||||
Deferred taxes | 33,123 | 28,050 | ||||||
Other assets | 57,043 | 49,846 | ||||||
Total other assets | 3,347,498 | 3,000,768 | ||||||
TOTAL ASSETS | $ | 4,327,736 | $ | 3,971,538 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 110,103 | $ | 121,807 | ||||
Accrued liabilities | 253,441 | 261,682 | ||||||
Income taxes payable | - | 1,892 | ||||||
Deferred taxes | 1,671 | - | ||||||
Current portion of long-term debt | 112,796 | 233,526 | ||||||
Total current liabilities | 478,011 | 618,907 | ||||||
NONCURRENT LIABILITIES: | ||||||||
Long-term debt | 1,040,962 | 1,033,689 | ||||||
Deferred taxes | 328,299 | 272,182 | ||||||
Other liabilities | 58,974 | 42,826 | ||||||
Total liabilities | 1,906,246 | 1,967,604 | ||||||
STOCKHOLDERS' EQUITY: | ||||||||
Common stock | 958 | 919 | ||||||
Additional paid-in capital | 982,321 | 815,736 | ||||||
Retained earnings | 1,395,586 | 1,187,467 | ||||||
Accumulated other comprehensive earnings | 63,945 | 21,513 | ||||||
Treasury stock | (21,320 | ) | (21,701 | ) | ||||
Total stockholders' equity | 2,421,490 | 2,003,934 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 4,327,736 | $ | 3,971,538 |
Roper Industries, Inc. and Subsidiaries | ||||||||||||||||
Condensed Consolidated Statements of Earnings (unaudited) | ||||||||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net sales | $ | 553,638 | $ | 575,862 | $ | 2,049,668 | $ | 2,306,371 | ||||||||
Cost of sales | 262,226 | 278,054 | 1,006,530 | 1,118,083 | ||||||||||||
Gross profit | 291,412 | 297,808 | 1,043,138 | 1,188,288 | ||||||||||||
Selling, general and administrative expenses | 170,644 | 178,753 | 647,742 | 702,127 | ||||||||||||
Income from operations | 120,768 | 119,055 | 395,396 | 486,161 | ||||||||||||
Interest expense | 16,836 | 18,678 | 58,544 | 60,819 | ||||||||||||
Other income (expense) | (1 | ) | 5,169 | 2,916 | 3,474 | |||||||||||
Earnings from continuing operations before | ||||||||||||||||
income taxes | 103,931 | 105,546 | 339,768 | 428,816 | ||||||||||||
Income taxes | 32,007 | 34,675 | 100,287 | 146,942 | ||||||||||||
Net Earnings | $ | 71,924 | $ | 70,871 | $ | 239,481 | $ | 281,874 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.79 | $ | 0.79 | $ | 2.64 | $ | 3.15 | ||||||||
Diluted | $ | 0.77 | $ | 0.77 | $ | 2.58 | $ | 3.01 | ||||||||
Weighted average common and common | ||||||||||||||||
equivalent shares outstanding: | ||||||||||||||||
Basic | 91,156 | 89,726 | 90,685 | 89,468 | ||||||||||||
Diluted | 93,370 | 92,336 | 92,820 | 93,699 |
Roper Industries, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||
(Amounts in thousands) | ||||||||
Twelve months ended | ||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Net earnings | $ | 239,481 | $ | 281,874 | ||||
Non-cash items: | ||||||||
Depreciation | 34,163 | 33,900 | ||||||
Amortization | 69,285 | 69,208 | ||||||
Stock-based compensation expense | 27,476 | 30,905 | ||||||
Income taxes | (6,225 | ) | (2,675 | ) | ||||
Changes in assets and liabilities: | ||||||||
Receivables | 30,993 | 13,659 | ||||||
Inventory | 31,081 | (8,728 | ) | |||||
Accounts payable | (17,011 | ) | 2,586 | |||||
Accrued liabilities | (41,790 | ) | 6,623 | |||||
Other, net | 68 | 7,086 | ||||||
Cash provided by operating activities | 367,521 | 434,438 | ||||||
Business acquisitions, net of cash acquired | (354,561 | ) | (704,764 | ) | ||||
Capital expenditures | (25,885 | ) | (30,047 | ) | ||||
Other, net | 6,254 | (4,483 | ) | |||||
Cash used by investing activities | (374,192 | ) | (739,294 | ) | ||||
Principal debt borrowings | 500,000 | 850,000 | ||||||
Principal debt payments | (474,270 | ) | (957,745 | ) | ||||
Revolver borrowings (payments), net | (139,000 | ) | 313,000 | |||||
Debt issuance costs | (4,708 | ) | (10,226 | ) | ||||
Dividends | (29,823 | ) | (25,887 | ) | ||||
Excess tax benefit from share-based payment | 2,813 | 5,359 | ||||||
Proceeds from issuance of common stock | 121,427 | - | ||||||
Proceeds from exercise of stock options | 10,505 | 11,037 | ||||||
Other, net | (563 | ) | 2,381 | |||||
Cash provided by (used by) financing activities | (13,619 | ) | 187,919 | |||||
Effect of exchange rate changes on cash | 9,929 | (13,762 | ) | |||||
Net increase (decrease) in cash and equivalents | (10,361 | ) | (130,699 | ) | ||||
Cash and equivalents, beginning of period | 178,069 | 308,768 | ||||||
Cash and equivalents, end of period | $ | 167,708 | $ | 178,069 |
Roper Industries, Inc. and Subsidiaries | ||||||||||||||||||||||||||||||||
Selected Segment Financial Data (unaudited) | ||||||||||||||||||||||||||||||||
(Amounts in thousands and percents of net sales) | ||||||||||||||||||||||||||||||||
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||||||||
Industrial Technology | $ | 138,489 | $ | 161,693 | $ | 536,219 | $ | 687,622 | ||||||||||||||||||||||||
Energy Systems & Controls | 125,922 | 137,576 | 440,919 | 548,214 | ||||||||||||||||||||||||||||
Scientific & Industrial Imaging | 115,862 | 93,336 | 354,776 | 375,542 | ||||||||||||||||||||||||||||
RF Technology | 173,365 | 183,257 | 717,754 | 694,993 | ||||||||||||||||||||||||||||
Total | $ | 553,638 | $ | 575,862 | $ | 2,049,668 | $ | 2,306,371 | ||||||||||||||||||||||||
Gross profit: | ||||||||||||||||||||||||||||||||
Industrial Technology | $ | 64,892 | 46.9 | % | $ | 79,985 | 49.5 | % | $ | 255,393 | 47.6 | % | $ | 333,704 | 48.5 | % | ||||||||||||||||
Energy Systems & Controls | 69,794 | 55.4 | % | 71,413 | 51.9 | % | 233,917 | 53.1 | % | 295,133 | 53.8 | % | ||||||||||||||||||||
Scientific & Industrial Imaging | 67,926 | 58.6 | % | 52,488 | 56.2 | % | 200,311 | 56.5 | % | 206,623 | 55.0 | % | ||||||||||||||||||||
RF Technology | 88,800 | 51.2 | % | 93,922 | 51.3 | % | 353,517 | 49.3 | % | 352,828 | 50.8 | % | ||||||||||||||||||||
Total | $ | 291,412 | 52.6 | % | $ | 297,808 | 51.7 | % | $ | 1,043,138 | 50.9 | % | $ | 1,188,288 | 51.5 | % | ||||||||||||||||
Operating profit*: | ||||||||||||||||||||||||||||||||
Industrial Technology | $ | 32,345 | 23.4 | % | $ | 41,643 | 25.8 | % | $ | 123,959 | 23.1 | % | $ | 178,270 | 25.9 | % | ||||||||||||||||
Energy Systems & Controls | 32,862 | 26.1 | % | 30,250 | 22.0 | % | 92,788 | 21.0 | % | 126,609 | 23.1 | % | ||||||||||||||||||||
Scientific & Industrial Imaging | 30,883 | 26.7 | % | 20,648 | 22.1 | % | 74,183 | 20.9 | % | 74,739 | 19.9 | % | ||||||||||||||||||||
RF Technology | 38,706 | 22.3 | % | 39,885 | 21.8 | % | 154,430 | 21.5 | % | 159,787 | 23.0 | % | ||||||||||||||||||||
Total | $ | 134,796 | 24.3 | % | $ | 132,426 | 23.0 | % | $ | 445,360 | 21.7 | % | $ | 539,405 | 23.4 | % | ||||||||||||||||
Operating profit excluding restructuring*: | ||||||||||||||||||||||||||||||||
Industrial Technology | $ | 32,394 | 23.4 | % | $ | 41,835 | 25.9 | % | $ | 128,325 | 23.9 | % | $ | 178,462 | 26.0 | % | ||||||||||||||||
Energy Systems & Controls | 34,557 | 27.4 | % | 32,172 | 23.4 | % | 98,296 | 22.3 | % | 128,531 | 23.4 | % | ||||||||||||||||||||
Scientific & Industrial Imaging | 31,032 | 26.8 | % | 20,946 | 22.4 | % | 75,829 | 21.4 | % | 75,037 | 20.0 | % | ||||||||||||||||||||
RF Technology | 38,800 | 22.4 | % | 40,105 | 21.9 | % | 155,342 | 21.6 | % | 160,007 | 23.0 | % | ||||||||||||||||||||
Total | $ | 136,783 | 24.7 | % | $ | 135,058 | 23.5 | % | $ | 457,792 | 22.3 | % | $ | 542,037 | 23.5 | % | ||||||||||||||||
Net Orders: | ||||||||||||||||||||||||||||||||
Industrial Technology | $ | 137,159 | $ | 141,850 | $ | 528,208 | $ | 656,176 | ||||||||||||||||||||||||
Energy Systems & Controls | 128,452 | 138,919 | 427,003 | 541,472 | ||||||||||||||||||||||||||||
Scientific & Industrial Imaging | 113,699 | 93,937 | 349,132 | 383,543 | ||||||||||||||||||||||||||||
RF Technology | 185,415 | 184,046 | 719,666 | 722,670 | ||||||||||||||||||||||||||||
Total | $ | 564,725 | $ | 558,752 | $ | 2,024,009 | $ | 2,303,861 | ||||||||||||||||||||||||
* Operating profit is before unallocated corporate general and administrative expenses. These expenses | ||||||||||||||||||||||||||||||||
were $14,028 and $13,371 for the three months ended December 31, 2009 and 2008, respectively, and | ||||||||||||||||||||||||||||||||
$49,964 and $53,244 for the twelve months ended December 31, 2009 and 2008, respectively. |