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, Fla., Feb. 3 /PRNewswire-FirstCall/ -- 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
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Organic Growth (8%) (14%)
Acquisitions / Divestitures 2% 4%
Foreign Currency 2% (1%)
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Total Sales Growth (4%) (11%)
==== =====
Table 2: Free Cash Flow (millions)
FY 2009
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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
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Total current assets 870,745 858,307
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PROPERTY, PLANT AND EQUIPMENT, NET 109,493 112,463
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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
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Total other assets 3,347,498 3,000,768
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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
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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
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Total liabilities 1,906,246 1,967,604
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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
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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
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
Three months ended December 31,
----------------------------------------
2009 2008
-------------------- -------------------
Amount % Amount %
-----------------------------------------------------------------------
Net sales:
Industrial Technology $138,489 $161,693
Energy Systems & Controls 125,922 137,576
Scientific & Industrial
Imaging 115,862 93,336
RF Technology 173,365 183,257
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Total $553,638 $575,862
=======================================================================
Gross profit:
Industrial Technology $64,892 46.9% $79,985 49.5%
Energy Systems & Controls 69,794 55.4% 71,413 51.9%
Scientific & Industrial
Imaging 67,926 58.6% 52,488 56.2%
RF Technology 88,800 51.2% 93,922 51.3%
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Total $291,412 52.6% $297,808 51.7%
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Operating profit*:
Industrial Technology $32,345 23.4% $41,643 25.8%
Energy Systems & Controls 32,862 26.1% 30,250 22.0%
Scientific & Industrial
Imaging 30,883 26.7% 20,648 22.1%
RF Technology 38,706 22.3% 39,885 21.8%
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Total $134,796 24.3% $132,426 23.0%
=======================================================================
Operating profit excluding
restructuring*:
Industrial Technology $32,394 23.4% $41,835 25.9%
Energy Systems & Controls 34,557 27.4% 32,172 23.4%
Scientific & Industrial
Imaging 31,032 26.8% 20,946 22.4%
RF Technology 38,800 22.4% 40,105 21.9%
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Total $136,783 24.7% $135,058 23.5%
=======================================================================
Net Orders:
Industrial Technology $137,159 $141,850
Energy Systems & Controls 128,452 138,919
Scientific & Industrial
Imaging 113,699 93,937
RF Technology 185,415 184,046
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Total $564,725 $558,752
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Twelve months ended December 31,
----------------------------------------
2009 2008
-------------------- -------------------
Amount % Amount %
-----------------------------------------------------------------------
Net sales:
Industrial Technology $536,219 $687,622
Energy Systems & Controls 440,919 548,214
Scientific & Industrial
Imaging 354,776 375,542
RF Technology 717,754 694,993
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Total $2,049,668 $2,306,371
=======================================================================
Gross profit:
Industrial Technology $255,393 47.6% $333,704 48.5%
Energy Systems & Controls 233,917 53.1% 295,133 53.8%
Scientific & Industrial
Imaging 200,311 56.5% 206,623 55.0%
RF Technology 353,517 49.3% 352,828 50.8%
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Total $1,043,138 50.9%$1,188,288 51.5%
=======================================================================
Operating profit*:
Industrial Technology $123,959 23.1% $178,270 25.9%
Energy Systems & Controls 92,788 21.0% 126,609 23.1%
Scientific & Industrial
Imaging 74,183 20.9% 74,739 19.9%
RF Technology 154,430 21.5% 159,787 23.0%
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Total $445,360 21.7% $539,405 23.4%
=======================================================================
Operating profit excluding
restructuring*:
Industrial Technology $128,325 23.9% $178,462 26.0%
Energy Systems & Controls 98,296 22.3% 128,531 23.4%
Scientific & Industrial
Imaging 75,829 21.4% 75,037 20.0%
RF Technology 155,342 21.6% 160,007 23.0%
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Total $457,792 22.3% $542,037 23.5%
=======================================================================
Net Orders:
Industrial Technology $528,208 $656,176
Energy Systems & Controls 427,003 541,472
Scientific & Industrial
Imaging 349,132 383,543
RF Technology 719,666 722,670
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Total $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.
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
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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
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Cash and equivalents, end of period $167,708 $178,069
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SOURCE Roper Industries, Inc.
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