DULUTH, Ga., Feb. 23 /PRNewswire-FirstCall/ -- Roper Industries, Inc. reported record sales, profitability and cash flow for the fourth quarter and full year ended December 31, 2005. Fourth quarter net sales were $393 million, operating cash flow was $105 million, net earnings were $50 million, and diluted earnings per share (DEPS) were $0.57. For the full year, net sales were $1.45 billion, operating cash flow was $281 million, net earnings were $153 million, and DEPS were $1.74. Fourth quarter and full year DEPS include $4 million of net earnings benefit from the repatriation of foreign earnings and the non-cash write-off of issuance costs related to the Company's senior subordinated convertible notes.
"We are pleased to conclude 2005 with continued record-setting performance in the fourth quarter," said Brian Jellison, Roper's Chairman, President and CEO. "All of our segments reported growth, leading to a 42% net sales increase over the same quarter last year. This reflects the benefits of our recent acquisitions. Despite unfavorable currency exchange effects that reduced internal sales growth by nearly 4%, we achieved net internal sales growth of 5% or 9% before the currency impact. We leveraged our sales growth into a 170 basis point year-over-year improvement in operating margins, achieving Q4 margins of 20.6%. Our cash flow expanded substantially demonstrating the success of our focus on growth and cash returns."
Fourth quarter operating cash flow increased 67% over the prior year comparable period and full year operating cash flow grew 71%. 2005 results include record performance in net working capital efficiency, as well as the benefits from utilizing net operating loss carry forwards from recent acquisitions. In the fourth quarter, net working capital was reduced to 13.8% of annualized quarterly sales. Fourth quarter EBITDA grew 77% to $97 million, or 24.8% of sales. The Company reported full year EBITDA of $335 million, 64% higher than the prior year.
"I am pleased that we achieved our business objectives in 2005," said Mr. Jellison. "We successfully integrated TransCore, acquired in December 2004. We continued our internal growth and cash flow momentum throughout the year. We put our expanding cash flow to work, acquiring three high-quality growth businesses in 2005. At the same time, we made progress towards our long-term objective of achieving investment grade status, reducing our net debt-to-net capital ratio to 40.2% and improving our debt-to-EBITDA ratio to 2.7x. This positions us well as we enter 2006."
In 2006, Roper expects full year EBITDA of at least $390 million and operating cash flow of at least $280 million. Full year DEPS are expected to be in the range of $1.95-$2.07. Consistent with recent year performance, the Company expects increasing quarterly performance throughout the year, with first quarter DEPS of $0.37-$0.40. 2006 DEPS guidance includes equity compensation expense related to the implementation of SFAS 123R. The Company's guidance does not include benefits from future acquisitions or the potential dilutive effects resulting from the Company's convertible notes.
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, February 24, 2006. The call can be accessed via webcast or by dialing (800) 819-9193 (US/Canada) or +1 (913) 981-4911, using access code 3179487. Webcast information and conference call materials will be made available in the "Investor" section of Roper's website (http://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 3179487.
Table 1: EBITDA (Millions)
Q4 Q4
2004 2005 2004 2005 2006E
Net Earnings $25 $50 $94 $153 $180+
Add: Interest
Expense 8 11 29 43 46+
Add: Income Taxes 11 18 40 67 90+
Add: Depreciation
and Amortization 11 18 41 71 74+
Rounding - - - 1 -
EBITDA 55 97 204 335 390+
Table 2: Net Debt-to-Net Capital Ratio
(Millions)
Year-
End
2005
Total Debt $894
Less: Cash (53)
Equals: Net Debt 841
Add: Shareholders' Equity 1,251
Equals: Net Capital $2,092
Net Debt Divided by Net
Capital 40.2%
About Roper Industries
Roper Industries is a diversified industrial growth company with more than $1.4 billion of revenues. 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 http://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, 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 2005 2004
CURRENT ASSETS:
Cash and cash equivalents $53,116 $129,419
Accounts receivable 257,210 242,014
Inventories 131,838 132,282
Deferred taxes 19,153 20,485
Other current assets 36,898 31,960
Total current assets 498,215 556,160
PROPERTY, PLANT AND EQUIPMENT, NET 97,462 97,949
OTHER ASSETS:
Goodwill 1,353,712 1,144,035
Other intangible assets, net 501,365 487,173
Deferred taxes 13,935 34,205
Other assets 45,708 46,882
Total other assets 1,914,720 1,712,295
TOTAL ASSETS $2,510,397 $2,366,404
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $71,693 $65,801
Accrued liabilities 142,835 145,880
Income taxes payable 7,606 -
Deferred taxes 5,310 5,342
Current portion of long-term debt (1) 273,313 36,527
Total current liabilities 500,757 253,550
NONCURRENT LIABILITIES:
Long-term debt 620,958 855,364
Deferred taxes 116,036 125,984
Other liabilities 21,733 17,420
Total liabilities 1,259,484 1,252,318
STOCKHOLDERS' EQUITY:
Common stock 883 436
Additional paid-in capital 670,322 645,373
Retained earnings 549,603 415,188
Accumulated other comprehensive
earnings 52,856 76,249
Treasury stock (22,751) (23,160)
Total stockholders' equity 1,250,913 1,114,086
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $2,510,397 $2,366,404
(1) At the end of the Company's third quarter ended September 30, 2005,
the Company's $230 million of senior subordinated convertible notes due
in 2034 was required to be classified as current debt. This resulted
from the triggering of the conversion feature of the notes due to
increases in the trading price of the Company's stock since the issuance
of the notes in December 2003. As previously reported, upon conversion
of the notes, if any, the Company would be required to pay cash for the
accreted principal value of the notes. The Company does not expect
noteholders to exercise their conversion rights within the next 12
months.
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,
2005 2004 2005 2004
Net sales $393,166 $276,549 $1,453,731 $969,764
Cost of sales 194,082 136,528 727,324 484,719
Gross profit 199,084 140,021 726,407 485,045
Selling, general and
administrative expenses 118,217 87,819 461,508 313,743
Income from operations 80,867 52,202 264,899 171,302
Interest expense 10,623 7,781 43,394 28,847
Loss on extinguishment of debt 3,932 8,168 3,932 8,168
Other income/(expense) 1,884 (589) 2,994 (571)
Earnings before income taxes 68,196 35,664 220,567 133,716
Income taxes 17,788 10,878 67,392 39,864
Net Earnings $50,408 $24,786 $153,175 $93,852
Earnings per share:(1)
Basic: $0.59 $0.32 $1.79 $1.26
Diluted $0.57 $0.32 $1.74 $1.24
Weighted average common and
common equivalent shares
outstanding:
Basic 85,851 76,524 85,498 74,440
Diluted 88,824 77,840 87,884 75,664
(1) Share data adjusted for effect of 2-for-1 stock split effective
August 26, 2005.
Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
Three months ended December 31,
2005 2004
Amount % Amount %
Net sales:
Instrumentation $68,901 $64,144
Industrial Technology 106,602 101,857
Energy Systems & Controls 46,368 45,087
Scientific & Industrial Imaging 66,351 50,248
RF Technology 104,944 15,213
Total $393,166 $276,549
Gross profit:
Instrumentation $40,582 58.9% $37,634 58.7%
Industrial Technology 47,084 44.2% 44,693 43.9%
Energy Systems & Controls 26,947 58.1% 23,605 52.4%
Scientific & Industrial Imaging 35,886 54.1% 27,949 55.6%
RF Technology 48,585 46.3% 6,140 40.4%
Total $199,084 50.6% $140,021 50.6%
Operating profit*:
Instrumentation $18,315 26.6% $16,078 25.1%
Industrial Technology 24,493 23.0% 22,113 21.7%
Energy Systems & Controls 14,383 31.0% 12,340 27.4%
Scientific & Industrial Imaging 13,304 20.1% 9,721 19.3%
RF Technology 18,505 17.6% (20) n/m
Total $89,000 22.6% $60,232 21.8%
Net Orders:
Instrumentation $68,441 $62,979
Industrial Technology 107,652 95,303
Energy Systems & Controls 56,774 56,888
Scientific & Industrial Imaging 68,483 48,991
RF Technology 90,520 15,213
Total $391,870 $279,374
* Operating profit is before unallocated corporate general and
administrative expenses. Such expenses were $8,133 and $8,030 for
the three months ended December 31, 2005 and 2004, respectively, and
$27,173 and $19,970 for the twelve months ended December 31, 2005
and 2004, respectively.
Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
Twelve months ended December 31,
2005 2004
Amount % Amount %
Net sales:
Instrumentation $232,916 $213,722
Industrial Technology 430,037 396,671
Energy Systems & Controls 174,674 156,232
Scientific & Industrial Imaging 219,530 187,926
RF Technology 396,574 15,213
Total $1,453,731 $969,764
Gross profit:
Instrumentation $136,161 58.5% $123,443 57.8%
Industrial Technology 189,469 44.1% 169,064 42.6%
Energy Systems & Controls 95,555 54.7% 81,664 52.3%
Scientific & Industrial Imaging 121,330 55.3% 104,734 55.7%
RF Technology 183,892 46.4% 6,140 40.4%
Total $726,407 50.0% $485,045 50.0%
Operating profit*:
Instrumentation $52,415 22.5% $43,141 20.2%
Industrial Technology 96,839 22.5% 81,975 20.7%
Energy Systems & Controls 44,824 25.7% 33,807 21.6%
Scientific & Industrial Imaging 39,448 18.0% 32,369 17.2%
RF Technology 58,546 14.8% (20) n/m
Total $292,072 20.1% $191,272 19.7%
Net Orders:
Instrumentation $236,121 $215,821
Industrial Technology 440,908 386,488
Energy Systems & Controls 178,393 170,459
Scientific & Industrial Imaging 230,434 182,887
RF Technology 408,825 15,213
Total $1,494,681 $970,868
* Operating profit is before unallocated corporate general and
administrative expenses. Such expenses were $8,133 and $8,030 for
the three months ended December 31, 2005 and 2004, respectively, and
$27,173 and $19,970 for the twelve months ended December 31, 2005
and 2004, respectively.
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
Twelve months ended
December 31,
2005 2004
Net earnings $153,175 $93,852
Depreciation 28,413 18,260
Amortization 42,906 23,127
Other, net 56,807 29,586
Cash provided by operating
activities 281,301 164,825
Business acquisitions, net of cash
acquired (329,934) (641,147)
Capital expenditures (24,762) (12,141)
Other, net (1,174) (5,111)
Cash used by investing activities (355,870) (658,399)
Debt borrowings, net 7,848 223,368
Issuance of common stock - 322,783
Dividends (18,151) (14,201)
Other, net 15,686 16,422
Cash provided by financing
activities 5,383 548,372
Effect of exchange rate changes on
cash (7,117) 4,387
Net increase in cash and equivalents (76,303) 59,185
Cash and equivalents, beginning of
period 129,419 70,234
Cash and equivalents, end of period $53,116 $129,419
First Call Analyst:
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