SARASOTA, Fla., Feb. 21 /PRNewswire-FirstCall/ -- Roper Industries, Inc. reported record financial results for the fourth quarter and full year ended December 31, 2007.
Fourth Quarter 2007
Fourth quarter diluted earnings per share (DEPS) were $0.77, up 24% from the comparable period in the prior year. Fourth quarter net earnings increased 27% to $72 million, and net sales were $560 million, an increase of 20% from the comparable period in the prior year. Excluding acquisitions, fourth quarter sales increased 14%, including a 3% benefit from foreign exchange. Operating cash flow of $117 million in the quarter established a record for any quarter in the company's history.
Operating profit for the fourth quarter increased 27% to $124 million, or 22.1% of net sales, up 120 basis points from the comparable period in the prior year. EBITDA in the fourth quarter increased 23% to $146 million, and represented 26.1% of net sales.
Full Year 2007
For the full year, DEPS were $2.68. Net earnings were $250 million, representing 11.9% of net sales of $2.1 billion. Excluding acquisitions, sales increased 14% for the full year, including a 2% benefit from foreign exchange. Full year operating profit was $438 million, up 30% from 2006, and operating margins expanded 100 basis points to 20.9% of net sales. Operating cash flow was $344 million, an increase of 31% from 2006.
"We are delighted that Roper once again achieved record performance in 2007 with the highest sales, orders, net earnings, EBITDA and cash flow in our history," said Brian Jellison, Roper's Chairman, President and CEO. "EBITDA increased $109 million in 2007 to $529 million and EBITDA margins reached 25.2%, up 50 basis points from the prior year. Internal orders grew 10% during 2007, and we finished the year with a record backlog of $532 million. The company's book-to-bill ratio remained strong despite an unprecedented fourth quarter in 2006 driven by our Middle East tolling win. Our operating margins continued to expand with record results in the fourth quarter and the full year. We are particularly pleased that our operating people made outstanding progress in reducing net working capital. These improvements, along with strong operating performance in our businesses, led to operating cash flow of $344 million in 2007, representing 16.4% of revenue and 137% of net earnings."
Acquisition of CBORD
Separately, Roper announced today the acquisition of The CBORD Group, Inc., the leading provider of card systems and integrated security solutions to higher education, healthcare and other markets in a transaction valued at $367 million, including $23 million in tax benefits that can be utilized over time. CBORD extends the reach of Roper's RF segment to the education and healthcare markets, and broadens the company's cash generation solution technologies beyond the water utility and transportation markets. Roper expects the addition of CBORD to be immediately cash accretive, to add $0.02- $0.03 to 2008 diluted earnings per share and to increase 2009 diluted earnings per share by up to $0.10. Including the acquisition of CBORD, Roper has made acquisition investments in the last twelve months totaling $474 million.
2008 Guidance
"In 2007 we continued the transformation of Roper and finished the year with exceptional strength across our businesses. With a record year end backlog, strong order growth and excellent strategic positioning, we expect a strong first quarter and another record year in 2008," Mr. Jellison added.
Roper expects 2008 net earnings of at least $294 million and EBITDA to exceed $600 million. The company expects to achieve first quarter DEPS of $0.65-$0.67 and full year 2008 DEPS of $3.10-$3.20, including the dilutive effect of the Company's senior subordinated convertible notes based on the company's stock price at the end of 2007.
Table 1: EBITDA (Millions) Q4 Q4 2006 2007 2006 2007 2008E Net Earnings $57 $72 $193 $250 $294+ Add: Interest Expense 12 12 45 52 48+ Add: Income Taxes 29 39 100 134 158+ Add: Depreciation and Amortization 22 23 82 93 100+ Rounding (1) - - - - EBITDA 119 146 420 529 600+ 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 22, 2007. The call can be accessed via webcast or by dialing (888) 713-3596 (US/Canada) or +1 (913) 312-0853, using access code 5877141. 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 5877141.
About Roper Industries
Roper Industries is a diversified growth company with annual revenues in excess of $2.1 billion, 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 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 2007 2006 CURRENT ASSETS: Cash and cash equivalents $308,768 $69,478 Accounts receivable 359,808 324,514 Inventories 174,138 168,319 Deferred taxes 27,800 17,908 Other current assets 80,623 47,276 Total current assets 951,137 627,495 PROPERTY, PLANT AND EQUIPMENT, NET 107,513 107,003 OTHER ASSETS: Goodwill 1,706,083 1,651,208 Other intangible assets, net 613,505 544,136 Deferred taxes 23,854 21,702 Other assets 51,092 43,815 Total other assets 2,394,534 2,260,861 TOTAL ASSETS $3,453,184 $2,995,359 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $115,809 $96,139 Accrued liabilities 194,055 184,148 Income taxes payable 24,121 5,896 Deferred taxes 2,442 1,555 Current portion of long-term debt 331,103 299,911 Total current liabilities 667,530 587,649 NONCURRENT LIABILITIES: Long-term debt 727,489 726,881 Deferred taxes 221,411 169,994 Other liabilities 46,948 23,996 Total liabilities 1,663,378 1,508,520 STOCKHOLDERS' EQUITY: Common stock 910 900 Additional paid-in capital 757,318 717,751 Retained earnings 944,886 721,899 Accumulated other comprehensive earnings 108,732 68,666 Treasury stock (22,040) (22,377) Total stockholders' equity 1,789,806 1,486,839 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,453,184 $2,995,359 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, 2007 2006 2007 2006 Net sales $560,084 $465,484 $2,102,049 $1,700,734 Cost of sales 274,011 229,689 1,043,654 839,409 Gross profit 286,073 235,795 1,058,395 861,325 Selling, general and administrative expenses 162,264 138,530 620,041 523,672 Income from operations 123,809 97,265 438,354 337,653 Interest expense 12,238 11,623 52,195 44,801 Loss on extinguishment of debt - - Other income/(expense) (618) (88) (2,502) 20 Earnings before income taxes 110,953 85,554 383,657 292,872 Income taxes 38,723 28,823 133,624 99,548 Net Earnings $72,230 $56,731 $250,033 $193,324 Earnings per share: Basic $0.81 $0.65 $2.83 $2.23 Diluted $0.77 $0.62 $2.68 $2.13 Weighted average common and common equivalent shares outstanding: Basic 88,698 87,323 88,390 86,842 Diluted 93,916 91,572 93,229 90,880 Roper Industries, Inc. and Subsidiaries Selected Segment Financial Data (unaudited) (Amounts in thousands and percents of net sales) Three months ended December 31, 2007 2006 Amount % Amount % Net sales: Industrial Technology 166,769 147,789 Energy Systems & Controls 155,376 110,590 Scientific & Industrial Imaging 99,121 88,983 RF Technology 138,818 118,122 Total $560,084 $465,484 Gross profit: Industrial Technology 82,293 49.3% 70,885 48.0% Energy Systems & Controls 85,616 55.1% 59,906 54.2% Scientific & Industrial Imaging 54,032 54.5% 50,671 56.9% RF Technology 64,132 46.2% 54,333 46.0% Total $286,073 51.1% $235,795 50.7% Operating profit*: Industrial Technology 44,029 26.4% 36,179 24.5% Energy Systems & Controls 44,788 28.8% 31,313 28.3% Scientific & Industrial Imaging 19,777 20.0% 19,782 22.2% RF Technology 26,388 19.0% 18,700 15.8% Total $134,982 24.1% $105,974 22.8% Net Orders: Industrial Technology 160,248 152,727 Energy Systems & Controls 149,288 115,530 Scientific & Industrial Imaging 99,735 96,038 RF Technology 149,979 162,574 Total $559,250 $526,869 Twelve months ended December 31, 2007 2006 Amount % Amount % Net sales: Industrial Technology 644,436 549,993 Energy Systems & Controls 516,420 343,699 Scientific & Industrial Imaging 376,163 338,906 RF Technology 565,030 468,136 Total $2,102,049 $1,700,734 Gross profit: Industrial Technology 310,700 48.2% 263,274 47.9% Energy Systems & Controls 276,775 53.6% 186,379 54.2% Scientific & Industrial Imaging 206,661 54.9% 192,396 56.8% RF Technology 264,259 46.8% 219,276 46.8% Total $1,058,395 50.4% $861,325 50.6% Operating profit*: Industrial Technology 164,750 25.6% 128,668 23.4% Energy Systems & Controls 126,367 24.5% 90,390 26.3% Scientific & Industrial Imaging 73,230 19.5% 72,485 21.4% RF Technology 117,057 20.7% 81,068 17.3% Total $481,404 22.9% $372,611 21.9% Net Orders: Industrial Technology 639,348 589,322 Energy Systems & Controls 525,899 346,880 Scientific & Industrial Imaging 377,653 341,178 RF Technology 575,100 511,188 Total $2,118,000 $1,788,568 * Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $11,173 and $8,709 for the three months ended December 31, 2007 and 2006, respectively, and $43,050 and $34,958 for the twelve months ended December 31, 2007 and 2006, respectively. Roper Industries, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited) (Amounts in thousands) Twelve months ended December 31, 2007 2006 Net earnings $250,033 $193,324 Depreciation 31,805 29,939 Amortization 61,375 52,105 Other, net 594 (12,830) Cash provided by operating activities 343,807 262,538 Business acquisitions, net of cash acquired (106,942) (352,125) Capital expenditures (30,107) (32,153) Other, net (5,339) (2,387) Cash used by investing activities (142,388) (386,665) Debt borrowings, net 27,600 125,663 Issuance of common stock - - Dividends (22,954) (20,402) Other, net 24,902 33,030 Cash provided by financing activities 29,548 138,291 Effect of exchange rate changes on cash 8,323 2,198 Net increase in cash and equivalents 239,290 16,362 Cash and equivalents, beginning of period 69,478 53,116 Cash and equivalents, end of period $308,768 $69,478
