SARASOTA, Fla., Feb. 5 /PRNewswire-FirstCall/ -- Roper Industries, Inc. reported financial results for the fourth quarter and full year ended December 31, 2008.
Fourth Quarter 2008
Net earnings for the fourth quarter were $72 million, or $0.78 per diluted share, which includes $0.02 for restructuring charges. Excluding restructuring charges, adjusted earnings per diluted share were $0.80. Sales in the fourth quarter were $576 million, a 3% increase over the same period in 2007, which includes 9% from acquisitions and a negative 3% each from foreign currency and organic growth. Operating cash flow was $129 million, representing 22% of revenue and 179% of net earnings.
Full Year 2008
Full year 2008 sales increased 10% to $2.3 billion. Operating cash flow increased 26% to $434 million, representing 19% of revenue and 152% of net earnings. Net earnings for the full year were $287 million, or $3.06 per diluted share. Included in the full year 2008 earnings per diluted share are the fourth quarter restructuring costs noted above, as well as the non-cash charge for the early termination of the Company's secured credit facility recorded in the third quarter. Excluding these items, adjusted diluted earnings per share were $3.10.
"We are pleased with the performance of our businesses in 2008," said Brian Jellison, Roper's Chairman, President and CEO. "Our consistent focus on growth, cash flow generation and working capital management, and lean cost structures led to record 2008 performance. Sales for the year grew 10%, EBITDA margin expanded 50 basis points to 25.7% and operating cash flow was exceptional at $434 million. In addition, we successfully refinanced our debt early in the third quarter, achieved investment grade credit ratings and we enter 2009 with over $700 million in cash and available liquidity.
"End market and economic conditions worsened in the fourth quarter, particularly affecting order levels in our Energy Systems and Industrial Technology segments," continued Mr. Jellison. "Fourth quarter results include a $3 million pre-tax charge for severance costs, affecting approximately 225 people, with annualized savings over $10 million. The majority of these reductions have been completed."
2009 Outlook and Guidance
Mr. Jellison said, "We are well positioned for what will be a difficult economy in 2009 based on the actions already completed and those underway, coupled with our asset-light business models, leading positions in niche markets, and proven ability to complete and integrate strategic acquisitions. Our outlook for 2009 reflects growth from acquisitions completed in 2008 and benefits from completed restructuring actions, offset by 4% negative foreign currency headwinds and flat to low single digit negative organic growth. We expect our Radio Frequency and Scientific and Industrial Imaging segments to perform well in 2009, reflecting operational improvements and growth in businesses acquired during 2008 that provide software and solutions to the education, transportation and infrastructure markets. We expect these segments will largely offset the difficult economic environment for several end markets served by our Industrial Technology and Energy Systems segments, where our restructuring actions are driving strong operating performance, but currency translation will result in unfavorable revenue comparisons in 2009."
The Company expects full year diluted earnings per share (DEPS) to be between $2.70 and $3.00 with operating cash flow above 130% of net earnings. First quarter DEPS are expected to be between $0.55 and $0.60. The Company's guidance excludes restructuring costs and future acquisitions.
"Throughout the year we will continually review the positioning and performance of each of our businesses to ensure that their cost structures are appropriately aligned with the realities of their markets. We will continue to build on existing strengths across our business units and utilize our financial strength to pursue disciplined acquisition opportunities," Mr. Jellison concluded.
Table 1: Sales Growth Q4 FY 2008 2008 Organic Growth (3%) 3% Acquisitions / Divestitures 9% 6% Foreign Currency (FX) (3%) 1% Total Sales Growth 3% 10% Table 2: EBITDA (Millions) Q4 FY 2008 2008 Net Earnings $72 $287 Add: Interest Expense 17 54 Add: Income Taxes 35 149 Add: Depreciation and Amortization 28 103 EBITDA 152 593 Conference Call to be Held at 2:00 PM (ET) Tomorrow
A conference call to discuss these results has been scheduled for 2:00 PM ET on Friday, February 6, 2009. The call can be accessed via webcast or by dialing +1 888-262-8790 (US/Canada) or +1 913-312-1483, using confirmation code 3973242. Webcast information and conference call materials will be made available in the Investors 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 3973242.
About Roper Industries
Roper Industries is a diversified growth company with annual revenues of $2.3 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, 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 2008 2007 CURRENT ASSETS: Cash and cash equivalents $178,069 $308,768 Accounts receivable 376,855 359,808 Inventories 185,919 174,138 Deferred taxes 29,390 27,800 Unbilled receivable 61,168 60,218 Other current assets 26,906 20,405 Total current assets 858,307 951,137 PROPERTY, PLANT AND EQUIPMENT, NET 112,463 107,513 OTHER ASSETS: Goodwill 2,118,852 1,706,083 Other intangible assets, net 804,020 613,505 Deferred taxes 28,050 23,854 Other assets 49,846 51,092 Total other assets 3,000,768 2,394,534 TOTAL ASSETS $3,971,538 $3,453,184 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $121,807 $115,809 Accrued liabilities 261,682 194,055 Income taxes payable 1,892 24,121 Deferred taxes - 2,442 Current portion of long-term debt 233,827 331,103 Total current liabilities 619,208 667,530 NONCURRENT LIABILITIES: Long-term debt 1,033,689 727,489 Deferred taxes 272,077 221,411 Other liabilities 42,826 46,948 Total liabilities 1,967,800 1,663,378 STOCKHOLDERS' EQUITY: Common stock 919 910 Additional paid-in capital 798,486 757,318 Retained earnings 1,204,521 944,886 Accumulated other comprehensive earnings 21,513 108,732 Treasury stock (21,701) (22,040) Total stockholders' equity 2,003,738 1,789,806 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,971,538 $3,453,184 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, 2008 2007 2008 2007 Net sales $575,862 $560,084 $2,306,371 $2,102,049 Cost of sales 278,054 274,011 1,118,083 1,043,654 Gross profit 297,808 286,073 1,188,288 1,058,395 Selling, general and administrative expenses 178,753 162,264 702,127 620,041 Income from operations 119,055 123,809 486,161 438,354 Interest expense 16,847 12,238 53,680 52,195 Loss on extinguishment of debt - - 3,133 Other income/(expense) 5,169 (618) 6,607 (2,502) Earnings before income taxes 107,377 110,953 435,955 383,657 Income taxes 35,316 38,723 149,440 133,624 Net Earnings $72,061 $72,230 $286,515 $250,033 Earnings per share: Basic $0.80 $0.81 $3.20 $2.83 Diluted $0.78 $0.77 $3.06 $2.68 Weighted average common and common equivalent shares outstanding: Basic 89,726 88,698 89,468 88,390 Diluted 92,336 93,916 93,699 93,229 Roper Industries, Inc. and Subsidiaries Selected Segment Financial Data (unaudited) (Amounts in thousands and percents of net sales) Three months ended December 31, 2008 2007 Amount % Amount % Net sales: Industrial Technology 161,693 166,769 Energy Systems & Controls 137,576 155,376 Scientific & Industrial Imaging 93,336 99,121 RF Technology 183,257 138,818 Total $575,862 $560,084 Gross profit: Industrial Technology 79,985 49.5% 82,293 49.3% Energy Systems & Controls 71,413 51.9% 85,616 55.1% Scientific & Industrial Imaging 52,488 56.2% 54,032 54.5% RF Technology 93,922 51.3% 64,132 46.2% Total $297,808 51.7% $286,073 51.1% Operating profit*: Industrial Technology 41,643 25.8% 44,029 26.4% Energy Systems & Controls 30,250 22.0% 44,788 28.8% Scientific & Industrial Imaging 20,648 22.1% 19,777 20.0% RF Technology 39,885 21.8% 26,388 19.0% Total $132,426 23.0% $134,982 24.1% Net Orders: Industrial Technology 141,850 160,248 Energy Systems & Controls 138,919 149,288 Scientific & Industrial Imaging 93,937 99,735 RF Technology 184,046 149,979 Total $558,752 $559,250 Twelve months ended December 31, 2008 2007 Amount % Amount % Net sales: Industrial Technology 687,622 644,436 Energy Systems & Controls 548,214 516,420 Scientific & Industrial Imaging 375,542 376,163 RF Technology 694,993 565,030 Total $2,306,371 $2,102,049 Gross profit: Industrial Technology 333,704 48.5% 310,700 48.2% Energy Systems & Controls 295,133 53.8% 276,775 53.6% Scientific & Industrial Imaging 206,623 55.0% 206,661 54.9% RF Technology 352,828 50.8% 264,259 46.8% Total $1,188,288 51.5% $1,058,395 50.4% Operating profit*: Industrial Technology 178,270 25.9% 164,750 25.6% Energy Systems & Controls 126,609 23.1% 126,367 24.5% Scientific & Industrial Imaging 74,739 19.9% 73,230 19.5% RF Technology 159,787 23.0% 117,057 20.7% Total $539,405 23.4% $481,404 22.9% Net Orders: Industrial Technology 656,176 639,348 Energy Systems & Controls 541,472 525,899 Scientific & Industrial Imaging 383,543 377,653 RF Technology 722,670 575,100 Total $2,303,861 $2,118,000 * Operating profit is before unallocated corporate general and administrative expenses. These expenses were $13,371 and $11,173 for the three months ended December 31, 2008 and 2007, respectively, and $53,244 and $43,050 for the twelve months ended December 31, 2008 and 2007, respectively. Roper Industries, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited) (Amounts in thousands) Twelve months ended December 31, 2008 2007 Net earnings $286,515 $250,033 Depreciation 33,900 31,805 Amortization 69,208 61,375 Other, net 44,815 594 Cash provided by operating activities 434,438 343,807 Business acquisitions, net of cash acquired (705,244) (106,942) Capital expenditures (30,047) (30,107) Other, net (4,003) (5,339) Cash used by investing activities (739,294) (142,388) Debt borrowings, net 195,516 27,600 Issuance of common stock - - Dividends (25,887) (22,954) Other, net 18,290 24,902 Cash provided by financing activities 187,919 29,548 Effect of exchange rate changes on cash (13,762) 8,323 Net change in cash and equivalents (130,699) 239,290 Cash and equivalents, beginning of period 308,768 69,478 Cash and equivalents, end of period $178,069 $308,768
