SARASOTA, Fla., April 23 /PRNewswire-FirstCall/ -- Roper Industries, Inc. reported financial results for the first quarter ended March 31, 2009.
Net earnings for the first quarter were $52 million, or $0.56 per diluted share, which includes $0.03 for restructuring charges. Excluding restructuring charges, adjusted earnings per diluted share were $0.59 versus $0.67 in the first quarter 2008. Sales in the first quarter were $505 million, a 6.9% decrease over the same period in 2008, which includes a 6.8% increase from acquisitions, a 10.5% decline in organic growth and a negative 3.2% impact from foreign currency. Operating margin was 17.2%, or 17.9% excluding restructuring charges.
"We are pleased with the performance of our businesses and their ability to stay ahead of the curve in this difficult economy," said Brian Jellison, Roper's Chairman, President and CEO. "Our 50% gross margin demonstrates the value of our products and services to our customers. At the same time, the nimbleness of our leadership teams enabled us to successfully navigate lower order and sales levels in the quarter. We were able to achieve strong margin performance as a result of our lean cost structure and restructuring actions taken in 2008 and the first quarter of 2009."
"Organic sales were up 5% in our Radio Frequency (RF) segment with continued strong margin performance," continued Mr. Jellison. "Acquisitions completed during 2008 in the RF segment all performed in line with expectations and we are confident in their growth opportunities. In the other three segments, where organic sales were down 16% in total, decremental margins (change in operating profit divided by change in sales) were better than expected, down 41% including the cost of restructuring but down only 36% excluding restructuring charges."
"Orders declined in the quarter, particularly in those businesses in our Industrial Technology and Energy Systems and Controls segments. Orders were $472 million, down 15% from 2008. Although we currently expect second quarter orders to reflect a decline over the prior year, orders and quote activity in March and early April give us confidence that we will see second quarter orders improve meaningfully over the first quarter," said Mr. Jellison.
The tax rate in the first quarter was 29.3%, reflecting tax planning activities and a one-time $2.7 million benefit. Excluding this benefit, the tax rate would have been 33.0% compared to 35.0% in the first quarter of 2008. EBITDA, excluding restructuring, was 23.0% of sales. Net working capital as percent of first quarter annualized sales continued to improve. Operating cash flow was $51 million in the quarter. "We continue to generate significant cash flow and ended the first quarter with $178 million in cash, $473 million available under our revolver and Net Debt to EBITDA of 1.8X," said Mr. Jellison. "The acquisition pipeline remains full and we are in a strong position to deploy capital in our disciplined manner."
Outlook and Guidance
Mr. Jellison said, "Many end markets are weaker than we forecasted in the early part of 2009, however, we believe with the actions already taken and those still underway and assuming no further deterioration in the economy, we will achieve second quarter DEPS between $0.61 and $0.65 and full year DEPS between $2.60 and $2.80 as compared to $3.01 in 2008. Full year operating cash flow is expected to exceed 130% of net earnings." Based on current exchange rates, the Company expects negative 4% impact to second quarter revenue. The Company's guidance excludes the impact of restructuring costs and future acquisitions.
Prior-year results reflect the new accounting rules concerning convertible debt (FSP 14-1) which took effect January 1, 2009. Additional information is available in the Company's current report on Form 8-K dated April 21, 2009.
Table 1: Operating Margin (Millions) As Excluding Reported Restructuring --------- -------------- (1) Operating Income $86.8 $86.8 Restructuring Costs, All Segments n/a 3.8 --- --- (2) Adjusted Operating Income n/a 90.6 (3) Revenue 505.4 505.4 Operating Margin (1)/(3) 17.2% n/a Adjusted Operating Margin (2)/(3) n/a 17.9% Table 2: EBITDA (Millions) Q1 2009 ------- Net Earnings $52 Add: Interest Expense 14 Add: Income Taxes 21 Add: Depreciation and Amortization 26 -- EBITDA 113 === Add: Restructuring Expenses 4 - Adjusted EBITDA 117 === Table 3: Decremental Margin Excluding RF (Millions) As Excluding Reported Restructuring --------- -------------- (1) Change in Segment Operating Profit, Excluding RF ($31.3) ($31.3) Restructuring Costs, Excluding RF n/a 3.7 --- --- (2) Adjusted Change in Segment Operating Profit Excluding RF n/a (27.6) (3) Change in Revenue, Excluding RF (77.1) (77.1) Decremental Margin (1)/(3) 41% n/a Adjusted Decremental Margin (2)/(3) n/a 36% 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, April 24, 2009. The call can be accessed via webcast or by dialing +1 888-737-3699 (US/Canada) or +1 913-312-0861, using confirmation code 4028676. 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 4028676.
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) March 31, December 31, ASSETS 2009 2008 ----------------------------------------------------------------- CURRENT ASSETS: Cash and cash equivalents $177,509 $178,069 Accounts receivable 343,013 376,855 Inventories 186,724 185,919 Deferred taxes 28,659 29,390 Unbilled Receivables 64,318 61,168 Other current assets 43,659 26,906 ----------------------------------------------------------------- Total current assets 843,882 858,307 ----------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT, NET 107,832 112,463 ----------------------------------------------------------------- OTHER ASSETS: Goodwill 2,106,294 2,118,852 Other intangible assets, net 784,342 804,020 Deferred taxes 28,057 28,050 Other assets 50,461 49,846 ----------------------------------------------------------------- Total other assets 2,969,154 3,000,768 ----------------------------------------------------------------- TOTAL ASSETS $3,920,868 $3,971,538 ================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY ----------------------------------------------------------------- CURRENT LIABILITIES: Accounts payable $114,887 $121,807 Accrued liabilities 219,919 261,682 Income taxes payable - 1,892 Deferred taxes 313 - Current portion of long-term debt 149,527 233,526 ----------------------------------------------------------------- Total current liabilities 484,646 618,907 ----------------------------------------------------------------- NONCURRENT LIABILITIES: Long-term debt 1,084,523 1,033,689 Deferred taxes 268,395 272,182 Other liabilities 43,463 42,826 ----------------------------------------------------------------- Total liabilities 1,881,027 1,967,604 ----------------------------------------------------------------- STOCKHOLDERS' EQUITY: Common stock 927 919 Additional paid-in capital 826,921 815,736 Retained earnings 1,231,558 1,187,467 Accumulated other comprehensive earnings 2,014 21,513 Treasury stock (21,579) (21,701) ----------------------------------------------------------------- Total stockholders' equity 2,039,841 2,003,934 ----------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,920,868 $3,971,538 ================================================================= Roper Industries, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings (unaudited) (Amounts in thousands, except per share data) Three months ended March 31, ------------------ 2009 2008 (1) ------------------------------------------------------------ Net sales $505,444 $542,995 Cost of sales 254,308 266,605 ------------------------------------------------------------ Gross profit 251,136 276,390 Selling, general and administrative expenses 164,344 168,124 ------------------------------------------------------------ Income from operations 86,792 108,266 Interest expense 13,509 13,964 Other income/(expense) (356) 1,777 ------------------------------------------------------------ Earnings from continuing operations before income taxes 72,927 96,079 Income taxes 21,368 33,628 ------------------------------------------------------------ Net Earnings $51,559 $62,451 ============================================================ Earnings per share: Basic $0.57 $0.70 Diluted $0.56 $0.67 Weighted average common and common equivalent shares outstanding: Basic 90,134 89,037 Diluted 92,303 93,447 ============================================================ (1) - 2008 results have been restated due to the adoption of FSP APB 14-1 which increased interest expense resulting from the amortization of the equity component of our convertible notes. See the Company's 8-K dated April 21, 2009 for additional quarterly information for 2007 and 2008. Roper Industries, Inc. and Subsidiaries Selected Segment Financial Data (unaudited) (Amounts in thousands and percents of net sales) Three months ended March 31, ----------------------------- 2009 2008 ------------ ------------- Amount % Amount % ----------------------------------------------------------------------- Net sales: Industrial Technology $130,641 $173,617 Energy Systems & Controls 106,611 128,387 Scientific & Industrial Imaging 84,120 96,443 RF Technology 184,072 144,548 ----------------------------------------------------------------------- Total $505,444 $542,995 ======================================================================= Gross profit: Industrial Technology $62,709 48.0% $84,667 48.8% Energy Systems & Controls 55,363 51.9% 68,674 53.5% Scientific & Industrial Imaging 45,750 54.4% 53,588 55.6% RF Technology 87,314 47.4% 69,461 48.1% ---------------------------------------------------------------------- Total $251,136 49.7% $276,390 50.9% ======================================================================= Operating profit*: Industrial Technology $28,583 21.9% $45,269 26.1% Energy Systems & Controls 17,519 16.4% 28,241 22.0% Scientific & Industrial Imaging 16,081 19.1% 20,015 20.8% RF Technology 37,383 20.3% 28,029 19.4% ----------------------------------------------------------------------- Total $99,566 19.7% $121,554 22.4% ======================================================================= Operating profit excluding restructuring*: Industrial Technology $30,377 23.3% $45,269 26.1% Energy Systems & Controls 18,911 17.7% 28,241 22.0% Scientific & Industrial Imaging 16,634 19.8% 20,015 20.8% RF Technology 37,482 20.4% 28,029 19.4% ----------------------------------------------------------------------- Total $103,404 20.5% $121,554 22.4% ======================================================================= Net Orders: Industrial Technology $139,393 $185,011 Energy Systems & Controls 97,814 128,336 Scientific & Industrial Imaging 76,599 97,700 RF Technology 157,783 146,956 ----------------------------------------------------------------------- Total $471,589 $558,003 ======================================================================= * Operating profit is before unallocated corporate general and administrative expenses. These expenses were $12,774 and $13,288 for the three months ended March 31, 2009 and 2008, respectively. Roper Industries, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited) (Amounts in thousands) Three months ended March 31, 2009 2008 Net earnings $51,559 $62,451 Depreciation 8,769 7,994 Amortization 17,457 15,527 Other, net (27,208) (14,379) Cash provided by operating activities 50,577 71,593 Business acquisitions, net of cash acquired (683) (377,634) Capital expenditures (5,228) (6,380) Other, net (963) (833) Cash used by investing activities (6,874) (384,847) Debt borrowings (payments), net (35,180) 154,288 Dividends (7,394) (6,428) Other, net 1,680 4,525 Cash provided by (used by) financing activities (40,894) 152,385 Effect of exchange rate changes on cash (3,369) 3,301 Net increase (decrease) in cash and equivalents (560) (157,568) Cash and equivalents, beginning of period 178,069 308,768 Cash and equivalents, end of period $177,509 $151,200
Roper Industries, Inc.
CONTACT: Investor Relations, +1-941-556-2601,
investor-relations@roperind.com
Web Site: http://www.roperind.com/
