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Roper Industries Announces Results For 2009 Fourth Quarter and Full Year

Wednesday, February 3, 2010 General News J E 4
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Fourth Quarter Net Earnings Per Diluted Share of $0.77

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
                                         -------  -------
    Organic Growth                           (8%)    (14%)
    Acquisitions / Divestitures                2%      4%
    Foreign Currency                           2%     (1%)
                                             ---     ----
    Total Sales Growth                       (4%)    (11%)
                                            ====    =====
    
    
    Table 2:  Free Cash Flow (millions)
                                         FY 2009
                                         -------
    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 
    -----------------------------------------------------------------------
        Total current assets                         870,745       858,307 
    -----------------------------------------------------------------------
                                                                           
    PROPERTY, PLANT AND EQUIPMENT, NET               109,493       112,463 
    -----------------------------------------------------------------------
                                                                           
    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 
    -----------------------------------------------------------------------
        Total other assets                         3,347,498     3,000,768 
    -----------------------------------------------------------------------
                                                                          
    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 
    -----------------------------------------------------------------------
        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 
    -----------------------------------------------------------------------
        Total liabilities                          1,906,246     1,967,604 
    -----------------------------------------------------------------------
                                                                           
    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 
    -----------------------------------------------------------------------
                                                                           
    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
    -----------------------------------------------------------------------
        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%
    -----------------------------------------------------------------------
        Total                       $291,412     52.6%  $297,808     51.7%
    =======================================================================
    
    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%
    -----------------------------------------------------------------------
        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%
    -----------------------------------------------------------------------
        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
    ----------------------------------------------------------------------- 
        Total                       $564,725            $558,752          
    =======================================================================
    
    
    
                                         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
    ----------------------------------------------------------------------- 
        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%
    -----------------------------------------------------------------------
        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%
    -----------------------------------------------------------------------
        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%
    -----------------------------------------------------------------------
        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
    -----------------------------------------------------------------------
        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 
    ----------------------------------------------------------------------
      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 
    ----------------------------------------------------------------------
                                                                        
    Cash and equivalents, end of period            $167,708      $178,069 
    ====================================================================== 
    

SOURCE Roper Industries, Inc.

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