ROPER TECHNOLOGIES INC - FORM 8-K - EX-99.1

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8-K - ROPER TECHNOLOGIES INC	cover8k.htm

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Investor Relations

941-556-2601

investor-relations@roperind.com

Roper Industries, Inc.

Roper Industries Announces Results For 2009 Third Quarter

Orders Increased Sequentially; Net Earnings Were $56 Million;

Operating Cash Flow Reached $87 Million

Sarasota, Florida, October 26, 2009 ... Roper Industries, Inc. (NYSE: ROP) reported financial results for the third quarter ended September 30, 2009.

Net earnings for the third quarter were $56 million, or $0.61 per diluted share. Excluding restructuring expenses, adjusted net earnings were $58 million, or $0.63 per diluted share. Sales during the quarter were $486 million, an 18% decrease compared to the same period in 2008. Orders were $499 million, and represented 103% of sales, marking the first time since the second quarter of 2008 that orders exceeded sales. Operating cash flow was $87 million, or 18% of revenue, bringing year-to-date operating cash flow to $248 million. Free cash flow (operating cash flow less capital expenditures) during the quarter was $81 million, representing 143% of net income in the quarter. Year-to-date free cash flow is $229 million, or 137% of year-to-date net income.

“More than half our businesses experienced greater than 10% growth in orders over the second quarter, and this improvement in order momentum is expected to continue in the fourth quarter,” said Brian Jellison, Roper’s Chairman, President and CEO. “Although sales in the quarter were 4% lower than second quarter levels, in part due to some orders shifting to the fourth quarter, we were pleased with the performance of our businesses in terms of margins, cost controls and cash flow. In addition, we increased cash and liquidity during the quarter with a successful $500 million 10-year bond offering that increases our flexibility as we pursue strategic acquisition opportunities.”

Operating margin was 18.9% in the quarter, or 19.5% excluding restructuring costs. Decremental margin (change in operating profit divided by change in sales), excluding the RF segment was 34% in the quarter, including the cost of restructuring, and 31% excluding restructuring costs. “Our decremental margin performance again demonstrated the success of our operating model, with its focus on breakeven analysis and quick payback restructuring actions,” Mr. Jellison concluded.

Outlook and Guidance

Roper expects full year operating cash flow to be in excess of $350 million. Adjusting for the additional interest costs related to the recent bond offering, the Company now expects full-year earnings per diluted share between $2.57 and $2.63, which excludes the impact of restructuring costs and future acquisitions.

Table 1: Sequential Income Statement (Millions)

	Q3 2009	Q2 2009

Net Orders	$499	$489
Net Sales	486	505
Cost of Sales	240	250
Gross Profit	$246	$255
Selling, General & Administrative Expenses	154	159
Operating Profit	$92	$96

Table 2: Operating Margin (Millions)

		Q3 2009

(1)	Operating Profit	$91.9
	Restructuring Costs, All Segments	2.7
(2)	Adjusted Operating Profit	$94.6

(3)	Revenue	$486

	Operating Margin (1)/(3)	18.9%
	Adjusted Operating Margin (2)/(3)	19.5%

Table 3: Sales Growth

	Q3 2009
Organic Growth	(19%)
Acquisitions / Divestitures	2%
Foreign Currency (FX)	(1%)
Total Sales Growth	(18%)

Conference Call to be Held at 8:30 AM (ET) October 26, 2009

A conference call to discuss these results has been scheduled for 8:30 AM ET on Monday, October 26, 2009. The call can be accessed via webcast or by dialing +1 800-967-7141 (US/Canada) or +1 719-457-2638, using confirmation code 6889450. 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 +1 888-203-1112 (US/Canada) or +1 719-457-0820 and using the access code 6889450.

About Roper Industries

Roper Industries is a diversified growth company 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 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)


	September 30,			December 31,
ASSETS	2009			2008

CURRENT ASSETS:
Cash and cash equivalents	$	256,024		$	178,069
Accounts receivable		323,959			376,855
Inventories		174,055			185,919
Deferred taxes		27,540			29,390
Unbilled receivable		60,344			61,168
Other current assets		65,572			26,906
Total current assets		907,494			858,307

PROPERTY, PLANT AND EQUIPMENT, NET		104,748			112,463

OTHER ASSETS:
Goodwill		2,142,765			2,118,852
Other intangible assets, net		759,241			804,020
Deferred taxes		31,190			28,050
Other assets		56,383			49,846
Total other assets		2,989,579			3,000,768

TOTAL ASSETS	$	4,001,821		$	3,971,538


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	100,561		$	121,807
Accrued liabilities		224,483			261,682
Income taxes payable		-			1,892
Deferred taxes		1,079			-
Current portion of long-term debt		119,852			233,526
Total current liabilities		445,975			618,907

NONCURRENT LIABILITIES:
Long-term debt		1,004,357			1,033,689
Deferred taxes		286,352			272,182
Other liabilities		42,662			42,826
Total liabilities		1,779,346			1,967,604

STOCKHOLDERS' EQUITY:
Common stock		931			919
Additional paid-in capital		846,966			815,736
Retained earnings		1,332,555			1,187,467
Accumulated other comprehensive earnings		63,425			21,513
Treasury stock		(21,402	)		(21,701	)
Total stockholders' equity		2,222,475			2,003,934

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,001,821		$	3,971,538

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)


	Three months ended					Nine months ended
	September 30,					September 30,
	2009		2008			2009		2008

Net sales	$	485,676	$	593,100		$	1,496,030	$	1,730,509
Cost of sales		240,156		284,340			744,304		840,029

Gross profit		245,520		308,760			751,726		890,480

Selling, general and administrative expenses		153,648		176,461			477,098		523,374

Income from operations		91,872		132,299			274,628		367,106

Interest expense		14,437		16,122			41,708		42,141
Other income (expense)		105		(2,836	)		2,917		(1,695	)

Earnings from continuing operations before
income taxes		77,540		113,341			235,837		323,270

Income taxes		21,130		39,312			68,280		112,267

Net Earnings	$	56,410	$	74,029		$	167,557	$	211,003



Earnings per share:
Basic	$	0.62	$	0.83		$	1.85	$	2.36
Diluted	$	0.61	$	0.79		$	1.81	$	2.24

Weighted average common and common
equivalent shares outstanding:
Basic		90,877		89,629			90,526		89,381
Diluted		92,908		94,251			92,635		94,026

Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)


	Three months ended September 30,										Nine months ended September 30,
	2009					2008					2009					2008
	Amount		%			Amount		%			Amount		%			Amount		%
Net sales:
Industrial Technology	$	130,538				$	169,065				$	397,730				$	525,929
Energy Systems & Controls		102,988					137,535					314,997					410,638
Scientific & Industrial Imaging		78,934					94,610					238,914					282,206
RF Technology		173,216					191,890					544,389					511,736
Total	$	485,676				$	593,100				$	1,496,030				$	1,730,509


Gross profit:
Industrial Technology	$	62,060		47.5	%	$	82,215		48.6	%	$	190,501		47.9	%	$	253,719		48.2	%
Energy Systems & Controls		52,464		50.9	%		75,172		54.7	%		164,123		52.1	%		223,720		54.5	%
Scientific & Industrial Imaging		44,169		56.0	%		51,457		54.4	%		132,385		55.4	%		154,135		54.6	%
RF Technology		86,827		50.1	%		99,916		52.1	%		264,717		48.6	%		258,906		50.6	%
Total	$	245,520		50.6	%	$	308,760		52.1	%	$	751,726		50.2	%	$	890,480		51.5	%


Operating profit*:
Industrial Technology	$	30,547		23.4	%	$	43,767		25.9	%	$	91,614		23.0	%	$	136,627		26.0	%
Energy Systems & Controls		19,214		18.7	%		32,541		23.7	%		59,926		19.0	%		96,359		23.5	%
Scientific & Industrial Imaging		14,818		18.8	%		18,746		19.8	%		43,300		18.1	%		54,091		19.2	%
RF Technology		38,918		22.5	%		50,191		26.2	%		115,724		21.3	%		119,902		23.4	%
Total	$	103,497		21.3	%	$	145,245		24.5	%	$	310,564		20.8	%	$	406,979		23.5	%


Operating profit excluding restructuring*:
Industrial Technology	$	31,494		24.1	%	$	43,767		25.9	%	$	95,931		24.1	%	$	136,627		26.0	%
Energy Systems & Controls		20,503		19.9	%		32,541		23.7	%		63,739		20.2	%		96,359		23.5	%
Scientific & Industrial Imaging		15,195		19.3	%		18,746		19.8	%		44,797		18.8	%		54,091		19.2	%
RF Technology		38,976		22.5	%		50,191		26.2	%		116,542		21.4	%		119,902		23.4	%
Total	$	106,168		21.9	%	$	145,245		24.5	%	$	321,009		21.5	%	$	406,979		23.5	%

Net Orders:
Industrial Technology	$	125,776				$	163,442				$	391,049				$	514,326
Energy Systems & Controls		104,593					134,970					298,551					402,553
Scientific & Industrial Imaging		84,329					102,933					235,433					289,606
RF Technology		184,243					179,274					534,251					538,624
Total	$	498,941				$	580,619				$	1,459,284				$	1,745,109



* Operating profit is before unallocated corporate general and administrative expenses. These expenses
were $11,625 and $12,946 for the three months ended September 30, 2009 and 2008, respectively, and
$35,936 and $39,873 for the nine months ended September 30, 2009 and 2008, respectively.

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)


	Nine months ended
	September 30,
	2009			2008

Net earnings	$	167,557		$	211,003
Non-cash items:
Depreciation		25,828			24,775
Amortization		51,280			50,588
Stock-based compensation expense		20,821			22,848
Income taxes		(24,146	)		2,602
Changes in assets and liabilities:
Receivables		54,127			(5,517	)
Inventory		14,496			(12,157	)
Accounts payable		(22,354	)		5,358
Accrued liabilities		(42,375	)		2,234
Other, net		2,615			3,805
Cash provided by operating activities		247,849			305,539

Business acquisitions, net of cash acquired		(1,248	)		(701,935	)
Capital expenditures		(18,708	)		(20,787	)
Other, net		6,983			(4,084	)
Cash used by investing activities		(12,973	)		(726,806	)

Principal debt borrowings		500,000			850,000
Principal debt payments		(466,186	)		(957,745	)
Revolver borrowings (payments), net		(179,000	)		393,000
Debt issuance costs		(4,310	)		(10,169	)
Dividends		(22,343	)		(19,393	)
Excess tax benefit from share-based payment		1,055			4,688
Proceeds from exercise of stock options		4,845			10,050
Other, net		(604	)		918
Cash provided by (used by) financing activities		(166,543	)		271,349

Effect of exchange rate changes on cash		9,622			(2,578	)

Net increase (decrease) in cash and equivalents		77,955			(152,496	)
Cash and equivalents, beginning of period		178,069			308,768

Cash and equivalents, end of period	$	256,024		$	156,272

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