Contact Information: Investor Relations 941-556-2601 investor-relations@roperind.com | Roper Industries, Inc. |
Roper Industries Announces Results For 2009 First Quarter
Organic Growth in RF Segment and Acquisition Performance Partially Offset Decline in Industrial and Energy Segments
Sarasota, Florida, April 23, 2009 ... Roper Industries, Inc. (NYSE: ROP) 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 Reported | Excluding 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 Reported | Excluding 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 (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 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.
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(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.
* 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.
