SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 28, 2004
ROPER INDUSTRIES, INC.
DELAWARE
| 1-12273 | 51-0263969 | |
| (COMMISSION FILE NUMBER) | (IRS EMPLOYER IDENTIFICATION NO.) | |
| 2160 SATELLITE BLVD., SUITE 200, DULUTH, GEORGIA | 30097 | |
| (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) | (ZIP CODE) | |
(770) 495-5100
160 BEN BURTON ROAD, BOGART, GEORGIA 30622
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
| (a) | Financial Statements of Business Acquired | |
| Not Applicable | ||
| (b) | Pro Forma Financial Statements | |
| Not Applicable | ||
| (c) | Exhibits | |
| 99.1 Press Release of the Company dated April 28, 2004. |
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 28, 2004, Roper Industries, Inc. (“the Company”)
issued the press release containing information about the Company’s results of operations for the
first quarter ended March 31, 2004. A copy of the press release is furnished as Exhibit 99.1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Roper Industries, Inc. | |||||||
| (Registrant) | |||||||
| BY: /s/ Martin S. Headley | |||||||
| Martin S. Headley, Vice President, Chief Financial Officer |
Date: April 28, 2004 | ||||||
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Press Release of the Company dated April 28, 2004 |
Roper Industries, Inc.
Contact Information:
Chris Hix
Director of Investor Relations
+1 (770) 495-5100
investor-relations@roperind.com
FOR IMMEDIATE RELEASE
Roper Industries Reports First Quarter 2004 Results
Sales, Earnings Exceed
Forecast;
Cash Flow More than Doubles;
Organic Growth Expands
Duluth, Georgia, April 28, 2004 .... Roper Industries, Inc. (NYSE: ROP) reported diluted earnings per share (DEPS) of $0.49 in the first quarter of 2004, 23% higher than the prior year quarter DEPS of $0.40. Excluding inventory revaluation costs relating to its December 2003 acquisition of Neptune Technology Group Holdings, Inc. (NTGH), the Company reported DEPS of $0.52, versus previously issued guidance of $0.43-$0.47.
Reflecting the acquisition of NTGH and strong organic growth, the Company reported $221 million of net sales in the first quarter, 48% higher than the first quarter of 2003. The Company had previously issued sales guidance of $200-$215 million. The Company reported first quarter net orders of $220 million exceeded the prior year quarter by 53%.
“We are delighted all four business segments reported solid organic growth in the first quarter,” said Brian Jellison, Chairman, President and CEO of Roper Industries. “We continue to benefit from the growth initiatives that we began launching early last year. As expected, NTGH also contributed significantly to our results.”
During the first quarter, the Company produced $46 million of adjusted EBITDA, excluding NTGH inventory revaluation costs and restructuring charges. Adjusted EBITDA margins increased to 21% of net sales, versus prior year margins of 18%. “Our restructuring efforts are now complete. With our high operating leverage, we expect sequentially higher sales in the second quarter will further increase margins and earnings,” commented Mr. Jellison.
Roper reported cash from operating activities of $26 million during the quarter, a 120% year-over-year increase, and said it expects cash flow to continue to grow in the second quarter. “Our cash return on investment metric is helping to drive higher cash results, with our business leaders working to improve both cash earnings and asset efficiency,” said Mr. Jellison. The Company reported that its net debt-to-net capital ratio improved to 43.7% at the end of the quarter from 47.0% at the beginning of the year.
The Company reaffirmed its second quarter DEPS forecast of $0.57-$0.63, and raised the lower end of its full year DEPS guidance, excluding NTGH inventory revaluation costs, from $2.45-$2.70 to $2.50-$2.70. “Our increasing organic growth, and our focus on working capital velocity and EBITDA margins, are expected to increase operating cash flows by as much as two-thirds this year over the prior year,” said Mr. Jellison. “We have never been better positioned to execute our growth strategy.”
First Quarter Results by Segment
All comparisons are made against the year-ago period unless otherwise stated.
The Instrumentation segment posted $49 million of net sales, a 16% increase driven by continued strength in certain petroleum and materials testing markets along with favorable currency effects. Net orders improved 21% to $48 million. Operating profits increased 23% to over $9 million due to higher sales and the absence of restructuring costs, and operating margins improved 120 basis points to 19%.
Energy Systems & Controls segment first quarter net sales were $32 million or 16% higher, and net orders increased 49% to $34 million on significantly higher orders for oil & gas and power utility maintenance customers. As a result of higher net sales, operating profit increased 35% to $5 million, and operating margins improved 220 basis points to 15%.
The Industrial Technology segment reported net sales of $93 million in the first quarter, 132% higher due primarily to contributions from NTGH, growth in energy and refrigeration markets, and foreign exchange translation benefits. First quarter net orders improved 115% to $93 million. The segment produced $16 million of operating profit during the quarter and over $23 million of adjusted EBITDA, which reflects $5 million of depreciation and amortization and excludes approximately $3 million of NTGH inventory revaluation costs and restructuring charges. Adjusted EBITDA margins climbed 90 basis points to 25%.
Scientific & Industrial Imaging segment net sales rose 19% to $46 million, including contributions from the NTGH acquisition and favorable currency benefits. Net orders also increased 19% with gains made in nearly all market segments. Operating profits reached $7 million, and adjusted EBITDA, which reflects $1 million of depreciation and amortization and excludes minor NTGH inventory revaluation costs and restructuring charges, were nearly $9 million. Adjusted EBITDA margins remained steady at 19%.
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 Thursday, April 29, 2004. The call can be accessed via webcast or by dialing (800) 811-0667 (US/Canada) or +1 (913) 981-4901, using confirmation code 634029. Webcast information and conference call materials will be made available in the “Investor Information” 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 passcode 634029.
Table 1: Supplemental DEPS Information
| Q1 2004 |
Q1 2003 |
|||||||
|---|---|---|---|---|---|---|---|---|
| DEPS before NTGH inventory revaluation costs | $ | 0.52 | $ | 0.40 | ||||
| NTGH inventory revaluation costs ($1.8mm, pre-tax) | (0.03 | ) | -- | |||||
| DEPS as reported | $ | 0.49 | $ | 0.40 | ||||
Table 2: Net Debt-to-Net Capital Ratio (Millions)
| March 31, 2004 |
December 31, 2003 |
|||||||
|---|---|---|---|---|---|---|---|---|
| Total debt | $ | 624 | $ | 651 | ||||
| Less: Cash | (82 | ) | (70 | ) | ||||
| Equals: Net debt | 542 | 581 | ||||||
| Add: Shareholders' equity | 699 | 656 | ||||||
| Equals: Net capital | $ | 1,241 | $ | 1,237 | ||||
| Net debt divided by Net capital | 43.7% | 47.0% | ||||||
Table 3: EBITDA (Millions)
| Q1 2004 |
Q1 2003 |
|||||||
|---|---|---|---|---|---|---|---|---|
| Net earnings | $ | 18.1 | $ | 12.8 | ||||
| Depreciation & amortization expense | 9.7 | 3.9 | ||||||
| Interest expense | 6.9 | 4.2 | ||||||
| Income tax expense | 8.0 | 5.7 | ||||||
| EBITDA | $ | 42.7 | $ | 26.6 | ||||
| NTGH inventory revaluation costs | 1.8 | -- | ||||||
| Restructuring costs | 1.2 | 0.9 | ||||||
| Adjusted EBITDA | $ | 45.7 | $ | 27.5 | ||||
About Roper Industries
Roper Industries is a diversified industrial growth company providing engineered products and solutions for global niche markets. Additional information about Roper Industries, including registration for Company’s press releases via email, is available on the Company’s website, 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 the benefits we hope to realize from the NTGH acquisition, our ability to make future strategic acquisitions, our ability to execute our growth program, and our ability to achieve improved financial performance. These statements reflect management’s current beliefs and are not guarantees of performance. They involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward looking statement. Such risks and uncertainties include our ability to integrate the NTGH acquisition and realize expected synergies, any unforeseen liabilities associated with the NTGH acquisition, limitations on our business imposed by our indebtedness, reductions in our business with Gazprom, unfavorable changes in foreign exchange rates, difficulties associated with exports, risks and costs associated with our international sales and operations, difficulties in making and integrating acquisitions, product liability and insurance risks and costs, our ability to achieve anticipated benefits from the realignment of our operating structure, the cyclical nature of our business, future competition, changes in the supply of, or price for, parts and components, environmental compliance costs and liabilities, and potential write-offs of our substantial intangible assets. Other important risk factors are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, and may be discussed in 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, 2004 |
December 31, 2003 |
|||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 82,357 | $ | 70,234 | ||||
| Accounts receivable | 157,180 | 150,856 | ||||||
| Inventories | 109,500 | 107,082 | ||||||
| Deferred taxes | 33,814 | 33,314 | ||||||
| Other current assets | 15,990 | 19,706 | ||||||
| Total current assets | 398,841 | 381,192 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 76,340 | 78,461 | ||||||
| OTHER ASSETS: | ||||||||
| Goodwill | 711,664 | 711,158 | ||||||
| Other intangible assets, net | 295,154 | 298,669 | ||||||
| Deferred taxes | 2,121 | 6,034 | ||||||
| Other assets | 38,825 | 39,481 | ||||||
| Total other assets | 1,047,764 | 1,055,342 | ||||||
| TOTAL ASSETS | $ | 1,522,945 | $ | 1,514,995 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 46,834 | $ | 45,412 | ||||
| Accrued liabilities | 81,156 | 93,523 | ||||||
| Deferred taxes | 1,640 | 1,639 | ||||||
| Current portion of long-term debt | 20,149 | 20,923 | ||||||
| Total current liabilities | 149,779 | 161,497 | ||||||
| NONCURRENT LIABILITIES: | ||||||||
| Long-term debt | 604,160 | 630,186 | ||||||
| Deferred taxes | 52,103 | 50,187 | ||||||
| Other liabilities | 17,655 | 17,344 | ||||||
| Total liabilities | 823,697 | 859,214 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock | 380 | 372 | ||||||
| Additional paid-in capital | 324,996 | 293,402 | ||||||
| Retained earnings | 351,112 | 336,520 | ||||||
| Accumulated other comprehensive earnings | 46,149 | 48,989 | ||||||
| Treasury stock | (23,389 | ) | (23,502 | ) | ||||
| Total stockholders' equity | 699,248 | 655,781 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,522,945 | $ | 1,514,995 | ||||
Roper Industries, Inc.
and Subsidiaries
Condensed
Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)
| Three months ended March 31, |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
|||||||
| Net sales | $ | 220,640 | $ | 149,443 | ||||
| Cost of sales | 111,202 | 70,752 | ||||||
| Gross profit | 109,438 | 78,691 | ||||||
| Selling, general and administrative expenses | 76,466 | 55,410 | ||||||
| Income from operations | 32,972 | 23,281 | ||||||
| Interest expense | 6,903 | 4,253 | ||||||
| Other income/(expense) | 23 | (30 | ) | |||||
| Earnings from continuing operations before | ||||||||
| income taxes | 26,092 | 18,998 | ||||||
| Income taxes | 7,958 | 5,701 | ||||||
| Earnings from continuing operations | 18,134 | 13,297 | ||||||
| Loss from discontinued operations, net of tax benefit | ||||||||
| of $0 and $240, respectively | 0 | 500 | ||||||
| Net Earnings | $ | 18,134 | $ | 12,797 | ||||
| Earnings per share: | ||||||||
| Basic: | ||||||||
| Earnings from continuing operations | $ | 0.49 | $ | 0.42 | ||||
| Loss from discontinued operations | $ | -- | $ | (0.02 | ) | |||
| Net Earnings | $ | 0.49 | $ | 0.41 | ||||
| Diluted: | ||||||||
| Earnings from continuing operations | $ | 0.49 | $ | 0.42 | ||||
| Loss from discontinued operations | $ | -- | $ | (0.02 | ) | |||
| Net Earnings | $ | 0.49 | $ | 0.40 | ||||
| Weighted average common and common | ||||||||
| equivalent shares outstanding: | ||||||||
| Basic | 36,706 | 31,402 | ||||||
| Diluted | 37,286 | 31,715 | ||||||
Roper Industries, Inc.
and Subsidiaries
Selected
Segment Financial Data (unaudited)
(Amounts
in thousands and percents of net sales)
| Three months ended March 31, |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
|||||||||||||
| Amount |
% |
Amount |
% |
|||||||||||
| Net sales: | ||||||||||||||
| Instrumentation | $ | 49,125 | $ | 42,522 | ||||||||||
| Industrial Technology | 93,118 | 40,166 | ||||||||||||
| Energy Systems & Controls | 32,077 | 27,755 | ||||||||||||
| Scientific & Industrial Imaging | 46,320 | 39,000 | ||||||||||||
| Total | $ | 220,640 | $ | 149,443 | ||||||||||
| Gross profit: | ||||||||||||||
| Instrumentation | $ | 29,231 | 59.5% | $ | 24,903 | 58.6% | ||||||||
| Industrial Technology | 37,485 | 40.3% | 18,589 | 46.3% | ||||||||||
| Energy Systems & Controls | 17,618 | 54.9% | 14,727 | 53.1% | ||||||||||
| Scientific & Industrial Imaging | 25,104 | 54.2% | 20,472 | 52.5% | ||||||||||
| Total | $ | 109,438 | 49.6% | $ | 78,691 | 52.7% | ||||||||
| Operating profit*: | ||||||||||||||
| Instrumentation | $ | 9,395 | 19.1% | $ | 7,608 | 17.9% | ||||||||
| Industrial Technology | 15,727 | 16.9% | 8,789 | 21.9% | ||||||||||
| Energy Systems & Controls | 4,801 | 15.0% | 3,560 | 12.8% | ||||||||||
| Scientific & Industrial Imaging | 6,995 | 15.1% | 6,321 | 16.2% | ||||||||||
| Total | $ | 36,918 | 16.7% | $ | 26,278 | 17.6% | ||||||||
| Net Orders: | ||||||||||||||
| Instrumentation | $ | 48,428 | $ | 39,928 | ||||||||||
| Industrial Technology | 92,695 | 43,066 | ||||||||||||
| Energy Systems & Controls | 33,894 | 22,822 | ||||||||||||
| Scientific & Industrial Imaging | 45,070 | 37,759 | ||||||||||||
| Total | $ | 220,087 | $ | 143,575 | ||||||||||
| * | Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $3,946 and $2,997 for the three months ended March 31, 2004 and 2003, respectively. |
Roper Industries, Inc.
and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts
in thousands)
| Three months ended March 31, |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 |
|||||||
| Net earnings | $ | 18,134 | $ | 12,797 | ||||
| Depreciation | 4,478 | 2,762 | ||||||
| Amortization | 5,226 | 1,119 | ||||||
| Other, net | (2,255 | ) | (5,053 | ) | ||||
| Cash provided by operating activities | 25,583 | 11,625 | ||||||
| Business acquisitions, net of cash acquired | (12,042 | ) | (100 | ) | ||||
| Capital expenditures | (2,546 | ) | (2,746 | ) | ||||
| Other, net | (483 | ) | (755 | ) | ||||
| Cash used by investing activities | (15,071 | ) | (3,601 | ) | ||||
| Debt borrowings (payments), net | (25,780 | ) | (2,786 | ) | ||||
| Issuance of common stock | 28,879 | -- | ||||||
| Dividends | (3,542 | ) | (2,753 | ) | ||||
| Other, net | 2,656 | 1,204 | ||||||
| Cash provided (used) by financing activities | 2,213 | (4,335 | ) | |||||
| Effect of exchange rate changes on cash | (602 | ) | 584 | |||||
| Net increase in cash and equivalents | 12,123 | 4,273 | ||||||
| Cash and equivalents, beginning of period | 70,234 | 15,270 | ||||||
| Cash and equivalents, end of period | $ | 82,357 | $ | 19,543 | ||||