Business News

Roper Industries Announces Results for 2009 First Quarter

Friday 24. April 2009 - Organic Growth in RF Segment and Acquisition Performance Partially Offset Decline in Industrial and Energy Segments

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.