Roper Industries Announces Record Third Quarter Results

Record Q3 Sales, Orders, Backlog, Net Earnings

SARASOTA, Fla., Oct. 23 /PRNewswire-FirstCall/ -- Roper Industries, Inc.
(NYSE: ROP) reported results for its third quarter ended September 30, 2008.
Reported net earnings were $75 million, up from $65 million in the prior
year. Results for the quarter include a previously disclosed $2 million
non-cash, after-tax charge for the early termination of the Company's secured
credit facility, which was replaced in July with a new senior unsecured credit
facility. Excluding this charge, reported net earnings were $77 million and
diluted earnings per share (DEPS) were $0.82, consistent with the Company's
guidance and up from $0.70 in the prior year. Reported DEPS including the
charge were $0.80.
Net sales in the quarter were $593 million, an increase of 11% compared to
the 2007 third quarter. Backlog increased 16% from the prior year to $617
million, reflecting the benefit from acquisitions and continued internal
growth. Net orders increased 9% to $581 million. Operating margin expanded
100 basis points to 22.3% in the quarter. Operating cash flow in the third
quarter increased to $138 million, representing 184% of net earnings. Year to
date operating cash flow increased 35% to $306 million.
"We are very pleased by Roper's operating performance and strategic
accomplishments in the third quarter," said Brian Jellison, Roper's Chairman,
President and CEO. "For the third consecutive quarter, we have increased
revenue by 10%, excluding the impact of foreign exchange. Despite difficult
prior year comparables and interruptions from Hurricane Ike to our Houston
based Energy segment businesses we were able to generate 4% organic growth in
these difficult markets. We expect this combination of organic growth and
sales generated by this year's acquisitions will continue to provide revenue
growth in the fourth quarter. During the quarter our businesses generated
record cash flow and margins continued to expand, reflecting our disciplined
cost management. Although we remain focused on the macroeconomic challenges
and expected weakness in the global economy, we remain optimistic that we can
continue to balance growth through our organic initiatives and proven
acquisition process."
Acquisitions
During the quarter, Roper acquired Technolog, the leading UK provider of
specialty electronic products and services for the water, gas and electricity
markets, further expanding the reach of its RF segment in the global utilities
market. The Company also acquired Horizon Software International, the leading
provider of comprehensive software solutions for meal planning and cashless
transactions for the K-12 education market, adding to its growing CBORD
business acquired in February, 2008.
Balance Sheet Strengthened
"As a result of the strength of our businesses and consistent cash flow
generation, we were able to strategically restructure our debt during the
quarter. We negotiated an unsecured credit facility, were upgraded to
investment grade and successfully completed a public debt offering," continued
Mr. Jellison.
On August 4, 2008, Roper completed the public offering of $500 million of
6.625% Notes due 2013. The net proceeds from the offering were used to repay
a portion of the $750 million revolving credit line established July 7, 2008,
under Roper's new senior unsecured credit facility.
"Roper's ability to complete this offering in one of the most difficult
credit markets we have seen reflects the considerable strength of our
businesses and our balance sheet. We are very pleased to have achieved an
investment grade rating and have ample financial resources to continue
executing our business model despite the highly volatile environment," Mr.
Jellison said. The Company ended the third quarter with $156 million cash on
hand and over $435 million of undrawn capacity in its revolving credit
facility.
Debt Extinguishment Charge
As previously announced, third quarter results include a $2 million
non-cash after-tax charge for early termination of the Company's amended and
restated secured credit facility, dated December 13, 2004, reflecting this
facility's remaining unamortized fees.
Guidance
Roper is increasing full year operating cash flow guidance from $390
million to $410 million. In light of a higher interest rate environment and a
more uncertain global economy, the Company is establishing fourth quarter DEPS
guidance of $0.83 - $0.86. The Company expects full year DEPS of $3.13 -
$3.16 (previously $3.16 - $3.22). The Company's guidance excludes future
acquisitions and the debt extinguishment charges in the third quarter, while
including the dilutive effect of the senior subordinated convertibles notes
based on the stock price through October 17, 2008. Including the debt
extinguishment charges described above, the Company expects full year DEPS of
$3.11 - $3.14, with no effect on full year cash flow or fourth quarter DEPS
guidance.
Conference call to be held at 10:00 (ET) Tomorrow
A conference call to discuss these results has been scheduled for 10:00 AM
ET on Friday, October 24, 2008. The call can be accessed via webcast or by
dialing +1 (800) 239-9838 or +1 (913) 312-1264, using confirmation code
2049770. Webcast information and conference call materials will be made
available in the "Investor" 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 access code 2049770.

Reconciliation to Non-GAAP Measures

Table 1: Sales Growth

Q1 Q2 Q3
2008 2008 2008
Organic Growth 7% 4% 4%
Acquisitions / Divestitures 4% 6% 6%
Rounding (1%) - -

Sub-Total: Growth Excluding FX 10% 10% 10%

Foreign Currency (FX) 3% 2% 1%
Total Sales Growth 13% 12% 11%

Table 2: Net Earnings (Millions)
Q3 Q3 %
2007 2008 Change
Reported Net Earnings $65 $75 15%
Non-Cash Debt Extinguishment Charge - 2 nm
Adjusted Net Earnings 65 77 19%

Table 3: Diluted Earnings Per Share (DEPS)

Q3
2008
Reported Net Earnings $0.80
Non-Cash Debt Extinguishment Charge $0.02
Adjusted Net Earnings $0.82

About Roper Industries
Roper Industries is a market-driven, diversified growth company with
trailing twelve month 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, 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 2008 2007

CURRENT ASSETS:
Cash and cash equivalents $156,272 $308,768
Accounts receivable 396,815 359,808
Inventories 196,089 174,138
Deferred taxes 33,714 27,800
Unbilled receivable 69,251 60,218
Other current assets 29,462 20,405
Total current assets 881,603 951,137

PROPERTY, PLANT AND EQUIPMENT, NET 115,762 107,513

OTHER ASSETS:
Goodwill 2,164,632 1,706,083
Other intangible assets, net 827,649 613,505
Deferred taxes 33,762 23,854
Other assets 50,023 51,092
Total other assets 3,076,066 2,394,534

TOTAL ASSETS $4,073,431 $3,453,184

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $128,335 $115,809
Accrued liabilities 260,862 194,055
Income taxes payable 32,297 24,121
Deferred taxes - 2,442
Current portion of long-term debt 232,676 331,103
Total current liabilities 654,170 667,530

NONCURRENT LIABILITIES:
Long-term debt 1,113,674 727,489
Deferred taxes 252,814 221,411
Other liabilities 42,681 46,948
Total liabilities 2,063,339 1,663,378

STOCKHOLDERS' EQUITY:
Common stock 919 910
Additional paid-in capital 790,668 757,318
Retained earnings 1,139,863 944,886
Accumulated other comprehensive
earnings 100,431 108,732
Treasury stock (21,789) (22,040)
Total stockholders' equity 2,010,092 1,789,806

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $4,073,431 $3,453,184

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,
2008 2007 2008 2007

Net sales $593,100 $532,902 $1,730,509 $1,541,965
Cost of sales 284,340 261,123 840,029 769,643

Gross profit 308,760 271,779 890,480 772,322

Selling, general and
administrative expenses 176,461 158,041 523,374 457,777

Income from operations 132,299 113,738 367,106 314,545

Interest expense 14,322 13,119 36,833 39,957
Other expense 2,836 404 1,695 1,884

Earnings from continuing
operations before
income taxes 115,141 100,215 328,578 272,704

Income taxes 39,942 35,075 114,124 94,901

Net Earnings $75,199 $65,140 $214,454 $177,803

Earnings per share:
Basic $0.84 $0.74 $2.40 $2.01
Diluted $0.80 $0.70 $2.28 $1.91

Weighted average common and
common equivalent shares
outstanding:
Basic 89,629 88,575 89,381 88,286
Diluted 94,251 93,559 94,026 92,934

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

Three months ended September 30,
2008 2007
Amount % Amount %
Net sales:
Industrial Technology $169,065 $161,828
Energy Systems & Controls 137,535 131,033
Scientific & Industrial Imaging 94,610 91,331
RF Technology 191,890 148,710
Total $593,100 $532,902

Gross profit:
Industrial Technology $82,215 48.6% $78,394 48.4%
Energy Systems & Controls 75,172 54.7% 70,907 54.1%
Scientific & Industrial Imaging 51,457 54.4% 50,242 55.0%
RF Technology 99,916 52.1% 72,236 48.6%
Total $308,760 52.1% $271,779 51.0%

Operating profit*:
Industrial Technology $43,767 25.9% $42,065 26.0%
Energy Systems & Controls 32,541 23.7% 31,858 24.3%
Scientific & Industrial Imaging 18,746 19.8% 16,385 17.9%
RF Technology 50,191 26.2% 34,997 23.5%
Total $145,245 24.5% $125,305 23.5%

Net Orders:
Industrial Technology $163,442 $153,236
Energy Systems & Controls 134,970 145,855
Scientific & Industrial Imaging 102,933 95,339
RF Technology 179,274 138,513
Total $580,619 $532,943

Nine months ended September 30,
2008 2007
Amount % Amount %
Net sales:
Industrial Technology $525,929 $477,667
Energy Systems & Controls 410,638 361,044
Scientific & Industrial Imaging 282,206 277,042
RF Technology 511,736 426,212
Total $1,730,509 $1,541,965

Gross profit:
Industrial Technology $253,719 48.2% $228,407 47.8%
Energy Systems & Controls 223,720 54.5% 191,159 52.9%
Scientific & Industrial Imaging 154,135 54.6% 152,629 55.1%
RF Technology 258,906 50.6% 200,127 47.0%
Total $890,480 51.5% $772,322 50.1%

Operating profit*:
Industrial Technology $136,627 26.0% $120,721 25.3%
Energy Systems & Controls 96,359 23.5% 81,579 22.6%
Scientific & Industrial Imaging 54,091 19.2% 53,453 19.3%
RF Technology 119,902 23.4% 90,669 21.3%
Total $406,979 23.5% $346,422 22.5%

Net Orders:
Industrial Technology $514,326 $479,100
Energy Systems & Controls 402,553 376,611
Scientific & Industrial Imaging 289,606 277,918
RF Technology 538,624 425,121
Total $1,745,109 $1,558,750

* Operating profit is before unallocated corporate general and
administrative expenses. These expenses were $12,946 and $11,567 for the
three months ended September 30, 2008 and 2007, respectively, and $39,873 and
$31,877 for the nine months ended September 30, 2008 and 2007, respectively.

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

Nine months ended
September 30,
2008 2007

Net earnings $214,454 $177,803
Depreciation 24,775 23,560
Amortization 50,588 46,643
Other, net 15,722 (21,035)
Cash provided by operating
activities 305,539 226,971

Business acquisitions, net of cash
acquired (701,935) (106,287)
Capital expenditures (20,787) (19,591)
Other, net (4,084) (3,596)
Cash used by investing activities (726,806) (129,474)

Debt borrowings (payments), net 274,527 (50,666)
Dividends (19,393) (17,182)
Other, net 16,215 20,806
Cash provided by (used by)
financing activities 271,349 (47,042)

Effect of exchange rate changes on
cash (2,578) 5,998

Net increase (decrease) in cash and
equivalents (152,496) 56,453
Cash and equivalents, beginning of
period 308,768 69,478

Cash and equivalents, end of period $156,272 $125,931

SOURCE Roper Industries, Inc.

Investor Relations, Roper Industries, Inc., +1-941-556-2601,
investor-relations@roperind.com