01—Abstract
Summary
Summary of the 10-K filed November 19, 2007. Cited figures are marked; the original filing is the authoritative source.
Rockwell Automation, Inc. (ROK) reported strong performance in its fiscal year ended September 30, 2007, driven by a 10% increase in sales, reaching $5.0 billiona.
This growth was primarily fueled by robust international demand, particularly in Europe and Latin America, which saw organic sales increases of 14% and 19% respectively. The company's strategic divestiture of its Dodge and Reliance Electric motor businesses generated a significant after-tax gain of $868.2 millionb. Financially, Rockwell Automation demonstrated improved profitability, with income from continuing operations increasing by 8% over the prior year.
The company also managed its cash flow effectively, generating $531.0 millionc in free cash flow, which supported substantial share repurchases totaling approximately 23.8 million shares. The company maintained a healthy balance sheet with a debt-to-total-capital ratio of 34.7% and continued to return value to shareholders through dividends. Looking ahead, Rockwell Automation expressed optimism for fiscal year 2008, projecting revenue growth of 10-12% and continued expansion in emerging markets.
02—Key points
Key Highlights
- Total sales increased by 10% to $5.0 billion for fiscal year 2007.
- Achieved significant organic sales growth of 14% in Europe and 19% in Latin America.
- Recorded a substantial after-tax gain of $868.2 million from the divestiture of its Dodge and Reliance Electric motors businesses.
- Income from continuing operations grew by 8% to $569.3 million.
- Generated $531.0 million in free cash flow, supporting robust share repurchases.
- The company's debt-to-total-capital ratio was 34.7% at the end of the fiscal year.
- Projected revenue growth of 10-12% for fiscal year 2008.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Rockwell Automation kept $0.30.
- Revenue$5.00B100.0%
- Cost of revenue−$2.91B58.1%
- Gross profit$2.10B41.9%
- Operating costs−$1.53B30.5%
- Operating income$569.3M11.4%
- Interest, other & tax$918.5M18.4%
- Net income$1.49B29.7%
Where FY2007 revenue went
$5.00B- Cost of revenue: $2.91B, 58% of revenue
- SG&A: $1.28B, 26% of revenue
- Operating income: $569.3M, 11% of revenue
- Other operating costs: $249.4M, 5.0% of revenue
Kept 11% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed November 19, 2007Financial Statements
| Revenue | $5.00B |
| Cost of Revenue | $2.91B |
| Gross Profit | $2.10B |
| SG&A Expenses | $1.28B |
| Operating Income | $569.30M |
| Interest Expense | $63.40M |
| Net Income | $1.49B |
| EPS (Basic) | $9.37 |
| EPS (Diluted) | $9.23 |
| Shares Outstanding (Basic) | 158.70M |
| Shares Outstanding (Diluted) | 161.20M |
05—Questions
Frequently Asked Questions
What were the key drivers of Rockwell Automation's sales growth in fiscal year 2007?
Rockwell Automation experienced a 10% increase in total sales to $5.0 billion. This growth was primarily driven by strong demand in international markets, particularly in Europe (14% organic growth) and Latin America (19% organic growth). The company also benefited from investments in customer-facing resources and improving macroeconomic conditions in these regions. While overall North American market growth showed deceleration, specific sectors and ongoing customer demand contributed to the sales increase.
How did the divestiture of the Power Systems segment impact Rockwell Automation's financial results?
The divestiture of the Dodge mechanical and Reliance Electric motors and motor repair services businesses, completed on January 31, 2007, had a significant positive impact. It resulted in an after-tax gain of $868.2 million, which substantially boosted net income. The company also received $1.75 billion in cash from this sale, which was used for share repurchases, tax payments related to the gain, and business acquisitions.
What is Rockwell Automation's outlook for fiscal year 2008?
Rockwell Automation is optimistic about fiscal year 2008, projecting revenue growth between 10% and 12%. This growth is expected to be supported by continued strength in Europe and emerging markets, along with contributions from recent acquisitions. The company anticipates diluted earnings per share to be in the range of $4.25 to $4.45, driven by volume leverage, productivity initiatives, and a lower share count, partially offset by investments in new products and globalization efforts. Free cash flow is expected to be approximately 95% of net income.
How did the company manage its debt and shareholder returns in 2007?
Rockwell Automation maintained a stable financial position, with a debt-to-total-capital ratio of 34.7% at the end of fiscal year 2007. The company actively returned capital to shareholders through share repurchases, buying back approximately 23.8 million shares for $1.5 billion. Additionally, dividends paid to shareholders increased to $1.16 per share, totaling $184.7 million for the year, reflecting the company's commitment to shareholder value.
06—Continue