10-KPeriod: FY2007

ROCKWELL AUTOMATION, INC Annual Report, Year Ended Sep 30, 2007

Filed November 19, 2007For Securities:ROK

Summary

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 billion. 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 million. 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 million 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.

Financial Highlights

33 data points
Beta

Revenue

$5.00B

41.9% Gross Margin

Net Income

$1.49B

29.7% Net Margin

EPS (Diluted)

$9.23

Cash & Equivalents

$624.20M

Free Cash Flow

$313.90M

Financial Statements
Beta
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

Key Highlights

  • 1Total sales increased by 10% to $5.0 billion for fiscal year 2007.
  • 2Achieved significant organic sales growth of 14% in Europe and 19% in Latin America.
  • 3Recorded a substantial after-tax gain of $868.2 million from the divestiture of its Dodge and Reliance Electric motors businesses.
  • 4Income from continuing operations grew by 8% to $569.3 million.
  • 5Generated $531.0 million in free cash flow, supporting robust share repurchases.
  • 6The company's debt-to-total-capital ratio was 34.7% at the end of the fiscal year.
  • 7Projected revenue growth of 10-12% for fiscal year 2008.

Frequently Asked Questions

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.

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.

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.

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.