How did Roper Industries perform financially in fiscal 1996?

Net sales were $225.7 million, up 29% from $175.4 million, and net earnings were $28.9 million, or $1.87 per share, compared with $23.3 million, or $1.54 per share, in 1995. Income from operations rose to $47.3 million from $37.4 million.

What drove the growth in sales and what acquisitions were made?

Growth came from the full-year inclusion of Uson and Metrix, five months of results from Gatan and Fluid Metering (both acquired in May 1996), and sales gains at most businesses, particularly CCC. Gatan and Fluid Metering cost a combined $78.8 million, of which $72.7 million was paid in cash.

How much debt does the company carry and how is it financed?

Total long-term debt was $70.2 million at October 31, 1996, compared with $20.8 million a year earlier. The domestic credit facility was increased to $100 million in May 1996, with $32.8 million of available credit at year-end. Borrowings carry variable interest rates, so interest costs can change with short-term rates.

What are the main risks tied to customers?

Russian Gazprom was the largest customer in the Industrial Controls segment, at approximately 19% of segment sales. Future orders depend on Ex-Im Bank supported financing for a $151 million export contract, and the timing of shipments is affected by weather, installation and start-up involvement, and political developments in Russia. Integrated Designs also faces a likely adverse impact from a cyclical downturn in semiconductor capital markets.

What is the outlook management provided?

Management expects its three business segments to continue growing in sales and earnings absent material adverse changes in market and business conditions. It expects Integrated Designs' sales to be adversely affected by the semiconductor downturn compared with 1996 levels, and it plans to keep reviewing acquisition candidates throughout 1997.

ROP 10-K FY1996 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed January 9, 1997. Cited figures are marked; the original filing is the authoritative source.

Roper Industries, Inc. reported record net sales of $225.7 million^a for the fiscal year ended October 31, 1996, up 29% from $175.4 million in 1995, with each of its business segments achieving double-digit sales growth.

Net earnings rose to $28.9 million^b, or $1.87 per common share, compared with $23.3 million, or $1.54 per share, in 1995. Income from operations increased to $47.3 million, although the operating margin eased to 20.9% from 21.3%, and gross margin declined to 51.4% from 53.5%, reflecting lower margins at Industrial Controls and Fluid Handling. The company's growth was supported by two May 1996 acquisitions, Gatan International and Fluid Metering, which together cost $78.8 million, of which $72.7 million was paid in cash and financed mainly through borrowings.

Long-term debt rose to $70.2 million^c at year-end from $20.8 million, and long-term debt to total capitalization was 31.6% versus 16.5% a year earlier. Operating cash flow was $33.1 million. Management said the company is positioned to continue its acquisition strategy and expects its three segments to keep growing in sales and earnings, though a cyclical downturn in semiconductor capital markets is likely to hurt Integrated Designs.

A key risk for investors is concentration in Russian Gazprom, the largest customer in the Industrial Controls segment at approximately 19% of segment sales. Future shipments depend on the availability of Ex-Im Bank supported financing for a $151 million^d export contract, and the timing of orders remains uncertain. The company also moved its stock listing from NASDAQ to the New York Stock Exchange effective November 1, 1996, under the symbol ROP.

02—Key points

Key Highlights

Net sales reached a record $225.7 million in fiscal 1996, up 29% from $175.4 million in 1995, the fourth consecutive year of record sales.
Net earnings were $28.9 million, or $1.87 per common share, versus $23.3 million, or $1.54 per share, in fiscal 1995.
Gross margin declined to 51.4% from 53.5%, while income from operations rose to $47.3 million from $37.4 million.
Acquisitions of Gatan International and Fluid Metering in May 1996 cost $78.8 million combined, funded largely by borrowings under the revolving credit line.
Long-term debt increased to $70.2 million from $20.8 million; long-term debt to total capitalization was 31.6% versus 16.5% a year earlier.
Russian Gazprom was the largest customer in the Industrial Controls segment, contributing approximately 19% of segment sales, with a $151 million export contract pending Ex-Im Bank financing.
Common stock began trading on the New York Stock Exchange under the symbol ROP on November 1, 1996, after trading on NASDAQ.

03—Questions

Frequently Asked Questions

How did Roper Industries perform financially in fiscal 1996?
Net sales were $225.7 million, up 29% from $175.4 million, and net earnings were $28.9 million, or $1.87 per share, compared with $23.3 million, or $1.54 per share, in 1995. Income from operations rose to $47.3 million from $37.4 million.
What drove the growth in sales and what acquisitions were made?
Growth came from the full-year inclusion of Uson and Metrix, five months of results from Gatan and Fluid Metering (both acquired in May 1996), and sales gains at most businesses, particularly CCC. Gatan and Fluid Metering cost a combined $78.8 million, of which $72.7 million was paid in cash.
How much debt does the company carry and how is it financed?
Total long-term debt was $70.2 million at October 31, 1996, compared with $20.8 million a year earlier. The domestic credit facility was increased to $100 million in May 1996, with $32.8 million of available credit at year-end. Borrowings carry variable interest rates, so interest costs can change with short-term rates.
What are the main risks tied to customers?
Russian Gazprom was the largest customer in the Industrial Controls segment, at approximately 19% of segment sales. Future orders depend on Ex-Im Bank supported financing for a $151 million export contract, and the timing of shipments is affected by weather, installation and start-up involvement, and political developments in Russia. Integrated Designs also faces a likely adverse impact from a cyclical downturn in semiconductor capital markets.
What is the outlook management provided?
Management expects its three business segments to continue growing in sales and earnings absent material adverse changes in market and business conditions. It expects Integrated Designs' sales to be adversely affected by the semiconductor downturn compared with 1996 levels, and it plans to keep reviewing acquisition candidates throughout 1997.

04—Continue

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