What drove the increase in Roper's fiscal 1997 sales?

The increase was due mostly to acquisitions. Gatan and FMI, acquired in May 1996, contributed $30.8 million of additional revenue for a full year, and Princeton and Petrotech, acquired in May 1997, contributed $42.6 million of sales. Excluding these four companies, net sales were approximately the same as in 1996.

What is the main risk to Roper's Compressor Controls business?

RAO Gazprom, the largest customer of Compressor Controls Corporation, has been unable to finalize financing for its purchases. Gazprom told the company it will discontinue efforts to obtain U.S. Export-Import Bank guaranteed financing. The company said it may walk away from much or all of this opportunity if Gazprom cannot provide assurance of funding by mid-year, and that collection of existing receivables may be at risk.

How leveraged is Roper after its 1997 acquisitions?

Total debt to total capitalization was 36.5% at October 31, 1997, up from 33.8% a year earlier. Long-term debt was $99.6 million. The company had $102 million of additional borrowing capacity under its NationsBank credit agreement, which was raised to $200 million in May 1997.

Is Roper's gross margin changing?

Consolidated gross profit as a percentage of sales was 51.4% in both 1997 and 1996. Excluding Petrotech, which has a typically lower gross margin, the company would have reported 54.0%, an increase of 2.6% over 1996, mostly from product mix and cost improvements at Compressor Controls.

Does Roper pay dividends and what is its policy?

The company has declared a cash dividend every quarter since its February 1992 initial public offering. The quarterly rate was raised to $.06 per share in the fourth quarter of fiscal 1997, and total dividends for the year were $0.195 per share. Future dividends are at the discretion of the Board of Directors and cannot be assured.

ROP 10-K FY1997 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed January 21, 1998. Cited figures are marked; the original filing is the authoritative source.

Roper Industries, Inc. (now Roper Technologies, Inc.) reported fiscal 1997 (year ended October 31, 1997) net sales of $298.2 million^a, up from $225.7 million in 1996, and net earnings of $36.4 million, or $1.16 per common share, compared with $28.9 million, or $0.93 per share, in 1996.

The increase was driven mostly by acquisitions: Gatan and FMI were included for a full year, and Princeton and Petrotech contributed $42.6 million^b of sales after their May 1997 acquisitions. Excluding these four companies, net sales were approximately flat. Gross margin held at 51.4%, with Petrotech's lower margins offsetting CCC's improvement.

Selling, general and administrative expenses rose to 31.0% of sales from 30.4%, mainly reflecting higher research and development spending. The company's total debt was $98 million^c under its revolving credit line at October 31, 1997, representing 36% of total capitalization, and the company stated it was well positioned for additional acquisitions. Long-term debt rose to $99.6 million from $63.4 million, while stockholders' equity increased to $177.9 million.

Operating cash flow was $35.4 million^d. Bookings grew 29% to $297.6 million, and sales order backlog reached $82.6 million. The filing flags a significant risk tied to RAO Gazprom, the largest customer of the Compressor Controls subsidiary.

Gazprom has not secured the financing needed for its purchases, and the company said it may walk away from much of this business if Gazprom cannot provide assurance by mid-year. Receivables from Gazprom and related customers, totaling $14.1 million, were also at risk of collection problems. Management said it expects its three segments to continue growing in sales and earnings absent adverse market conditions.

02—Key points

Key Highlights

Net sales rose to $298.2 million in fiscal 1997 from $225.7 million in 1996, a record for the fifth consecutive year, helped mainly by acquisitions.
Net earnings were $36.4 million, or $1.16 per share, versus $28.9 million, or $0.93 per share, in 1996.
Debt under the revolving credit line was $98 million at October 31, 1997, 36% of total capitalization, after financing three 1997 acquisitions.
Sales to RAO Gazprom fell 19% in fiscal 1997, and the company may reduce, restructure, or abandon the CIS turbomachinery controls business if Gazprom does not fund purchases.
Sales order backlog was $82.6 million at October 31, 1997, versus $56.2 million a year earlier, and bookings rose 29% to $297.6 million.
Research and development spending increased to $14.2 million, or 4.8% of sales, from $8.7 million in 1996.
Stock was listed on the NYSE from November 1, 1996, and the company completed a 2-for-1 stock split on August 1, 1997.

03—Questions

Frequently Asked Questions

What drove the increase in Roper's fiscal 1997 sales?
The increase was due mostly to acquisitions. Gatan and FMI, acquired in May 1996, contributed $30.8 million of additional revenue for a full year, and Princeton and Petrotech, acquired in May 1997, contributed $42.6 million of sales. Excluding these four companies, net sales were approximately the same as in 1996.
What is the main risk to Roper's Compressor Controls business?
RAO Gazprom, the largest customer of Compressor Controls Corporation, has been unable to finalize financing for its purchases. Gazprom told the company it will discontinue efforts to obtain U.S. Export-Import Bank guaranteed financing. The company said it may walk away from much or all of this opportunity if Gazprom cannot provide assurance of funding by mid-year, and that collection of existing receivables may be at risk.
How leveraged is Roper after its 1997 acquisitions?
Total debt to total capitalization was 36.5% at October 31, 1997, up from 33.8% a year earlier. Long-term debt was $99.6 million. The company had $102 million of additional borrowing capacity under its NationsBank credit agreement, which was raised to $200 million in May 1997.
Is Roper's gross margin changing?
Consolidated gross profit as a percentage of sales was 51.4% in both 1997 and 1996. Excluding Petrotech, which has a typically lower gross margin, the company would have reported 54.0%, an increase of 2.6% over 1996, mostly from product mix and cost improvements at Compressor Controls.
Does Roper pay dividends and what is its policy?
The company has declared a cash dividend every quarter since its February 1992 initial public offering. The quarterly rate was raised to $.06 per share in the fourth quarter of fiscal 1997, and total dividends for the year were $0.195 per share. Future dividends are at the discretion of the Board of Directors and cannot be assured.

04—Continue

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