Why was this amended 10-K filed?

Amendment No. 2 restates the consolidated financial statements as of October 31, 2002 and 2001 and for the three years ended October 31, 2002 to reflect the discontinued operations of the Petrotech operation. It also restates all segment information to reflect the realignment into four market-focused segments made during the quarter ended January 31, 2003. Amendment No. 1 had corrected a typographical error in footnote 14.

What is the Neptune acquisition and how will it be financed?

On October 21, 2003, the company agreed to acquire all outstanding capital stock of Neptune Technology Group Holdings Inc. for a cash purchase price of approximately $475 million, net of cash acquired and including debt assumed. The company obtained a commitment for a new $625 million senior secured credit facility, consisting of $450 million of five-year term loans and a $175 million three-year revolving facility. It also plans to issue approximately $150 to $200 million of convertible subordinated notes and $150 to $200 million of common stock, and up to $300 million of bridge financing is available if needed. Closing is expected in the first fiscal quarter of 2004.

What caused the goodwill charge in fiscal 2002?

Upon adopting SFAS 142 effective November 1, 2001, the transitional business valuation reviews indicated a reduction in the carrying value of goodwill for three business units: Redlake, Petrotech and Dynamco. This was reported as a change in accounting principle with a transitional charge to earnings of approximately $26 million, and it is a non-cash charge.

How concentrated is the company's customer base?

Gazprom, a Russian enterprise, was the biggest single customer in the Energy Systems and Controls segment, accounting for approximately 45% of that segment's sales in fiscal 2002, compared with 46% in fiscal 2001. The company expects sales to Gazprom in fiscal 2003 to be reduced in amount and as a percentage of segment sales compared with fiscal 2002. None of the customers in the other segments accounted for as much as 10% of their respective net sales in fiscal 2002.

What did management expect for fiscal 2003?

Management currently expected sales and net income for fiscal 2003 to be higher than for fiscal 2002, citing full-year contributions from businesses acquired in fiscal 2002, especially Zetec, efficiency efforts, and reduced interest expense from paying down debt. It did not expect a meaningful recovery in the semiconductor industry during fiscal 2003.

ROP 10-K Filed Nov 3, 2003

01—Abstract

Summary

Summary of the 10-K/A filed November 3, 2003. Cited figures are marked; the original filing is the authoritative source.

Roper Industries, Inc. filed Amendment No. 2 to its Form 10-K for the fiscal year ended October 31, 2002, restating its consolidated financial statements to reflect discontinued operations of its Petrotech operation and to reflect the realignment of operations into four market-focused segments: Instrumentation, Industrial Technology, Energy Systems and Controls, and Scientific and Industrial Imaging.

Net sales for fiscal 2002 were $617.5 million^a, up from $563.0 million in fiscal 2001, with net earnings of $40.1 million, which includes a goodwill impairment charge of $26.0 million net of taxes recorded as a change in accounting principle upon adoption of SFAS 142. Earnings from continuing operations before the change in accounting principle were $66.4 million, or $2.09 per diluted share, compared with $57.4 million, or $1.82 per diluted share, in fiscal 2001. The company's total debt was $332.1 million at October 31, 2002, representing 47% of total capital, and it was in compliance with its debt covenants.

Cash provided by operating activities was $86.8 million^b in fiscal 2002, down from $102.4 million in fiscal 2001, which management attributed mainly to a one-time supplemental Gazprom order in the prior year. Sales outside the United States were 59% of total net sales in fiscal 2002. Gazprom, a Russian enterprise, accounted for approximately 45% of Energy Systems and Controls segment sales.

As a subsequent event, on October 21, 2003, the company agreed to acquire Neptune Technology Group Holdings Inc. for a cash purchase price of approximately $475 million^c, net of cash acquired and including debt assumed. The acquisition is expected to close in the first fiscal quarter of 2004 and is to be financed by a new $625 million senior secured credit facility, planned convertible subordinated notes and common stock offerings, and possible bridge financing.

02—Key points

Key Highlights

Net sales of $617.5 million in fiscal 2002, compared with $563.0 million in fiscal 2001.
Net earnings of $40.1 million in fiscal 2002, after a $26.0 million goodwill impairment charge (net of taxes) recorded as a change in accounting principle under SFAS 142.
Earnings from continuing operations before change in accounting principle of $66.4 million, or $2.09 per diluted share, versus $57.4 million, or $1.82 per diluted share, in fiscal 2001.
Total debt of $332.1 million at October 31, 2002, or 47% of total capital, with the company in compliance with all debt covenants.
Cash provided by operating activities of $86.8 million in fiscal 2002, compared with $102.4 million in fiscal 2001.
Sales outside the United States were 59% of total net sales in fiscal 2002, and Gazprom represented approximately 45% of Energy Systems and Controls segment sales.
Subsequent event: agreement on October 21, 2003 to acquire Neptune Technology Group Holdings Inc. for approximately $475 million in cash, net of cash acquired, including debt assumed.

03—Questions

Frequently Asked Questions

Why was this amended 10-K filed?
Amendment No. 2 restates the consolidated financial statements as of October 31, 2002 and 2001 and for the three years ended October 31, 2002 to reflect the discontinued operations of the Petrotech operation. It also restates all segment information to reflect the realignment into four market-focused segments made during the quarter ended January 31, 2003. Amendment No. 1 had corrected a typographical error in footnote 14.
What is the Neptune acquisition and how will it be financed?
On October 21, 2003, the company agreed to acquire all outstanding capital stock of Neptune Technology Group Holdings Inc. for a cash purchase price of approximately $475 million, net of cash acquired and including debt assumed. The company obtained a commitment for a new $625 million senior secured credit facility, consisting of $450 million of five-year term loans and a $175 million three-year revolving facility. It also plans to issue approximately $150 to $200 million of convertible subordinated notes and $150 to $200 million of common stock, and up to $300 million of bridge financing is available if needed. Closing is expected in the first fiscal quarter of 2004.
What caused the goodwill charge in fiscal 2002?
Upon adopting SFAS 142 effective November 1, 2001, the transitional business valuation reviews indicated a reduction in the carrying value of goodwill for three business units: Redlake, Petrotech and Dynamco. This was reported as a change in accounting principle with a transitional charge to earnings of approximately $26 million, and it is a non-cash charge.
How concentrated is the company's customer base?
Gazprom, a Russian enterprise, was the biggest single customer in the Energy Systems and Controls segment, accounting for approximately 45% of that segment's sales in fiscal 2002, compared with 46% in fiscal 2001. The company expects sales to Gazprom in fiscal 2003 to be reduced in amount and as a percentage of segment sales compared with fiscal 2002. None of the customers in the other segments accounted for as much as 10% of their respective net sales in fiscal 2002.
What did management expect for fiscal 2003?
Management currently expected sales and net income for fiscal 2003 to be higher than for fiscal 2002, citing full-year contributions from businesses acquired in fiscal 2002, especially Zetec, efficiency efforts, and reduced interest expense from paying down debt. It did not expect a meaningful recovery in the semiconductor industry during fiscal 2003.

04—Continue

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