01—Abstract
Summary
Summary of the 10-K filed February 29, 2008. Cited figures are marked; the original filing is the authoritative source.
Roper Industries, Inc. reported net sales of $2.10 billiona for 2007, up from $1.70 billion in 2006, an increase of 23.6%, with internal growth of 14.5% including a 2% foreign currency impact.
Net earnings rose to $250.0 millionb ($2.68 diluted EPS) from $193.3 million ($2.13 diluted EPS). Growth came from a full year of 2006 acquisitions plus six 2007 acquisitions (JLT, DJ Instruments, Roda Deaco, Dynamic Instruments, Black Diamond), all purchased for cash and financed through borrowings and operating cash flow. Operating cash flow was $343.8 million, and income from operations was $438.4 million, compared with $337.7 million in 2006.
The balance sheet carries substantial leverage and goodwill. Total indebtedness was approximately $1.06 billionc at year-end 2007, with about $344 million undrawn under the senior secured credit facility, which was expanded to $1.355 billion through an accordion feature in December 2007. Goodwill of $1.71 billion and intangible assets were a large share of total assets of $3.45 billion, and the filing notes that goodwill impairment could materially affect results.
The company does not hedge foreign currency risk, and about 28% of sales were by non-U.S.-dollar functional currency companies. The filing also discloses a subsequent event: on February 20, 2008, Roper acquired The CBORD Group, Inc. in a transaction valued at $367 milliond, to be reported in the RF Technology segment. The quarterly dividend was raised to $0.0725 per share from $0.0650, an increase of 11.5%.
02—Key points
Key Highlights
- Net sales rose 23.6% to $2.10 billion in 2007, with internal growth of 14.5% (including a 2% foreign currency impact) and the balance from acquisitions.
- Net earnings increased to $250.0 million from $193.3 million; diluted EPS was $2.68 versus $2.13 in 2006.
- Operating cash flow was $343.8 million in 2007, compared with $262.5 million in 2006.
- Total indebtedness of approximately $1.06 billion at December 31, 2007, with about $344 million undrawn under the senior secured credit facility.
- Goodwill of $1.71 billion represented a large portion of total assets of $3.45 billion, a risk the filing flags for potential impairment.
- Six acquisitions in 2007 (JLT, DJ Instruments, Roda Deaco, Dynamic Instruments, Black Diamond) were paid in cash; a $367 million CBORD acquisition closed February 20, 2008.
- Quarterly dividend increased 11.5% to $0.0725 per share, effective with the January 31, 2008 payment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Roper Technologies kept $0.12.
- Revenue$2.10B100.0%
- Cost of revenue−$1.04B49.6%
- Gross profit$1.06B50.4%
- Operating costs−$620.0M29.5%
- Operating income$438.4M20.9%
- Interest, other & tax−$192.6M9.2%
- Net income$245.7M11.7%
Where FY2007 revenue went
$2.10B- Cost of revenue: $1.04B, 50% of revenue
- SG&A: $620.0M, 29% of revenue
- Net income: $245.7M, 12% of revenue
- Interest, other & tax: $192.6M, 9.2% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 29, 2008Financial Statements
| Revenue | $2.10B |
| Cost of Revenue | $1.04B |
| Gross Profit | $1.06B |
| SG&A Expenses | $620.04M |
| Operating Income | $438.35M |
| Interest Expense | $58.85M |
| Net Income | $245.71M |
| EPS (Basic) | $2.78 |
| EPS (Diluted) | $2.64 |
| Shares Outstanding (Basic) | 88.39M |
| Shares Outstanding (Diluted) | 93.23M |
05—Questions
Frequently Asked Questions
How much did Roper's revenue and earnings grow in 2007?
Net sales grew 23.6% to $2.10 billion from $1.70 billion, and net earnings rose to $250.0 million from $193.3 million. The filing attributes growth to acquisitions and strong internal growth of 14.5%.
How much debt does Roper carry, and how much borrowing capacity is left?
Total consolidated indebtedness was approximately $1.06 billion at December 31, 2007. About $344 million was undrawn under the senior secured credit facility, which was increased to $1.355 billion in December 2007 via an accordion feature.
What are the main risks tied to Roper's balance sheet?
Goodwill totaled $1.71 billion against stockholders' equity of $1.79 billion and total assets of $3.45 billion. The filing warns that a significant decline in operating performance or a shift toward more conservative business valuations could force a non-cash goodwill impairment charge that would affect results and total capitalization.
What acquisition did Roper announce after year-end?
On February 20, 2008, Roper acquired The CBORD Group, Inc., a provider of card systems and integrated security solutions to higher education, healthcare and other markets, in a transaction valued at $367 million. Results will be reported in the RF Technology segment.
Is Roper's dividend growing?
Yes. The Board increased the quarterly dividend paid January 31, 2008 to $0.0725 per share from $0.0650, an increase of 11.5%. Dividends declared for 2007 totaled $0.27 per share, up from $0.24 in 2006.
06—Continue