01—Abstract
Summary
Summary of the 10-K filed February 24, 2012. Cited figures are marked; the original filing is the authoritative source.
Roper Industries, Inc. reported net sales of $2,797,089 thousanda ($2.80 billion) for 2011, up from $2,386,112 thousand in 2010, an increase of 17.2%, with organic sales growth of 12.7%, a 1.4% favorable foreign exchange effect and 3.1% from acquisitions.
Net earnings rose to $427,247 thousandb from $322,580 thousand, and diluted earnings per share were $4.34 versus $3.34. Income from operations was $660,539 thousand, and operating cash flow was $601.6 million. The company made three acquisitions in 2011 (NDI Holding Corp., United Controls Group, Inc. and Trinity Integrated Systems Ltd.) for an aggregate cash purchase price of $234 million.
Total debt declined to $1.09 billionc at December 31, 2011 from $1.34 billion a year earlier, as debt was repaid from operating cash, and the company stated that it expects to continue reducing debt in 2012. Goodwill of $2.87 billion represented 54% of total assets of $5.32 billion, and the company reported that each reporting unit's fair value was substantially in excess of its carrying value, with no impairment identified. Shareholders were told of a 25.0% increase in the quarterly dividend to $0.1375 per share, payable January 27, 2012.
The filing also highlights the company's exposure to international operations, with 29% of net sales attributed to operations outside the U.S., and to asbestos-related litigation, for which the company states it is not possible to determine potential liability. Segment results show RF Technology as the largest segment by sales at $851.3 milliond, followed by Industrial Technology at $737.4 million.
02—Key points
Key Highlights
- Net sales rose 17.2% to $2,797,089 thousand in 2011, with organic growth of 12.7%, foreign exchange adding 1.4% and acquisitions adding 3.1%.
- Net earnings increased to $427,247 thousand from $322,580 thousand; diluted EPS was $4.34 versus $3.34 in 2010.
- Total debt fell to $1.09 billion at year-end 2011 from $1.34 billion, and the company reported cash of $338,101 thousand at December 31, 2011.
- Operating cash flow was $601.6 million in 2011, compared with $499.5 million in 2010.
- Three acquisitions completed in 2011 for an aggregate cash purchase price of $234 million, adding $91 million of identifiable intangibles and $149 million of goodwill.
- Quarterly dividend increased 25.0% to $0.1375 per share, payable January 27, 2012.
- Goodwill of $2.87 billion represented 54% of total assets of $5.32 billion; no goodwill impairment was identified for 2011.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Roper Technologies kept $0.15.
- Revenue$2.80B100.0%
- Cost of revenue−$1.28B45.8%
- Gross profit$1.52B54.2%
- Operating costs−$855.0M30.6%
- Operating income$660.5M23.6%
- Interest, other & tax−$233.3M8.3%
- Net income$427.2M15.3%
04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 24, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $2.80B$2.39B | +17.2% |
| Cost of Revenue | $1.28B$1.11B | +15.4% |
| Gross Profit | $1.52B$1.28B | +18.9% |
| R&D Expenses | $121.70M$102.40M | +18.8% |
| SG&A Expenses | $855.02M$760.83M | +12.4% |
| Operating Income | $660.54M$514.29M | +28.4% |
| Interest Expense | $63.65M$66.53M | −4.3% |
| Net Income | $427.25M$322.58M | +32.4% |
| EPS (Basic) | $4.45$3.42 | +30.1% |
| EPS (Diluted) | $4.34$3.34 | +29.9% |
| Shares Outstanding (Basic) | 95.96M94.24M | +1.8% |
| Shares Outstanding (Diluted) | 98.39M96.65M | +1.8% |
05—Questions
Frequently Asked Questions
How did Roper's revenue and profitability change in 2011?
Net sales were $2,797,089 thousand, up 17.2% from $2,386,112 thousand in 2010. Income from operations was $660,539 thousand versus $514,294 thousand, and net earnings were $427,247 thousand versus $322,580 thousand. Gross profit as a percentage of sales was 54.2%, compared with 53.4% in 2010.
How much debt does Roper carry and how is it changing?
Total debt was $1.09 billion at December 31, 2011, down from $1.34 billion at December 31, 2010, as the decrease came from debt payments made with cash from operations. The company had $707 million of undrawn availability under its senior unsecured credit facility at year-end and stated it expects to reduce debt further in 2012.
Which segment contributed the most sales in 2011?
RF Technology had the largest sales at $851.3 million, representing 30.4% of total net sales. Industrial Technology followed with $737.4 million (26.4%), Medical and Scientific Imaging with $610.6 million (21.8%), and Energy Systems and Controls with $597.8 million (21.4%).
What are the main risks the filing highlights for investors?
The filing cites indebtedness that may restrict operating flexibility, foreign exchange exposure (sales from non-U.S.-dollar functional currency operations were 27% of net sales), international operating risks, acquisition integration risk, cyclicality in industrial and energy markets, and potential write-offs of goodwill and intangible assets. It also notes asbestos-related litigation, for which the company states it is not possible to determine potential liability.
What is the company's dividend policy?
The company has declared a cash dividend each quarter since its February 1992 initial public offering and has increased its dividend annually since then. In November 2011 the Board increased the quarterly dividend paid January 27, 2012 to $0.1375 per share from $0.1100, an increase of 25.0%. Dividends declared for 2011 totaled $0.4675 per share.
06—Continue