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Roper Industries Announces Record First Quarter 2005 Results

Sales, Net Earnings, EBITDA, Cash Flow All Grow in Excess of 50%;
Acquisition Integration Ahead of Expectations

Duluth, Georgia, April 28, 2005 … Roper Industries, Inc. (NYSE: ROP) reported record first quarter results for the period ended March 31, 2005. Diluted earnings per share (DEPS) were $0.65 in the quarter, a 33% increase over the comparable period in the prior year. Net sales were a record $334 million in the first quarter, an increase of $113 million, driven by internal growth and contributions from acquisitions. The Company achieved record orders of $331 million in its first quarter, an increase of 51%.

First quarter 2005 results include contributions from Roper’s new Radio Frequency (RF) segment businesses, TransCore and Inovonics. “We are quickly integrating these businesses into Roper and are pleased that they both performed ahead of expectations in the quarter,” said Brian Jellison, Roper’s Chairman, President and CEO. “We are making progress on our RF technology and market initiatives and remain excited about the growing potential for RF applications into targeted markets, such as security and asset tracking.”

During the first quarter, the Company reported $39 million of cash flow from operating activities, an increase of 51% over the prior year. This performance represents 138% of first quarter net earnings. EBITDA improved 63% to a record $70 million, and EBITDA margins improved 140 basis points to 20.8%.

“We are off to a great start in 2005,” said Mr. Jellison. “Our operating focus continues to produce solid results, including 7% internal sales and 10% internal order growth in the first quarter and a year-over-year decrease in net working capital from 21.2% to 17.9% of annualized quarterly net sales. These gains supported our strong margin and cash flow improvements in the quarter.”

The Company also provided a financial forecast for its second quarter ended June 30, 2005, expecting DEPS of $0.74-$0.79. Full year DEPS guidance was increased from $3.10-$3.30 to $3.15-$3.35, and the Company expects to produce at least $225 million of cash flow from operating activities in 2005.

Mr. Jellison commented that the Company is well positioned to execute its growth strategy. “Roper’s primary end markets — RF, energy, water and research — have attractive growth characteristics with lower cyclical risk. Our businesses are operating effectively, with a focus on growth and cash returns. We continue to see exciting opportunities for our disciplined acquisition process to supplement our growth platforms, supported by our considerable financial capacity, including $98 million of cash and our $400 million undrawn revolver.”

Conference Call to be Held at 10:00 AM (ET) Tomorrow

A conference call to discuss these results has been scheduled for 10:00 AM ET on Friday, April 29, 2005. The call can be accessed via webcast or by dialing +1 (800) 289-0569 (US/Canada) or +1 (913) 981-5542, using access code 3012405. Webcast information and conference call materials will be made available in the “Investor Information” section of Roper’s website (www.roperind.com) prior to the start of the call. Telephonic replays will be available for up to two weeks by calling +1 (719) 457-0820 and using the access code

Table 1: Net Sales (Millions)

Q1 2004
 Q1 2005
Net Sales as Reported     $ 221   $ 334  
Less: Net Sales from Acquisitions    (—)    (97 )
Internal Net Sales   $ 221   $ 237  

Note to Table 1: To compute internal growth, the Company excludes sales from business units not owned for the entire length of the comparative periods being presented.

Table 2: Orders (Millions)

Q1 2004
 Q1 2005
Orders as Reported     $ 220   $ 331  
Less: Orders from Acquisitions    (—)    (89 )
Internal Orders   $ 220   $ 242  

Table 3: EBITDA (Millions)

Q1 2004
 Q1 2005
Net Earnings     $ 18   $ 28  
Add: Interest Expense    7    10  
Add: Income Taxes    8    13  
Add: Depreciation and Amortization    10    18  
Rounding    —    1  
EBITDA   $ 43   $ 70  

About Roper Industries

Roper Industries is a diversified industrial growth company providing engineered products and solutions for global niche markets. Additional information about Roper Industries, including registration to receive press releases via email, is available on the Company’s website, www.roperind.com.

The information provided in this press release contains forward looking statements within the meaning of the federal securities laws. These forward looking statements include, among others, statements regarding the prospects for newly acquired businesses to compete in their markets and contribute to future growth and profit expectations; our strategic goals, and our second quarter and full year 2005 outlook. Forward looking statements may be indicated by words or phrases such as “anticipate,” “estimate,” “plans,” “expects,” “projects,” “should,” “will,” “believes” or “intends” and similar words and phrases. These statements reflect management’s current beliefs and are not guarantees of performance. They involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward looking statement. Such risks and uncertainties include our ability to integrate our acquisitions and realize expected synergies. We also face other general risks, including our ability to realize cost savings from our operating initiatives, unfavorable changes in foreign exchange rates, difficulties associated with exports, risks associated with our international operations, difficulties in making and integrating acquisitions, risks associated with newly acquired businesses, increased product liability and insurance costs, increased warranty exposure, future competition, changes in the supply of, or price for, parts and components, environmental compliance costs and liabilities, risks and cost associated with asbestos related litigation and potential write-offs of our substantial intangible assets. Important risk may be discussed in current and subsequent filings with the SEC. You should not place undue reliance on any forward looking statements. These statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

_

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(Amounts in thousands)

March 31,
2005
 December 31,
2004
ASSETS            
CURRENT ASSETS:  
  Cash and cash equivalents   $ 98,225   $ 129,419  
  Accounts receivable    245,668    242,014  
  Inventories    136,601    132,282  
  Deferred taxes    20,547    20,485  
  Other current assets    32,948    31,960  
    Total current assets    533,989    556,160  
PROPERTY, PLANT AND EQUIPMENT, NET    97,312    97,949  
OTHER ASSETS:  
  Goodwill    1,153,237    1,144,035  
  Other intangible assets, net    497,749    487,173  
  Deferred taxes    29,246    34,205  
  Other assets    44,541    46,882  
    Total other assets    1,724,773    1,712,295  
TOTAL ASSETS   $ 2,356,074   $ 2,366,404  
LIABILITIES AND STOCKHOLDERS’ EQUITY  
CURRENT LIABILITIES:  
  Accounts payable   $ 59,939   $ 65,801  
  Accrued liabilities    131,968    145,880  
  Deferred taxes    4,330    5,342  
  Current portion of long-term debt    36,338    36,527  
    Total current liabilities    232,575    253,550  
NONCURRENT LIABILITIES:  
  Long-term debt    844,539    855,364  
  Deferred taxes    128,566    125,984  
  Other liabilities    17,411    17,420  
    Total liabilities    1,223,091    1,252,318  
STOCKHOLDERS’ EQUITY:  
  Common stock    437    436  
  Additional paid-in capital    653,062    645,373  
  Retained earnings    438,674    415,188  
  Accumulated other comprehensive earnings    63,870    76,249  
  Treasury stock    (23,060 )  (23,160 )
    Total stockholders’ equity    1,132,983    1,114,086  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 2,356,074   $ 2,366,404  

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)

Three months ended
March 31,
2005
 2004
Net sales     $ 333,837   $ 220,640  
Cost of sales    171,213    111,202  
Gross profit    162,624    109,438  
Selling, general and administrative expenses    110,760    76,466  
Income from operations    51,864    32,972  
Interest expense    10,377    6,903  
Other income/(expense)    12    23  
Earnings from continuing operations before  
   income taxes    41,499    26,092  
Income taxes    13,488    7,958  
Net Earnings   $ 28,011   $ 18,134  
Earnings per share:  
  Basic   $ 0.66   $ 0.49  
  Diluted   $ 0.65   $ 0.49  
Weighted average common and common  
  equivalent shares outstanding:  
    Basic    42,461    36,706  
    Diluted    43,157    37,286  

Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)

Three months ended March 31,
2005
 2004
Amount
 %
 Amount
 %
Net sales:                    
  Instrumentation   $ 54,506       $ 49,125      
  Industrial Technology    102,487        93,118      
  Energy Systems & Controls    40,315        32,077      
  Scientific & Industrial Imaging    44,258        46,320      
  RF Technology    92,271        —      
    Total   $ 333,837       $ 220,640      
Gross profit:  
  Instrumentation   $ 31,605    58.0 % $ 29,231    59.5 %
  Industrial Technology    44,913    43.8 %  37,485    40.3 %
  Energy Systems & Controls    20,237    50.2 %  17,618    54.9 %
  Scientific & Industrial Imaging    24,702    55.8 %  25,104    54.2 %
  RF Technology    41,167    44.6 %  -     
    Total   $ 162,624    48.7 % $ 109,438    49.6 %
Operating profit*:  
  Instrumentation   $ 10,774    19.8 % $ 9,395    19.1 %
  Industrial Technology    21,334    20.8 %  15,727    16.9 %
  Energy Systems & Controls    7,953    19.7 %  4,801    15.0 %
  Scientific & Industrial Imaging    6,817    15.4 %  6,995    15.1 %
  RF Technology    11,173    12.1 %  -
    Total   $ 58,051    17.4 % $ 36,918    16.7 %
Net Orders:  
  Instrumentation   $ 52,970       $ 48,428      
  Industrial Technology    110,326        92,695      
  Energy Systems & Controls    39,644        33,894      
  Scientific & Industrial Imaging    44,947        45,070      
  RF Technology    83,285        —      
    Total   $ 331,172       $ 220,087      

  * Operating profit is before unallocated corporate general and administrative expenses. Such expenses were $6,187 and $3,946 for the three months ended March 31, 2005 and 2004, respectively.

Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands and percents of net sales)

Three months ended
March 31,
2005
 2004
Net earnings     $ 28,011   $ 18,134  
Depreciation    7,429    4,478  
Amortization    10,299    5,226  
Other, net    (7,116 )  (2,255 )
  Cash provided by operating activities    38,623    25,583  
Business acquisitions, net of cash acquired    (54,772 )  (12,042 )
Capital expenditures    (5,062 )  (2,546 )
Other, net    (968 )  (483 )
  Cash used by investing activities    (60,802 )  (15,071 )
Debt borrowings (payments), net    (8,407 )  (25,780 )
Issuance of common stock    6,548    28,879  
Dividends    (4,507 )  (3,542 )
Other, net    —    2,656  
  Cash provided (used) by financing activities    (6,366 )  2,213  
Effect of exchange rate changes on cash    (2,649 )  (602 )
Net increase in cash and equivalents    (31,194 )  12,123  
Cash and equivalents, beginning of period    129,419    70,234  
Cash and equivalents, end of period   $ 98,225   $ 82,357  

 
 
   

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