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Roper Industries Inc. Reports Operating Results (10-Q)

November 05, 2010 | About:
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10qk

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Roper Industries Inc. (ROP) filed Quarterly Report for the period ended 2010-09-30.

Roper Industries Inc. has a market cap of $6.71 billion; its shares were traded at around $72.15 with a P/E ratio of 25.1 and P/S ratio of 3.3. The dividend yield of Roper Industries Inc. stocks is 0.5%. Roper Industries Inc. had an annual average earning growth of 17.1% over the past 10 years. GuruFocus rated Roper Industries Inc. the business predictability rank of 4-star.ROP is in the portfolios of Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.

Highlight of Business Operations:

Net sales for the quarter ended September 30, 2010 were $605.1 million as compared to $485.7 million in the prior year quarter, an increase of 24.6%. The current year quarter results included $57.8 million, or a 11.9% increase, in sales from acquisitions completed in 2009 and 2010 . We experienced a 13.7% increase in organic growth, and a 1.0% negative impact from foreign currency exchange.

In our Industrial Technology segment, net sales were up 23.5% to $161.2 million in the third quarter of 2010 as compared to $130.5 million in the third quarter of 2009. The increase was due to broad based sales growth in all operating companies in this segment, led by significant sales growth in our Neptune water meter business as well as new products gaining market share in directional drilling markets. Gross margins increased to 51.1% for the third quarter of 2010 as compared to 47.5% in the third quarter of 2009 due to operating leverage from higher sales volume. Selling, general and administrative (“SG&A”) expenses as a percentage of net sales decreased from 24.1% in the prior year quarter to 23.2% in the current year quarter. The resulting operating profit margins were 27.9% in the third quarter of 2010 as compared to 23.4% in the third quarter of 2009.

Net sales in our Energy Systems & Controls segment increased by 19.9% to $123.5 million during the third quarter of 2010 compared to $103.0 million in the third quarter of 2009. The increase in sales was due to growth in all businesses in the segment, particularly in our sensor and diesel engine protection products. Gross margins increased to 53.1% in the third quarter of 2010 compared to 50.9% in the third quarter of 2009 due to operating leverage on higher sales volume. SG&A expenses as a percentage of net sales were 30.0% compared to 32.3% in the prior year quarter due to operating leverage from higher sales volume and lower cost levels resulting from the prior year restructuring activities. As a result, operating margins were 23.2% in the third quarter of 2010 as compared to 18.7% in the third quarter of 2009.

Our Scientific & Industrial Imaging segment net sales increased by 70.3% to $134.4 million in the third quarter of 2010 compared to $78.9 million in the third quarter of 2009. Acquisitions completed in 2009 added 53.9%, with 16.4% resulting from internal growth, primarily from strong sales in medical consumables and dosage delivery products. Gross margins increased to 61.5% in the third quarter of 2010 from 56.0% in the third quarter of 2009 due primarily to operating leverage on higher sales volume and higher gross margin contributions from 2009 acquisitions. SG&A as a percentage of net sales was 38.2% in the third quarter of 2010 as compared to 37.2% in the third quarter of 2009 due to higher SG&A expense structures at the 2009 acquisitions offset partially by operating leverage on higher sales volume. As a result, operating margins were 23.2% in the third quarter of 2010 as compared to 18.8% in the third quarter of 2009.

In our RF Technology segment, net sales were $186.0 million in the third quarter of 2010 as compared to $173.2 million in the third quarter of 2009, an increase of 7.4%. Acquisitions completed in 2009 and 2010 contributed 8.8%, offset partially by a 1.4% decrease in internal growth due to lower tolling project activity in the current year. Gross margins decreased slightly from 50.1% in the prior year quarter to 49.0% in the current year quarter. SG&A as a percentage of sales in the third quarter of 2010 was 29.0% up from 27.7% in the prior year due to higher cost structures at recent acquisitions. As a result, operating profit margins in the current year quarter were 20.0% as compared to 22.5% in 2009.

Net orders were $653.9 million for the quarter, 31.1% higher than the third quarter 2009 net order intake of $498.9 million. Orders increased across all of our segments as the economic recovery strengthened throughout the third quarter of 2010. Acquisitions made in 2009 and 2010 contributed 12.5% to the current quarter orders. Overall, our order backlog at September 30, 2010 was up 39.0% as compared to September 30, 2009.

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