Roper Industries, Inc. (NYSE: ROP) reported financial results for the third quarter ended September 30, 2009.
Net earnings for the third quarter were $56 million, or $0.61 per diluted share. Excluding restructuring expenses, adjusted net earnings were $58 million, or $0.63 per diluted share. Sales during the quarter were $486 million, an 18% decrease compared to the same period in 2008. Orders were $499 million, and represented 103% of sales, marking the first time since the second quarter of 2008 that orders exceeded sales. Operating cash flow was $87 million, or 18% of revenue, bringing year-to-date operating cash flow to $248 million. Free cash flow (operating cash flow less capital expenditures) during the quarter was $81 million, representing 143% of net income in the quarter. Year-to-date free cash flow is $229 million, or 137% of year-to-date net income.
"More than half our businesses experienced greater than 10% growth in orders over the second quarter, and this improvement in order momentum is expected to continue in the fourth quarter," said Brian Jellison, Roper's Chairman, President and CEO. "Although sales in the quarter were 4% lower than second quarter levels, in part due to some orders shifting to the fourth quarter, we were pleased with the performance of our businesses in terms of margins, cost controls and cash flow. In addition, we increased cash and liquidity during the quarter with a successful $500 million 10-year bond offering that increases our flexibility as we pursue strategic acquisition opportunities."
Operating margin was 18.9% in the quarter, or 19.5% excluding restructuring costs. Decremental margin (change in operating profit divided by change in sales), excluding the RF segment was 34% in the quarter, including the cost of restructuring, and 31% excluding restructuring costs. "Our decremental margin performance again demonstrated the success of our operating model, with its focus on breakeven analysis and quick payback restructuring actions," Mr. Jellison concluded.