Roper Well-Positioned for 2006


Roper Industries reported record sales, profitability and cash flow for the fourth quarter and full year ended December 31, 2005. Fourth quarter net sales were $393 million, operating cash flow was $105 million, net earnings were $50 million, and diluted earnings per share (DEPS) were $0.57. For the full year,...

... net sales were $1.45 billion, operating cash flow was $281 million, net earnings were $153 million, and DEPS were $1.74. Fourth quarter and full year DEPS include $4 million of net earnings benefit from the repatriation of foreign earnings and the non-cash write-off of issuance costs related to the Company's senior subordinated convertible notes.

"We are pleased to conclude 2005 with continued record-setting performance in the fourth quarter," said Brian Jellison, Roper's Chairman, President and CEO. "All of our segments reported growth, leading to a 42% net sales increase over the same quarter last year. This reflects the benefits of our recent acquisitions. Despite unfavorable currency exchange effects that reduced internal sales growth by nearly 4%, we achieved net internal sales growth of 5% or 9% before the currency impact. We leveraged our sales growth into a 170 basis point year-over-year improvement in operating margins, achieving Q4 margins of 20.6%. Our cash flow expanded substantially demonstrating the success of our focus on growth and cash returns."

Fourth quarter operating cash flow increased 67% over the prior year comparable period and full year operating cash flow grew 71%. 2005 results include record performance in net working capital efficiency, as well as the benefits from utilizing net operating loss carry forwards from recent acquisitions. In the fourth quarter, net working capital was reduced to 13.8% of annualized quarterly sales. Fourth quarter EBITDA grew 77% to $97 million, or 24.8% of sales. The Company reported full year EBITDA of $335 million, 64% higher than the prior year.

"I am pleased that we achieved our business objectives in 2005," said Mr. Jellison. "We successfully integrated TransCore, acquired in December 2004. We continued our internal growth and cash flow momentum throughout the year. We put our expanding cash flow to work, acquiring three high-quality growth businesses in 2005. At the same time, we made progress towards our long-term objective of achieving investment grade status, reducing our net debt-to-net capital ratio to 40.2% and improving our debt-to-EBITDA ratio to 2.7x. This positions us well as we enter 2006."

In 2006, Roper expects full year EBITDA of at least $390 million and operating cash flow of at least $280 million. Full year DEPS are expected to be in the range of $1.95-$2.07. Consistent with recent year performance, the Company expects increasing quarterly performance throughout the year, with first quarter DEPS of $0.37-$0.40. 2006 DEPS guidance includes equity compensation expense related to the implementation of SFAS 123R. The Company's guidance does not include benefits from future acquisitions or the potential dilutive effects resulting from the Company's convertible notes.

Roper Industries is a diversified industrial growth company with more than $1.4 billion of revenues. Roper provides engineered products and solutions for global niche markets, including water, energy, radio frequency and research/medical applications. Additional information about Roper Industries is available on the Company's website at

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