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Roper Industries' CEO Discusses Q3 2011 Results - Earnings Call Transcript

Stocks in this article: ROP

And now, if you please turn to Slide 3. I'll turn the call over to Brian Jellison, Roper's Chairman, President, and Chief Executive Officer. After his prepared remarks, we'll take questions from our telephone participants. Brian?

Brian D. Jellison

Thank you, John, good morning everybody. We'll start off with a quick overview of the Q3 financial results and then talk specifically about the segment performance and outlook for the fourth quarter, update you on our guidance summary and then I’ll open it up to questions and answers. So, first slide.

If we look at the Q3 financial results, once again, they were an all time record for any quarter in the history of the company, not just a record third quarter. Orders were at the highest level and history sale is the same. Backlog, the highest level, net earnings, the highest level, and operating and free cash flow in the quarter set a new standard for the company.

Our total sales in the quarter were up 18% and organic sales were up 13%, which was frankly better than expected. Our book-to-bill was greater than 1.0 for the ninth straight quarter, and our record backlog of $876 million is up $106 million from the third quarter a year ago.

Operating margins were terrific throughout the enterprise. They were up 230 basis points so that operating margin was 23.5% of revenue in the quarter. Our EBITDA was $203 million in the quarter, which is a fairly astonishing number by any standard, and EBITDA margin was 28.6%. Our operating cash flow was 23% of sales at $167 million, and our free cash flow was 22% of sales at $157 million.

Next slide. If we look at the income statement, you can see bookings again were above 1.0 at 1.01. Net sales were, as we said, up 13% organically. Gross profit picked up 50 basis points from a year ago. Our operating income was up 30% from $128 million to $167 million, and margin at 23.5%, up from 21.2% in the third quarter a year ago.

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