Roper Technologies, Inc. · NASDAQ:ROP
Roper Technologies — Roper Industries — Q4 2003 Earnings Presentation
31 slides from Roper Technologies's earnings presentation, Feb 19, 2004
Slide 1: 2003 Q4 and Full Year Results Conference Call
per Industries, Inc. 2003 Q4 and Full Year Results Conference Call February 19, 2004
Slide 2: Safe Harbor Statement
=) Safe Harbor Statement The information provided in this presentation contains forward looking statements within the meaning of the federal securities laws. These forward looking statements include, among others, statements regarding the benefits we hope to realize from the NTGH acquisition, our ab
Slide 3: 2003 Was a Very Successful Year at Roper Industries
2003 Was a Very Successful Year at Roper Industries =a
Slide 4: 2003 Commitments Made... Results Delivered
(ropes) 2003 Commitments Made... Results Delivered $657 Million of Net Sales Achieve Record Results $96 Million of Cash frem Op. Activities” Despite Market Conditions $2.01 of DEPS from Continuing Ops” 11 Year of Dividend Increases — Completed Acquisition of NTGH iBkxoamifo Iisa se Aceretive to Repe
Slide 5: New Structure, Strengthened Leadership Creates Results
New Structure, Strengthened Leadership Creates Results Organic Growth in 2003 +8.8% Qi Q Q3 Q4 Represent th yur verte esse mo gs oe ee nae Boe 5
Slide 6: Growth Continues Despite Challenges
Growth Continues Despite Challenges Net Sales DEPS from Continuing Operations Milions $657 $2.01 Sols $1.95 2002 2003 _ 30 Million Lower Sales to Gazprom 6 Million ($0.12 DEPS) of Restructuring Costs 2003 Ditted Eamings per Share (DEPS) excludes $16 Million of net det extinguishment cost
Slide 7: Recapitalization Expands Investment Flexibility
Recapitalization Expands Investment Flexibility Total Investment Capacity He Millions $205 ci $106 $70 $15 Cash Cash Undrawn = Undrawn__—_Total Total 2002 2003 Revolver Revolver Capacity Capacity 2002 2003 2002 2003
Slide 8: NTGH: Accretive in 2004
NTGH: Accretive in 2004 _ Great Fit with Roper Meets Disciplined Acquisition Criteria Offers Opportunities in Adjacent Markets Q Acquisition Immediately Adds: 30%+ to Roper’s Net Sales 40%+ to Roper’s EBITDA Accretion without Synergies Q Expands Roper’s Growth, Margins and Cash Flow ] Creates Solid
Slide 9: Focus 2003
fl 04 2003 Focus (=a
Slide 10: Year-Over-Year Change
Year-Over-Year Change 10.5% 11.8% 11.3% Imaging Industrial —_Instrumentation Energy Roper
Slide 11: Q4 Financial Results
(Thousands) Q4 Q4 he a Yr-Yr Comments “47% Net Sales $169,794 $159,068 + +9% Ex-Gazprom; F/X Benefit = 4% + Continued Strength in Oil & Gas and Wastewater Projects and TEM Imaging Gross Profit $89,080 $85,056 - FIX Effects 515% 53.5% + Yearend Inventory Adjustment Income from Operations As Reported
Slide 12: Focus on Operating Margin
Focus on Operating Margin Q4 2002 Operating Margin Restructuring Costs AMOT Yearend Inventory Adjustment Unfavorable Currency Changes on European Operations Selling in US $ Volume Leverage, Restructuring Benefits Q4 2003 Operating Margin 17.9% (0.4) (0.5) (0.5) 0.8 17.3% 12
Slide 13: Q4 Balance Sheet, Cash Flow
Q4 Balance Sheet, Cash Flow (Thousands) Q4 2003 Q4 2002 Cash from Ops As Reported 13,523 27,796 Ex-DebtExtinguishment 37,884 27,796 + +36% Costs * Record Performance Net Working Capital ‘Ag Reported eee + Q4 2003 Reduction in NWC Ex-NIGH Acquisition 130,982 oe ae 2 Ex-FX 124978 13168 ee Capital Stru
Slide 14: Q4: Scientific & Industrial Imaging
Q4: Scientific & Industrial Imaging Gatan * Media Cybernetics = Qmaging * Redlake * Roper Scientific Highlights Net Sales Up 6% on Gains Across Most Brands Lower Sales of Higher Margin Products for Physical Science Applications... Orders Up in the Quarter “1 Net Orders Down 3% Timing of Electron Mic
Slide 15: Q4: Energy Systems and Controls
Q4: Energy Systems and Controls Compressor Controls * Metrix Instruments Zetec Highlights () Net Orders Up 34% Continued Strength in Oil & Gas Project Orders ) Gazprom Sales Down 39% or $5.3 Million ( Gazprom-Related Cost Structure Has Been Reduced in Q1 2004 _] Operating Margins Maintained at 20.4%
Slide 16: Q4: Industrial Technology
Q4: Industrial Technology ‘Abel Pump * AMOT * Cornell Pump = Flow Tech. * Fluid Metering * Hansen = Roper Pump Highlights ) Net Orders Up 11% _| Continued Strength in —_] New Focus on Systems Business ) Operating Profit Margins Maintained ) Industrial Markets Showing Marginal Water/Wastewater Projec
Slide 17: Q4: Instrumentation
Q4: Instrumentation Acton Research * Antek = Integrated Designs * Logitech = PAC * Struers = Uson Highlights _) Net Orders Up 12% _1 Third Consecutive Sequential Improvement in Net Sales 1 Record Instrumentation Sales to Oil & Gas Customers _1 Operating Profit Margins Increased 190 bps to 21.1%, Hig
Slide 18: 2004 Full Year Focus
fl 2004 Full Year Focus
Slide 19: Roper's Niche Markets Stable or Improving
(ropes) Roper’s Niche Markets Stable or Improving Improving Peak + Water/Wastewater * Oil&Gas + Life Science Applications +US Industrial All Segments Positioned for Improying Results as Markets Strengthen 19
Slide 20: 2004: Scientific & Industrial Imaging
=) 2004: Scientific & Industrial Imaging REDLAKE ROPER SCIENTIFIC Effective Relationships with Chip Suppliers are Critical = Producibility of Scientific Design = Calibration of Cameras ™ Reach Customers through Complicated Distribution Channels m Hamess the Power of the Roper Brands; Imaging Allianc
Slide 21: 2004: Energy Systems & Controls
=) 2004: Energy Systems & Controls CONTROLS ee COMPRESSOR iS CORPORATION PMC/BETA ™ Software Creates Customer Value m Aftermarket Applications Require Direct Involvement with End Users ™ Scrvice and Installation Require Company Specific Knowledge; Creates Strong Customer Loyalty = Customer Operator
Slide 22: 2004: Industrial Technology
=) 2004: Industrial Technology Jy] HANSEN TECHNOLOGIES V1 conporanion FLUID weren Pun Tote = Continued Focus on Lean Manufacturing and Global Sourcing m Grow Aftermarket Sales m Negotiate Effective OEM Contracts = Follow Customer Migration to Low Cost Production Areas while Maintaining Influence wit
Slide 23: 2004: Instrumentation
=) 2004: Instrumentation m Product Specification Drives End-User Buying Decision = Operator Training and Ease of Use Creates Customer Value = Application Engineering Critical for Improving Customer Process m Global Customers Require Geographic Reach (1 Leverage Channel Leadership With Expanded Produ
Slide 24: 2004 Enterprise Initiatives
2004 Enterprise Initiatives Build On Market-Focused Segments Execute Segment Growth Initiatives Continue to Build Capabilities Across the Company Drive Down Net Working Capital Capture NTGH Opportunities Continue Strategic Acquisitions ni 2005) 24
Slide 25: Outlook for Continued Growth in 2004
Outlook for Continued Growth in 2004 Net Sal '875- DEPS ae a ee $2.45- $2.70 $657 $2.01 2003 2004 Diluted eamings per share (DEPS) excludes debt extingushonent costs, discontinued operations and NTGH inventory revaluation costs. 2003 DEPS includes $6 million of restructuring costs. 25
Slide 26: Quarterly Growth Profile
=) Quarterly Growth Profile 2003 Net Sales 1 QL 2004 Includes $1 Million Cost for Restructuring Including Uniting AMOT Operations and Right-Sizing Gazprom-Related Operations ©) Q2 Includes Sequentially Higher Revenues from Oil & Gas and Wastewater Projects and Seasonally Stronger Results ) HI Includ
Slide 27: DEPS Growth Profile
=) DEPS Growth Profile Hi wm ) HI Includes Higher Costs to Meet Sarbanes-Oxley Act and $1 Million of Costs to Complete Restructuring Initiatives ©) Q2 Includes Sequentially Higher Revenues from Oil&Gas and Wastewater Projects and Seasonally Stronger Results ©) Expect Improving Results Throughout 200
Slide 28: Guidance Range Dynamics
Guidance Range Dynamics 245 $ | Imaging Solutions Growth 1 Quicker AMR Adoption (1 Wastewater Projects 1 Gazprom Upside Capture NTGH Benefits | Faster Market Growth C1 Continue 2003 Improvements Special Cap-Ex Tax “1 Oil & Gas Market Strength Deduction Stable or Growing Markets 4 Semicon Fab Cap-Ex
Slide 29: Summary 2003 Results Delivered with Strong Second Half
Summary 1 2003 Results Delivered with Strong Second Half © Restructuring Completes in Q] 2004 Markets Stable or Improving Q Cash Flow Up Significantly in 2004 $140 to $160 Million QO NTGH Accretive in 2004 Off to a Good Start in January Q New Capital Structure Provides Flexibility O Market-Focused L
Slide 30: Roper Industries, Inc.
per Industries, Inc.
Slide 31: Reconciliations and Definitions
Reconciliations and Definitions Cash DEPS [Note 1: ash Eamings per Share means dilted eamings par share phs depreciation and amoxtization pe dated share 32