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Roper Industries Inc. (NYSE:ROP)

Q2 FY08 Earnings Call

July 25, 2008, 10:00 AM ET

Executives

John Humprey - VP and CFO

Brian D. Jellison - Chairman, President and CEO

Paul J. Sony - VP and Controller

Analysts

Jeffery Sprague - Citigroup

Michael Schneider - Robert Baird

Wendy Caplan - Wachovia

Alexander Blanton - Ingalls Snyder

Matthew Somerville - KeyBanc

Deane Dray - Goldman Sachs

Shannon O'Callaghan - Lehman Brothers

Operator

Ladies and gentlemen, the Roper Second Quarter 2008 Financial Results Conference Call will now begin. Today's call is being recorded. At this time, I will turn the call over to Mr. John Humprey, Chief Financial Officer. Mr. Humprey, please go ahead sir.

John Humprey - Vice President and Chief Financial Officer

Thank you. Thank you all for joining us this morning, as we discuss the results of our second quarter performance. Joining me this morning is Brian Jellison, Chairman, President and Chief Executive Officer, and Paul Sony, Vice President and Controller.

Yesterday afternoon, we issued a press release announcing our second quarter financial results. The press release also includes telephonic replay information for today's call. We've prepared slides to accompany today's call which are available through the webcast and also available on our website which is www.roperind.com.

Now if you'll please turn to Slide 2. You'll once again see our Safe Harbor statement. I want to remind you that today's call will include forward-looking statements which are subject to risks and uncertainties as described on this page, additional information of our specific risks are included in our SEC filings. You should listen in today's call in the context of all that information.

Now if you'll please turn to Slide 3, I will turn the call over to Brian Jellison, Chairman, President and Chief Executive Officer. After his prepared remarks we'll take questions. So with that, Brian.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Thank you John, and good morning everyone.

If we move to what is labeled Slide 3, Roper second quarter 2008 overview. I'll start with the fact this was a record financial performance quarter by virtually any measure, and when we say a record, we don't just mean a record second quarter, we mean a historical record quarter for any quarter in the history of the Company.

Our orders were $606 million. Our sales were $594 million. Our net earnings were 76 million. Our EBITDA performance was $151 million in the quarter, and our DEPS number is $0.80. And as many of you just noted there is a little noise in that number, and certainly be viewed at a much higher rate. We had some specific challenges in the quarter, imaging which we're going to talk about.

We can't really excuse the performance from imaging in any way. But it can be put in context, so that it's more clearly understood. Then we had the Middle East toll project comparison, which has a lag on what's happening in terms of internal growth in the company, we'll explain that. The reality is it's in a wonderful situation for from us this quarter forward.

And then third, we had a special charge which as, you know it's very unusual for us to have or to take, and we'll explain what happened around there. Then, we'll look at the financial results and some perspective about our results, some strategic things that occurred in the quarter, and then a review, a little more granular review of the four segments, and then an update on the guidance for Q3 and the rest of the year. So if we turn to the next slide.

You'll see challenges in the quarter. For us the organic growth comparison due to the 2007 mid-east tolling project, where it was starting up in installation with quite a bit of revenue, and not a lot of income, which is the way a project like that starts. Made it an extremely difficult comparison from a pure organic revenue number, but not a difficult comparison as you can see from our margin numbers. That was a drag on organic growth in our quarter of 2%.

Then in terms of imaging which had disappointing performance and which was completely off plan. Their sales and margin performance reduced our overall organic growth number by 2% as well. What happened to them is that they had a number of OEM customers who had slower than expected sales commitments from them.

And today I had done a specific series of product development projects for three different people, and those were to ship in the second quarter and third quarter, and in reality they seem to have been pushed back until later in the year. That pushback resulted in them missing their cost structure because they have the unrecovered product development costs that they expected to be offsetting against the revenue in those businesses.

What's really amazing, and I know it's absolutely true on a nominal basis. You could see Q2 decelerating from Q1. If you exclude, the mid-east project and you look at all of the rest of the business and Roper with the exception of imaging, we had exactly the same 8% organic sales growth in the second quarter that we had in the first quarter. Imaging added one in Q1, so you saw seven. If we neutralize imaging, you get eight in the first quarter for everything and eight in the second quarter for everything.

So we do not have an organic growth problem. We have an imaging problem, and that is being aggressively addressed.

We spent last Friday with imaging. We had a meeting again last night with some of their control function people, and we will be meeting some of them again next week. They have a series of plans in place, and we expect a lot of results out of imaging in terms of cost issues.

And then thirdly, we have this special $3.5 million charge for Neptune. Thank goodness, Neptune has world class manufacturing and incredibly fine quality control operation. And it was noted that we had 10-meters, which had what appeared to be some kind of problem. And they were able to take those ten and really diagnose what was going on. And we got a bad component supplied by normally good vendor. We're talking to him about that.

But because we have to find those particular items, and it's a small number of meters compared to the total number that we've shipped. We're going to have some considerable labor costs around that in terms of field repair. And we felt obligated to book that expense which is what we did at $3.5 million pre-tax, once your tax have been divide by the share count, you can see what that did in terms of earnings per share number.

More importantly, it masked the incredible operating margin and gross margin performance in the quarter, and even with that it was outstanding. But that took 190 basis points off of our operating margin in industrial and it took 60 basis points off of our full enterprise number. Now, despite those difficulties in the quarter, we had a record performance against virtually every measure. So if we go to the next slide. As we said, orders, backlog, the sales, the earnings, EBITDA, and diluted earnings per share, all a record for any quarter in our history.

Our as reported sales are up 12% that comes from acquisitions of about 6%. Our internal growth if you exclude the Middle East project but allow the negative drag on the imaging performance was still up 8%. And on a nominally reported basis you can see it was 6% with 2 points of FX. On the orders line, orders were up 14%, internal growth again at 8% excluding the Middle East project, and we'll talk more about that as we go through the morning.

With the reported internal growth as you can see at 5 with 2 points of FX. The gross margins in the quarter were up 200 basis points. The Company feels particularly good about that because as we've noticed everybody reporting, you see margin deterioration and very many companies with cost push inflation on material and energy costs. And instead of having lower gross margins, they're actually up 200 basis points in the quarter, and that includes the 60 bps special charge that we had to take for the vendor issue.

Net earnings were up 24% to $76 million, and the diluted earnings per share were at $0.80, up from $0.66 in the second quarter of '07. Operating cash flow was particularly strong for a second quarter at Roper. It was up to $96 million which represented about 16.2% of revenue. And given what we have here and what we'll talk about on a segment-by-segment basis. We feel particularly good about the second half growth and are confident that we'll report record operating cash flow for the full year.

Next slide, we put the enterprise book-to-bill ratio slide in here. Just so we can once again get you to maybe focus on the exceptionally unusual nature of this Middle Eastern project that we had, which we initially started to book in the fourth quarter of '06. As you can see if you go up and down a range of 3% to or negative 3%, our book-to-bill ratio comes in between 0.97% and 1.03% most of the time.

And here in the second quarter our book-to-bill ratio for the company came in at 1.02%, sort of the high end actually of those kind of variances, and the highest book-to-bill we've had since the first quarter of '07. We have very fast cycle times in the company, and frequently we're on kind of a two to four month window of activity. So if somebody push something out or we pull something in, you can have some variances in the quarter. But on balance it's a pretty wonderful set of businesses that are delivering consistent growth for us.

Next slide, Q2 strategic wins. Really in addition to running the business and a lot of good things about it, some very important things occurred. When we go back to talking about the Middle East project and we're reading some of the things we said in the past about it. We described that really as missionary work, and it was. It's certainly very far a field of the normal activity that we've been involved in historically at TransCore.

It's a long way from Florida and Texas, and Washington. What was done there was nothing short of spectacular. And while initially you put a lot of dollars into the design and the installation and the equipment pass through, once you get to our pure hardware and our tags, then you get what the whole process was about. So it did have a drag on organic growth in the quarter for 2%, but that's not negative income or negative cash.

And it forms a baseline for continuous secular growth in that project, and other projects that we think will impact us in the future because we now have a turnkey case study and we have had a very large number of visitors to look at this project to see how they could implement a similar thing in their various countries. We move to the second point, Neptune was selected by Toronto, Canada, to enter into contract discussions to supply the city and area of Toronto with a water automated meter reading project.

The potential for that based on the City Council and the Toronto Globe made a report it's a little over $190 million over a multi-year period, and contract discussions with the City are in place. Assuming that everything goes well, we could start to see orders for that perhaps as early as the end of this year with shipments beginning in the first quarter. At this time we can't book any of that order flow, until we finalize the contract and have it. But the selection has been made that if will be Neptune and our business.

The third area similar kind of break through was the Florida Turnpike has decided to move to our eGo Plus sticker tag technology, this is similar to what happened in Texas a year-ago. We've got an order in-house for 1.5 million tags, a significant portion of that will be shipping now. And we also had a phenomenal second quarter out of CBORD which is a big success story for us.

It's immediately helped as we knew it would, you can see that, in terms of the gross margins and the RF segment. You can see it in terms of the operating margins in the RF segment. And the story around CBORD, we think will just continue to get better over the next couple of years. We've seen a number of adjacencies. We have a variety of projects under way and frankly see some acquisitions in this space that are going to expand CBORD's reach.

Lastly on the significant wins is a recapitalization of the debt structure of Roper. We had our debt basically expiring in 2009. We have a convertible security that was due in January, and we had the rest of the debt structure due later. We were able to move from a secured credit facility to an unsecured credit facility, and that resulted in Moody's upgrading the company to investment grade status, and we'll talk about the significance of that a little later this morning. All of those five things really helped position the company for long-term consistent growth.

Next slide. Here we'll begin to talk about the second quarter results in terms of a nominal straightforward America look. The income statement, as you can see net sales were up 12%. We exclude the Middle East project they were up 8% internally. The gross profit up from 49.4 to 51.4 would have been of course 52 without the special charge. Income from ops up 17% that of course included the $3.5 million charge, so if you think about leverage and ratios, that 19 if you add 3.5 to your 22.5 on a revenue variance up there about 63, so it's an outstanding capture of the incremental margin.

Interest costs actually helped us in the quarter, because we had a terrific amount of cash with $96 million coming in, and transaction that we're going to talk about later occurred just at the end of the quarter one just in the past week, so we had a bit more cash on hand. That saved us about $3 million in interest costs compared to the prior year, and that $3 million largely offset the special charge for $3.5 million, so that was beneficial to us.

The net earnings as you can see are up 24%, or sales up 12, net earnings up 24% and the earnings per share at 80 include the $3.5 million charge, and they also include another penny cost for the increased shares associated with the convertible security product.

Next slide. Here we look at trend of our trend line information and how that continues to move forward. Our trailing 12-month revenue was a $1.566 billion at the end of the second quarter in 2006. Last year that trailing 12 months revenue had reached to $1.902, and this year our trailing 12 months revenue has reached $2.230 billion.

Our EBITDA has gone up from $378 million just two years ago to $473 million last year, and up another $95 million this year to 568 million. Beneath those bars are the trailing 12 months EBITDA, you will see our EBITDA margins on the 12-month period ending Q2 '06 were 24.1%. And this year they're up to 25.5%, so we continue to get the consistent expansion in our margins that you should have become used to.

Next slide. Here if we look at the cash generation, it was particularly strong for Q2. Last year, our operating cash flows as a function of revenue was 14.8% in the quarter. This year it is up 130 basis points to 16.1% in the quarter. Our net working capital has gone down once again in the second quarter second.

We picked up a 40 basis points improvement as we look at net working capital as a function of revenue. In the second quarter declined to 10.4% compared to the prior year, and our first half operating cash flow has already reached to $167 million, up 23% from last year.

Next slide. Our financial capacity continues to grow and this slide probably doesn't detect just how powerful our cash machine has become. You can see on June 30th this year, we had $120 million of cash… $146 million, I am sorry. The net debt was right exactly $1 billion, so net debt is up $70 million from a year ago.

However, we've invested $406 million in the last twelve months in acquisitions which are driving improved EBITDA performance, and only increased $70 million in debt, so that our metrics are actually better than they were before the $406 million investment of the past twelve months.

Our net debt to debt cap has dropped from 36.4 to 33.8 at the end of the second quarter. EBITDA is up from 473 to 568. Our net debt-to-EBITDA as a ratio has dropped from 1.97 to 1.76, and our EBITDA to interest coverage ratio has gone from 9.55 to nearly twelve times. That gives us a lot of capacity to take advantage of what's a very target rich environment in the acquisition arena.

Next slide. Here is commentary around Moody's that we think we certainly appreciate. You can see that they made an upgrade to Baa3 status as investment grade. Each one of these categories you can see on the website about how they're rated. You'll see some AA ratings and A ratings on Roper. The indicative rating for Roper would be BAA1 which is two notches above the current rating we have, and implies the strength of the directions we've driven the company.

Here you can see the their own… the upgrade considered the significant improvement in Roper scale and diversity characteristics achieved over a period of time through a number of well-executed acquisitions, as well as the company's demonstrated inherence to a disciplined financial policy, including modest usage of leverage and maintenance of adequately liquidity at this despite the inquisitive growth strategy. So we thank Moody's for recognition, and all of the people who made those miracle numbers possible.

Next slide. New acquisitions since we last talked with you. We've had two important acquisitions. One is a pure bolt-on where we're going to say a UK company called Chouen. We're going to integrate that into our AMI business. It's another shut-off valve manufacturer that the marine industry and engine industry can use for safety protection.

And then we've made a more significant acquisition of somebody that's in our TransCore freight matching space. This is a really a leader in terms of the number of owner operators that subscribe to that service. They actually have about 30,000 people subscribing to their service. It's a low cost provider with a lot of entry level services. By acquiring this business we get an interesting in-flow of people that become first time participants in the process.

They can stay with the company that we've acquired. We also have an opportunity to upgrade them into our broader band of services. There are some synergies associated with this, and we're going to do the integration of this over months, not days. It is a very, very helpful high margin business very light asset business, not a lot of sales in here because the margins are really high, and variable cost of winning a customer is very low, but still a terrific business.

We've indicated to you that $97 million investment ought to produce more than $11 million of EBITDA in 2009, and the pipeline we have for continuing acquisitions we can assure you is quite full.

Next slide, here if we look at the segment performance of the four segments. We want to focus for just a minute about the relative importance of these businesses because our industrial segment which includes Neptune represents 31% of our total revenue. You can see their EBITDA performance is 29%. Our radio frequency business has caught up actually to the industrial businesses it's now neck-and-neck with them in a race at 29%.

And RF business is now up at 51% gross margin, so let's hear it for CBORD. And then you move over and you see energy. Energy is at 28% EBITDA. Those three businesses represent 85% of our company. And then we have our imaging business which had such disappointing performance in the second quarter, we want to remind ourselves it is only 15% of the enterprise and inside that of more than a fourth of its our medical business, which we could move into any one of these three graphs on the left hand side.

So it really is the camera businesses that have frankly spent a lot of money in R&D to deliver products that people aren't yet ready to buy. And we're going to have to sort through that here in this quarter. We can take a look then at the total enterprise gross margin 51% EBITDA margins at 25, we've put all of our unallocated corporate costs into that category. And we'd say again that while imaging can't be excused, it can't be put into context.

Next slide. On the industrial technology front again 31% of our revenue, you'll see sales were up 14%, orders were up 2%, and operating profit margins were up 90 basis points over the prior period to 26%. That would have been higher number if we hadn't had the charge. On an internal basis there it gets a little bit tricky. The internal sales number of course because there are no acquisitions is up 14%, but the internal order number was only up 2.

And the reason that's only up 2 is not because we had light orders but because in the second quarter last year we booked some very large jobs, Raleigh, North Carolina, and several other places for Neptune. So we had very basically flat order situation or less there but very strong order performance for all the rest of the business. On an internal growth basis virtually every one of our industrial businesses save one was up more than 10%, and that story line is still very strong and in fine shape.

In this third quarter, we would expect that the internal growth in this segment will return to a more normalized number. The results we said include the $3.5 million special charge. The orders growth was impacted in the quarter, had everything gotten finished with somebody like Toronto or one of the other project pipelines, you wouldn't have seen this kind of temporary lag in internal orders.

Very strong operating performance across the board, we just finished our quarterly review, with those people. everybody in the room save this one guy felt they would do better in the second half than the first half, and when you look at leverage $41 million of operating profit a year ago, $48 this year, booking $3.5 million would have been $1.5, $10.5 million of new operating profit on what looks to me like $22 million of sales. That's a ratio most people could live with that up 48%.

Okay, next slide here we're looking at our radio frequency business. A business it's 30% of Roper sales as we speak, certainly CBORD's addition to this has helped the importance of RF in our total portfolio. Sales were up 17%. Orders were up 32%. Our operating profit margins went up 330 basis points to 23.8% compared to a year ago.

Now the internal numbers look a little different. The internal numbers are down 1%, but again this is all about the Middle East project, and of course, the fact that CBORD grew dramatically in the quarter, but goes to acquisition revenue. It doesn't go to our baseline. If it were in our baseline, you would have seen very strong double-digit order growth out of that business.

Orders were up 6%. The transition the transfer guys have been able to make in the mid-east is really a wonderful thing. And if you exclude that projects kind of dig through the python situation, you find internal sales in the quarter were down 1%, but were up 5 and that internal orders were actually up 17% in the quarter. Our CBORD was off to a terrific start, they had an all-time record quarter, they got their prepaid for variety things. Their subscription revenue was up well above 15%.

Each one of the businesses that we have in here has a very solid program in place to continue to improve margins and they looking particularly in the traffic design area, and John has done great work on getting the projects an service margins are up which is helps us. And of course getting out of the installation phase in the Middle East helps us., and we're positioned very well we think for a strong third and fourth quarter in the second half.

Next slide. Here we look at Energy Systems and controls. It's now 24% of Roper's. Our revenue, its sales were up 15%. The orders were up 13%. Operating margins improved 90 basis points to 24.6%. Most of this is internal as you can see internal sales were up 11%, internal orders were up 9%. We continue to have strong demand for the control systems that we produce, the sensors that we provide and the other protective technologies that were used out in oil and gas markets and green applications.

The acquisition that we've made, and there are these bolt-ons over the last two years are all performing well. Of the operating leverage, we continue to get, because as we bring out new products they tend to have better margins. And this bolt-on acquisition that we mentioned in the UK, the Chouen guys, are going to give us a broader family of products like Roda Deaco for Western Canada for Europe and Asia, so we think that will really improve our suite of products to offer.

Next slide. On scientific and industrial imaging, last and in this case least, I suppose, it certainly was an unacceptable quarter. Their sales were down 3%, their orders were up 3, there operating margins declined 210 basis points compared to the prior year. Internal sales weren't really any better. You can see they were down 1 and orders were up 5, so they're encouraged by the orders, but expect orders to be up substantially more than that.

They've got a lot of excuses. We said it was like watching the British Open the other day. Lots of headwinds, lots of terrible execution, but wonderful reasons why, and you could all understand them. And as we went through all of this with them, we were empathetic to the reasons articulated, but you still have to the make the shots, and they simply didn't. The OEMs have pushed out orders. That's really okay.

But at Roper, we don't really accept those things, so we'll have to take action in that area. The margin performance was just a failed process around their budgeting on product development. We had to listen to people humiliatingly say, well I guess, maybe, gee, oh, wow. The controller that's in that core business longer with the company, and we've gotten an aggressive overview, what's going on. We got a lot of current actions in place and talk more about that in the third quarter.

Next slide. Here we look at our guidance. The guidance for the rest of the year, and this requires a little bit of explanation as well, I think. Last year we earned 2.68. Our guidance going into yesterday was 3.13 to 3.21 of we raised the full year guidance to 3.16 to 3.22, but that includes eating the $0.2 or $0.03 or more of this special charge. So frankly, the guidance needs to be 3.19 to 3.25, in order for us to produce 3.16 to 3.22.

So we intend to produce between 3.16 to 3.22, based on us eating that special charge. So we've raised the guidance perhaps more than it looks like in our press release. In the third quarter, we expect to earn between $0.81 and $0.83. We have established operating cash flow guidance for the year at $390 to exceed $390 million. And then you can see our EBITDA, we've increased again to suggest that we will produce more than $610 million of EBITDA in 2008 and net earnings will exceed $299 million based on the low end of the guidance.

Next slide. Here is the conference call summary. We had, as we've indicated record performance across virtually every area. The organic growth trends are actually better than they can appear. I am sure there was a way for to us articulate that better in our press release, but we spent a lot of time on it with the best we could do. It is the fist time we put a table like that in there. We probably need to introduce as asterisks for you so that you can better understand it.

We're positioned for second half growth and record operating cash flow. The first half acquisitions that we've made are all contributing immediately. They are immediately crash accretive. No dilution in any of them. The new unsecured credit facility means that we can continue to move forward with our deal structure and not be faced with a risk of what kind of debt we would have going into 2009.

The upgrade at Moody's means long-term borrowing costs will be less than they were if we were simply a split-rated enterprise and more importantly right now it means that we've got access to the debt markets to do whatever we want to do inside our firm commitment to remain investment grade going forward. The Florida Turnpike Enterprise upgrade the eGo sticker technology is a major win for us, and we think it will prove to be so for the State of Florida.

The Toronto selection of Neptune to enter into contract discussions to put in place the process to fulfill this order for over $190 million is of course an enormous win, maybe the biggest water project that's ever happened in North America. CBORD off to a great start, record quarter, you can see why we love the business. All you have to do is look at the margin variations that we're already producing in RF.

Our backlog reached a record of $602 million, so that felt good to us. And the acquisition pipeline wanted only is attractive, but it's really exciting, and we think our guidance reflects that. And so we're positioned for more records throughout the year.

With that, we'd open it up for questions.

QUESTION AND ANSWER

Operator

[Operator Instructions]. Our first question we go to Jeff Sprague with Citi.

Jeffery Sprague - Citigroup

Thank you. Good morning, everyone.

John Humprey - Vice President and Chief Financial Officer

Morning.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Good morning, Jeff.

Jeffery Sprague - Citigroup

Brian, I'm wondering if you could give us a little bit of a backdrop of how Toronto evolved, what you think drove the decision in your favor and this is the second or third quarter in a row now where we heard about Mexico or Africa, and now it's Toronto? Maybe what else is kind of in the forward pipeline of things that you're working on, even if you can't name, name, so to speak?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Well Toronto is such a large thing. It's an enormous project. Just think about recently New York selected a fixed network system for high density application and doesn't involve us because it's not what we do. And everybody thinks that's wonderful, it's $30 million box or something, and this is $190 million, get out of here. It's an enormous job. We're going to be leading all the elements of the job, using a variety of different products that we have and some things we'll be acquiring from others. So we're very excited about that.

It confirms again to people that are considering big projects that we're the most sophisticated and most customer friendly group to deal with those, and there are other products you could buy which are less expensive. But on balance, people want accuracy and they want quality and they want friendly service and all of those things were important. This is a very long-term project that Dave Stoddard has been working on in Canada for Neptune. And they've put a lot of time and energy into this.

In Canada, unlike the US, we actually install the meter frequently for an additional fee. I think our track record in working in frozen tundra and having meters that don't leak, and digital readouts that work in a very tough environmental area was important. Now having said that, it's a public bid process, everybody knows what you bid in, and they know what our average price for the register is, they know what the meter was.

We were certainly low or the highest value producer if anybody and all the stuff is really public. There was a City of Toronto thing out there, we were reading through it again last night to make sure we weren't miss quoting anything. But there's a lot of negotiations still going on. The City has got to decide how fast it's going to roll this out, and what have you.

Now as far as other projects we continue to find a growing number of people who are deeply concerned about the accuracy of the reading of information. And this tends to be an opportunity that until last year, we probably were missing internationally. So we have quite a few quotes out, in places that you just wouldn't think about. Basically the stand countries, where they're realizing that, hey, you know what, I don't really know for sure what people are consuming, and it's about time I found out, because their consumption is something I want to discourage.

And I don't want third party people not telling me the truth about consumption. So we've really beefed up that activity. And I think we know better how to address this market. So I think that's good. Now having said that, I do think Neptune's going to have just a little bit of lumpiness. This quarter certainly people were very worried about us having decelerating internal growth because, we had out performance in the second quarter a year-ago and couldn't replace with the Raleigh project in the second quarter.

But, wow, if Toronto was something you could have booked then people would have blown through and say we had accelerating performance. So variety is over a continuous twelve-month measure period, we expect to move ahead.

Jeffery Sprague - Citigroup

Great. And then I guess on a similar vane, different business, as you indicated. Now that you've got a kind of firm marker in the ground, Turnkey in the Middle East, people kicking the tires on the idea. Could we… should we expect some new development there in the next whatever you want to call it, six months, twelve months, on the project side in some other area?

Brian D. Jellison - Chairman, President and Chief Executive Officer

I will say this. We've had a tremendous of amount of activity, because people, one, they like to go to the place and check it out. There are several peoples who have been there more than once. We are fielding a lot of questions about how that works. And there is some considerable international activity in and around that area, but we don't have any firm commitments from anybody about them rolling out something similar to what we've done here.

But we are effectively providing people with information about the design and cost structures and time for install and what have you. So I think we would be surprised if anything happened in the next six months, but I wouldn't rule it out, and I think it's more likely that neighboring countries or people who are visiting there and see the opportunity for it would think about deploying it.

I think the good news is unlike the US when an international player decides to deploy, they actually decide to deploy and they do it. You don't have a whole lot of issues because there tends to be less political pushback. Here you always have these kind of political things that draw things out for very long period of time. So clearly, if we didn't have the install base in the Middle East, we wouldn't have an opportunity to do another $100 million project, but because we've got it, and it is working flawlessly, it is giving us a lot of new opportunities. When we'll take advantage of those, I have no idea.

Jeffery Sprague - Citigroup

Great. Thanks a lot.

Operator

We go next to Mike Schneider with Robert Baird.

Michael Schneider - Robert Baird

Good morning, guys.

John Humprey - Vice President and Chief Financial Officer

Good morning, Mike.

Michael Schneider - Robert Baird

Sticking with Toronto for a second, is it a drive by, or is it a fixed network project, Brian?

Brian D. Jellison - Chairman, President and Chief Executive Officer

There are several different aspects. But we're going to be deploying what used to be the hexagram a fixed network for a portion of this that we will get from them and install ourselves with our radios and registers.

Michael Schneider - Robert Baird

So it's primarily a fixed network, maybe with some drive by on the periphery?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Right.

Michael Schneider - Robert Baird

Okay. And then do you anticipate supplying the underlying meters, as well I presume?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Yes, absolutely.

Michael Schneider - Robert Baird

Okay. And then the margin impact, when you had large projects like this in the past, the Middle East for example, in the tolling space generally been lower margin and we've talked about that several quarters as it's run through the P&L, is that going to be the case with Toronto in the industrial tech segment?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Nothing like the situation that you have with an install and traffic there won't… first of all, nothing Neptune does in flow, it won't be much of a drag. But there will be some stuff that's passed through and to the degree we have the pass-through and we'll give everybody plenty of warning around that. It will be in our guidance as things roll out. As these things rollout, that won't be… you can't take the 190 I assume a full normalized industrial EBITDA number on every aspect of it.

Michael Schneider - Robert Baird

Because there will be pass-through on.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Yes. Some, but you make money on everything. It's not like this kind of 6% to 8% margin work, 10% or margin work that you're doing. There is some install work, because Dave does a lot of install in Canada, and that's okay, doesn't type any assets, but it will still be quite substantial.

Michael Schneider - Robert Baird

Okay. And switching to tolling, the Florida order of 1.5 tags, at least I have learned that the first year projection of tag rollouts I believe was only 600,000, and I believe the early adoption just in the first three weeks of July was very strong. Is this a multiyear order or do they expect to actually exceed the initial estimate of 600 by more than 2?

Brian D. Jellison - Chairman, President and Chief Executive Officer

I wouldn't speak for them, but it's an immediate order. I mean we're making product and shipping product. It's not a multiyear order. This is just the initial order for the product.

Michael Schneider - Robert Baird

Okay, CBORD, final question. Just what type of growth if you look on their organic basis, are they growing at this point?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Mid-teens.

Michael Schneider - Robert Baird

Okay. Thank you and congratulations, guys.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Okay.

Operator

We go next to Wendy Caplan with Wachovia.

Wendy Caplan - Wachovia

Hi. Good morning.

John Humprey - Vice President and Chief Financial Officer

Hey, good morning.

Wendy Caplan - Wachovia

Brian, the imaging problems that you referenced, it is not really new news. This is a business that has been problematic for awhile. Can you sort of walkthrough for us what your… first breakout the camera business for us, so we know what we're dealing with today, and also your thoughts in terms of strategic actions that we might see regarding this camera business?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Well, I think that you will see some strategic actions. We brought back a terrific person who some of you know you know, Don Templeman who used to be involved in Gatan and was involved in Princeton Instruments and he use to run Cornell. And so he's had a lot of experience, and was our Investor Relations person for a while. And Don has done a terrific job in trying to rescue the Princeton camera business down there, and was instrumental in us being able to divest the Redlake Motion business.

We had Don join us on Friday, for a walk through of what Ben calls the micro imaging analyses group, which is containing Photometrics and Q. Photometrics has in past years used to be coupled up with Princeton as Roper Scientific. And Gatan felt that they could drive more out of Photometrics by getting it moderating with Gatan, and they have achieved that. They've driven more of the profit out of Photometrics, they've driven more of the organic growth out of it, and they managed to do everything that one worries about when you let people consolidate.

So that was a failed concept, and we worked with them all day Friday. We brought other people in. We brought people in who previously had responsibility for the business. And we are going to look strategically at what we want to do about this business because it's just flat out not acceptable. It's about half of the imaging segment. So I don't have that number in front of me but.

John Humprey - Vice President and Chief Financial Officer

Roughly $90 million.

Brian D. Jellison - Chairman, President and Chief Executive Officer

It's about.

John Humprey - Vice President and Chief Financial Officer

Its roughly $90 million in the quarter.

Brian D. Jellison - Chairman, President and Chief Executive Officer

So the cameras might have been 50 or something like that.

Wendy Caplan - Wachovia

Okay. That's very helpful. Thank you. And also the acquisitions that you mentioned, I don't think I heard you give us annualized revenue numbers, kind of if you could just?

Brian D. Jellison - Chairman, President and Chief Executive Officer

I will tell you, it's a sensitive matter for us. One of them is really a software business provider, and it's going to be married up with an existing situation. So it does tend to have extreme margins, and doesn't have as much revenue because its contribution margins are extreme. The other one, the Chouen business, when we put the two together we're talking about something that's going to have hey high, maybe twice Roper's EBITDA margins. And it's maybe going to generate $25 to $30 $35 million of revenue over the next 15 months.

Wendy Caplan - Wachovia

Okay. Thanks very much.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Lots of cash, lots of synergies, okay.

Wendy Caplan - Wachovia

Thanks.

Brian D. Jellison - Chairman, President and Chief Executive Officer

You're welcome.

Operator

We go next to Alex Blanton with Ingalls Snyder.

Alexander Blanton - Ingalls Snyder

Good morning.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Good morning, Alex.

Alexander Blanton - Ingalls Snyder

Just a clarification, you did $0.83 without that charge if you add the tax affected amount to the actual net income and compute it that way, it was slightly below that, but then you rounded up to 83. Was that in your guidance?

Brian D. Jellison - Chairman, President and Chief Executive Officer

The charge, no, what you mean the forward guidance?

Alexander Blanton - Ingalls Snyder

Yes, the guidance you gave us in the second quarter.

Brian D. Jellison - Chairman, President and Chief Executive Officer

The 3.16 to 3.22 includes eating the charge of that $0.03.

Alexander Blanton - Ingalls Snyder

I realize that. But the guide answers you gave us at the end of the first quarter was 77 to 79 for the quarter.

Brian D. Jellison - Chairman, President and Chief Executive Officer

We didn't know about that. We only learned about this in, literally the last week of June.

Alexander Blanton - Ingalls Snyder

Okay.

Brian D. Jellison - Chairman, President and Chief Executive Officer

And I just can't tell you what an incredibly great job Neptune did, to take ten meters and recognize that it's actually a component problem and how it's going to have to be resolved.

Alexander Blanton - Ingalls Snyder

Okay. That's great. So you did $0.83 versus $0.77 to $0.79 anticipated, right, am I right?

Brian D. Jellison - Chairman, President and Chief Executive Officer

I can't do that math for you.

Alexander Blanton - Ingalls Snyder

You're top in by $0.04 excluding the charge, that's what I am getting at.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Okay.

Alexander Blanton - Ingalls Snyder

I mean is anything wrong with that way of thinking?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Well listen, we're always instructed that we could tell you what the charge was.

Alexander Blanton - Ingalls Snyder

Yes.

Brian D. Jellison - Chairman, President and Chief Executive Officer

And we can tell you what the shares are. But we cannot do a calculation about that number. So we're conservative about that, and that's why we didn't in our press release say that exactly what that was.

Alexander Blanton - Ingalls Snyder

I don't understand these knitty-gritty things, but. Look I understand that it's a.

Brian D. Jellison - Chairman, President and Chief Executive Officer

But we don't necessarily understand it but comply with them.

Alexander Blanton - Ingalls Snyder

Okay. Now, S&P on the ratings situation, S&P raised their rating 2, but you didn't comment on that. Was that because you didn't quite get?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Yes, John, why don't you explain that?

John Humprey - Vice President and Chief Financial Officer

Sure, actually with S&P we had an existing shelf out there, it was registered a while back at the time when we were a low-rated company, when we went to an unsecured facility for our credit facility. That required S&P to take a fresh look at the shelf. So they came out with their upgrade for that shelf. We remain at BBB minus with us a stable outlook with Moody's as we have been throughout the last nine months.

Alexander Blanton - Ingalls Snyder

So what is this S&P's rating on you?

John Humprey - Vice President and Chief Financial Officer

S&P is at a BBB minus with us a stable outlook, and Moody's is now at a Baa3.

Alexander Blanton - Ingalls Snyder

Okay. So the S&P is slightly below the Moody's?

Brian D. Jellison - Chairman, President and Chief Executive Officer

No, those are a 12 hour ratings.

John Humprey - Vice President and Chief Financial Officer

Those are equivalent rating.

Brian D. Jellison - Chairman, President and Chief Executive Officer

BBB minus is the same as a.

Alexander Blanton - Ingalls Snyder

Got you, they're both investment graded?

John Humprey - Vice President and Chief Financial Officer

Absolutely, yes.

Alexander Blanton - Ingalls Snyder

Okay.

John Humprey - Vice President and Chief Financial Officer

They're both investment grades.

Alexander Blanton - Ingalls Snyder

I'm not a born person, so just wanted to clarify that.

John Humprey - Vice President and Chief Financial Officer

They're both the first step into investment grade.

Alexander Blanton - Ingalls Snyder

Got you, okay. So Moody's went up to, okay.

John Humprey - Vice President and Chief Financial Officer

Yes.

Alexander Blanton - Ingalls Snyder

You have announced the third quarter debt extinguishment charge I think it's $0.02.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Correct.

Alexander Blanton - Ingalls Snyder

Well, that's not in your guidance.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Not it's not in our guidance. We view that as a non-cash administrative matter. And whenever we've had dead extinguishment costs in the past we've excluded it from our.

Alexander Blanton - Ingalls Snyder

Okay. So do you know if the analysts will include it or not, because otherwise it gets confusing.

John Humprey - Vice President and Chief Financial Officer

I have no idea what they're going to do, but if our history has been and pretty much anybody I have ever seen and in debt extinguishment non-cash charges it's not included, it's just an extraordinary item.

Alexander Blanton - Ingalls Snyder

Let's hope not otherwise, we're going to have non-comparable numbers out there. Finally, the Mid-east project, you indicated that there was a 4% delta between including and not including in the sales, which works out to be about $20 million for the quarter.

John Humprey - Vice President and Chief Financial Officer

That was actually a 2% delta, which would be half of the number you just mentioned about.

Alexander Blanton - Ingalls Snyder

I thought you said that was up 12% versus up 8%.

Brian D. Jellison - Chairman, President and Chief Executive Officer

On a reported basis our total sales were up 12%, but we also have acquisition benefit. So on an internal basis, sales were up 6. If you adjust for the impact of the Middle East tolling project, internal sales up 8. So the impact on the total company was 2 points.

Alexander Blanton - Ingalls Snyder

Okay. 2%?

Brian D. Jellison - Chairman, President and Chief Executive Officer

2% on the growth side, yeah.

Alexander Blanton - Ingalls Snyder

That's 10 million for the quarter.

Brian D. Jellison - Chairman, President and Chief Executive Officer

It was about a $10 million delta year-over-year.

Alexander Blanton - Ingalls Snyder

Okay. So if I annualize that as $40 million, but I don't know if I can annualize it, because I don't if it was there the entire quarter, or just first up.

Brian D. Jellison - Chairman, President and Chief Executive Officer

No. You can't really annualize that number. It was kind of flat year-over-year in the first quarter.

Alexander Blanton - Ingalls Snyder

Yes.

Brian D. Jellison - Chairman, President and Chief Executive Officer

And then it will be an impact in the third quarter as well.

Alexander Blanton - Ingalls Snyder

There will be an additional impact?

Brian D. Jellison - Chairman, President and Chief Executive Officer

A similar impact in the third quarter and moving into the fourth, it is not a full quarter impacting the fourth.

Alexander Blanton - Ingalls Snyder

Okay. Thank you.

Brian D. Jellison - Chairman, President and Chief Executive Officer

You're welcome.

Operator

We go next to Matt Somerville with KeyBanc.

Matthew Somerville - KeyBanc

Two questions. First back to imaging, Brian, what kind of average duration are you seeing in terms of these delays and I guess, right now would you say you have a little bit better visibility into the business and then just can you talk about how the performance of a medical pieces within scientific and industrial imaging segment have been performing and what the outlook is there?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Yeah, Matt, let's do just medical first, medical continues to do well. They have a big trade show coming up here. They are going to be launching a bunch of interesting oncology support materials. That business is still growing nicely it has above Roper EBITDA performance, low asset base. They did have some difficulty in the quarter, because we have two facilities, one in Colona and one in Orange City, Iowa.

The flood did affect them, didn't do any damage to the facility, but it affected people who had to deal with issues around Cedar Rapids and what have you. That will immediately write itself here in the third quarter. We weren't going to use the Iowa flood for an excuse for any of the certain margin deterioration we had. We still very much like that business. It's doing well internationally.

We still think it ought to be a double-digit grower. We're talking about something in the neighborhood of $100 million of revenue in that business, so the reason we're so disappointed with imaging is when you have one of the most attractive business elements inside your segment and you still have deteriorating performance, it makes it frankly much more unacceptable.

As far as the visibility, what's really happened to some very well intended people is they took a couple of their OEMs at their word and the OEMs got involved in situations that they didn't foresee. One of our customers, a publicly trading company laid off 60 people in the second quarter and it is very well known what kind of problems they're going through. One of the competitors I see that one of them has, I just got a copy out UK that somebody might be buying them.

So I think there is a lot of activity in the space. I think that the margins would not have deteriorated if they hadn't spent as much money ahead as they did and Gatan moved out of it's facility to get completely integrated in another facility in Pleasanton. That drove up their costs. They did an unacceptable job in budgeting, and I think John and I felt that commitments were made to us weren't lived up to and that's why we took people actions there recently.

I think as far as visibility, we're not worried about imaging having further deterioration. I think it will be flat in the next quarter. Hopefully it starts to get a little bit better, but it is a short-term drag on our performance and as somebody else said it's we're going to take a hard look at what we're going to do with that business. We're either going to reconsolidate that business or think about somebody else do it.

Matthew Somerville - KeyBanc

Okay. And then the other question is just around the Energy Systems and Controls segment. If I break the segment into buckets, you have instruments, control systems, the protective technologies and the Z-Tech power business. Can you talk about fundamentally what you're seeing kind of across those four buckets?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Well, frankly they're all doing really well. The Protective Technology business in terms of variable on effusion of revenue is leading the path. The sensor business is doing really well, up quite a bit in the quarter. So those two were at the high end, let's say favorable results and detracting compression, controls were sort of similarly up, detect a little smaller business and for us it's also actually out performed a bit more.

The business that lagged in the quarter on a relative basis still up was our Petroleum Analyzer business, which had soft North American activity compared to what we would expect. And they're projecting a really, really strong second half of the year. So we see favorable comps in energy in Q3 and Q4.

Matthew Somerville - KeyBanc

The comment you made on M&A pipeline being relatively full, the transactions you're looking at, Brian, are they more along the lines of the smaller deals you closed on here very recently or are those things in the pipeline of historical size similar to the Neptune's and TransCores?

Brian D. Jellison - Chairman, President and Chief Executive Officer

I would say the short answer to that is yes. But we look at over $5 billion a year in transactions. Now so far this year we've actually invested some real money. We don't think we're done this year, and some of those could be smaller, and some could be larger. I think what's really a little different, when we bought Neptune that was a very big deal because we had to spend over four times our trailing EBITDA to acquire Neptune. We issued equity and we issued a convertible secured.

When we acquired TransCore, we still spend over 3.5 times our trailing EBITDA. At that time, we had to get the company debt rated. We had to establish all the relationships. We didn't have anything here prior to 2003. We put in place I think a world-class corporate team. And now it's really a sophisticated and straight forward standard company. It's an investment grade company, and that company is going to remain investment grade. To do that, it's not going to get a balance sheet debt to EBITDA situation like it had, that had to invest in to become a great company.

So I think you're going to see us running at this kind of two and a half times debt-to-EBITDA, and you can put a pencil to that, and you can see what kind of capacity we have going forward. So we have a lot of opportunity, but we're not going to have taken four years to get this company into the status that it is squander that by making a big deal that doesn't fit our investment grade metrics.

Now, we got a lot of opportunity foe that, and we also have some tangible assets. We may have been talking about one this morning. And if we cashed out some of our assets that were less happy with, we would have more powder to do a larger transaction. So I think I will stop there.

Matthew Somerville - KeyBanc

Thanks a lot, Brian.

Brian D. Jellison - Chairman, President and Chief Executive Officer

You're welcome, Matt.

Operator

We go next to Deane Dray with Goldman Sachs.

Deane Dray - Goldman Sachs

Thank you. Good morning.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Morning.

Deane Dray - Goldman Sachs

Couple points first just to clarify there was a question earlier about whether debt extinguishment is treated as one-time and typically it is treated as one time, so you're right on that, Brian, and, John, we appreciate that inclusion of core revenue growth in the release, so in fact we had to double check to make sure that really was a Roper release we were looking at because that was a new iron for us, I appreciate it.

John Humprey - Vice President and Chief Financial Officer

Always trying to be transparent.

Deane Dray - Goldman Sachs

Terrific. Now if we could, I would love to get more detail around this manufacturing issue at Neptune. Just from your description it begs a lot of questions here to the extent you can, just take us through. What is this component? Why, is it not covered under warranty? Is it going to be litigation, a big recall or is this very contained at this stage? So if we start there.

Brian D. Jellison - Chairman, President and Chief Executive Officer

It's very contained at this stage. It won't be a big recall. The provider of this is a very large company with very deep pockets, and very deep personal reserves. It's quite clear to us that they are completely responsible for this. And it is exceptionally fortunate for them and everybody involved that we were able to catch this, because it's a component that would go into a significant number of our automatic meter reading devices.

And the situation, it is a very in-expensive component. So we do some other business with this company, which gets to be larger in detail. But the problem is already known, it's already resolved. So it isn't getting worse, as we speak. So it's a finite thing involving a relatively small number of in-stock and installed devices. The bad news is that, you can't just pluck out the component. These things aren't that expensive in total.

So we've got quite a bit of labor, and we talked about it here. It's actually because we learned about it in the last week in June, and people were continuously through the 4th of July to make sure that we understood exactly what it was and what the remedies were. We felt obligated to do book this. But I think the amount of money we booked is clearly adequate. Our responsibility for this we think gets transferred ultimately to the provider. They need to fess up and handle this as a warranty item for themselves in addition to a whole lot of other costs that we're providing.

So it's not a product recall. It's something that can be fixed in the field, but unfortunately you don't get to walk into a plant. You have to go into the guy's yards, you got to open up his meter pit, got to make a change and the labor will be expensive, but parts are negligible.

Deane Dray - Goldman Sachs

And just to clarify if you could, is this an electrical component, or mechanical component?

Brian D. Jellison - Chairman, President and Chief Executive Officer

It's an electrical component, and we would like to tell you what it was. We initially had that, decided I guess, we shouldn't do it because it wouldn't be that hard to figure out who the person was, the vendors ask to us work with them, so we're going to work with them. But they should do the right thing.

Deane Dray - Goldman Sachs

It is your sense that charge as it stands today will adequately cover.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Absolutely. We've been through that. We took TW through when we booked it. Yes. We're very comfortable that that charge reflects the right methodology.

Deane Dray - Goldman Sachs

And it's just your sense that this should be treated as a one-time item? Why is it not part of your manufacturing challenges and on a regular basis?

Brian D. Jellison - Chairman, President and Chief Executive Officer

The way we treat it is a reduction in cost of goods sold. We'll probably put it through the warranty reserve, but we don't think in fact, it validates kind of our reserved methodology, because we caught it so early, it's just a weird thing it is going to cost all this labor.

I think each person has got it, we're not asking people to, but we believe it is a one-time item. But we didn't say we earned $0.83. We said we earned $0.80. So if people want to give us credit for that as a one-time item, we thank them very much for that but our guidance assumes when people don't give us credit.

Deane Dray - Goldman Sachs

I understand. Thank you.

Brian D. Jellison - Chairman, President and Chief Executive Officer

You're welcome. Okay. Rufus, we have time for one more question.

Operator

And that question comes from Shannon O'Callaghan with Lehman Brothers.

Shannon O'Callaghan - Lehman Brothers

Good morning, guys.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Good morning, Shannon.

Shannon O'Callaghan - Lehman Brothers

Yes, just a couple things. One more follow-up on imaging, just in terms of the actions you're taking and how you're thinking about it in the future? I mean it sounded like a lot of what was deemed up acceptable was kind of controller ship issues you made some of these people changes in the business. What else is there that makes you question whether you really want to this be a Roper business?

Brian D. Jellison - Chairman, President and Chief Executive Officer

Well, it has been a frustrating business for us for several years, because we're getting up to the point where like half of our revenue is recurring revenue or subscription services and things like that, and the trouble with the camera businesses is it's always a new sale. It is always an application design. And it is always something the guy can buy a little bit later.

Frequently its government funded, and you're looking for the Japanese government to spend money on research or you're looking for the US government. We get worn out with the excuses that we get from the camera people. They actually are always correct, okay? But investors don't reward us, because we can articulate what went wrong. They reward us for anticipating what can go wrong and taking action in advance.

We've been too patient, too long with the camera businesses, and actually it's a good thing what happened this quarter, because we are no longer going to tolerate the kind of stuff that we have to live with. It's not going to happen in 2009 or ever again. And I think that everybody involved in those processes knows and understand exactly what we're saying.

Shannon O'Callaghan - Lehman Brothers

Okay, great. That helps. And a couple of things on the margins, you mentioned these industrial margins extra charge. Those are pretty wild with kind of contribution margins you put up there. I mean even though industrial has been tracking with very strong contribution margins as it is, that looks like a bit of an outlier. Was there anything unusual there in the quarter?

Brian D. Jellison - Chairman, President and Chief Executive Officer

We had phenomenal shipments out of Neptune, all time record. So you got really good… I hate to use the term absorption. There has been a terrific, but everybody is doing well. We had one small business in there that's struggling. Our punt businesses are doing phenomenally well. Right at the moment this is the time you would say, wow, I really love our industrial business, what do I have to talk about all of this other stuff for, because we would be up double-digits organically.

We have everything in the world looks wonderful, so everybody is doing great. We came off a two-day quarterly review session with them last Wednesday or Thursday and in Atlanta, and when we walked out I was saying to the guys, well, this feels more like a strategic review than a quarterly review. I can't explain about anything. We did find things, what I mean is they are really just knocking the ball out of the ballpark.

Shannon O'Callaghan - Lehman Brothers

Okay, great. I leave it at that. Thanks, guys.

Brian D. Jellison - Chairman, President and Chief Executive Officer

Thanks.

Operator

And that will end our question-and-answer session for the call. We now return to John Humphrey for any closing remarks.

John Humprey - Vice President and Chief Financial Officer

Okay. Well, I guess my closing remarks are to thank everyone for joining us this morning. And as always, we look forward to talking to you again in three months.

Operator

And ladies and gentlemen, this does conclude the Roper second quarter 2008 financial results conference call. We do appreciate your participation and you may disconnect at this time.

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Source: Roper Industries, Inc. Q2 2008 Earnings Call Transcript
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