Roper Industries Announces Record First Quarter Results

Net Earnings Increased 15% to $125 Million

Orders Increased 9% to $794 Million

Operating Cash Flow Increased 21% to $171 Million

Apr 29, 2013, 07:00 ET from Roper Industries, Inc.

SARASOTA, Fla., April 29, 2013 /PRNewswire/ -- Roper Industries, Inc. (NYSE: ROP) reported financial results for the first quarter ended March 31, 2013. 

Roper reports results, including revenue, operating margin, net income and diluted earnings per share, on a GAAP and non-GAAP basis.  The company's guidance is provided on a non-GAAP basis.  Non-GAAP measures are reconciled to the corresponding GAAP measures at the end of this release. 

First quarter GAAP diluted earnings per share increased 15% to $1.25 and non-GAAP diluted earnings per share increased 17% to $1.27.  GAAP revenue increased 4% to $737 million and non-GAAP revenue, which excludes a fair value adjustment to acquired deferred revenue, was $741 million.  Orders increased 9% to $794 million and represented a book-to-bill ratio of 1.07.  GAAP operating margin increased 110 basis points to 25.1%, while non-GAAP operating margin was 25.5%, a 150 basis point increase over the prior year.  Operating cash flow in the quarter was $171 million and represented 23% of revenue. 

"We are pleased to deliver record first quarter performance, establishing records for revenue, orders, gross margin, operating profit, net earnings and cash flow," said Brian Jellison, Roper's Chairman, President and CEO.  "Despite a challenging global economic environment, our businesses performed exceptionally well.  Gross margin expanded 240 basis points to 57.4% and free cash flow increased 22% to $160 million.  We secured significant orders for second half delivery, helping increase our backlog to $1.0 billion and supporting our ability to deliver improving organic growth throughout the year."

"We continue to execute our proven strategies, including the disciplined investment of cash," continued Mr. Jellison.  "We expect to complete our acquisition of Managed Health Care Associates, Inc. (MHA) this week.  MHA meets all of our key acquisition criteria and is an excellent addition to our Medical businesses. The company provides the leading network of solutions to the alternate site healthcare market. MHA provides attractive cash return characteristics and generates substantial recurring revenue through long-term customer relationships with very high retention rates.  We expect the acquisition to be immediately cash accretive and to generate $95 million of EBITDA over the first twelve months of ownership, excluding the impact of acquisition-related fair value accounting."

2013 Outlook and Guidance

Roper is increasing its full year non-GAAP diluted earnings per share guidance from $5.60 - $5.82 to $5.76 - $5.94, which reflects a ($0.05) reduction due to currency and includes $0.14 - $0.17 from the acquisition of MHA, Inc.  The company's guidance includes the recognition of MHA revenue, a portion of which will be excluded under GAAP's purchase accounting rules.  The company's guidance excludes the impact of any future acquisitions. 

Conference Call to be Held at 8:30 AM (ET) Today

A conference call to discuss these results has been scheduled for 8:30 AM ET on Monday, April 29, 2013.  The call can be accessed via webcast or by dialing +1 888-455-2296 (US/Canada) or +1 719-457-2648, using confirmation code 1404011.  Webcast information and conference call materials will be made available in the Investors section of Roper's website (www.roperind.com) prior to the start of the call.  Telephonic replays will be available for up to two weeks by calling +1 719-457-0820 and using the access code 1404011.

Use of Non-GAAP Financial Information

The company supplements its consolidated financial statements presented on a GAAP basis with certain non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making.  Reconciliation of non-GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial schedules or tables.  Non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. 

 

Table 1:  Revenue Growth

Q1 2013

Acquisitions / Divestitures

7%

Organic

(3%)

Foreign Currency

-

Total Revenue Growth

4%

 

Table 2:  Gross Margin Reconciliation

Q1 2013

Q1 2012

GAAP Revenue

$737.1

$711.1

Add:  Fair Value Adj. to Acquired Deferred Revenue

3.6

0.0

Non-GAAP Revenue (B)

$740.7

$711.1

GAAP Gross Profit

$421.6

$391.2

Add:  Fair Value Adj. to Acquired Deferred Revenue

3.6

0.0

Non-GAAP Gross Profit (A)

$425.2

$391.2

Non-GAAP Gross Margin (A)/(B)

57.4%

55.0%

 

Table 3:  Free Cash Flow

Q1 2013

Q1 2012

Operating Cash Flow

$171.3

$141.5

Less:  Capital Expenditures

(11.2)

(10.0)

Rounding

0.0

(0.1)

Free Cash Flow

$160.1

$131.4

About Roper Industries

Roper Industries is a diversified growth company and is a constituent of the S&P 500, Fortune 1000, and the Russell 1000 indices. Roper provides engineered products and solutions for global niche markets, including software information networks, medical, water, energy, and transportation. Additional information about Roper is available on the company's website at www.roperind.com.

The information provided in this press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, among others, statements regarding operating results, the success of our internal operating plans, and the prospects for newly acquired businesses to be integrated and contribute to future growth and profit expectations.  Forward-looking statements may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes" or "intends" and similar words and phrases.  These statements reflect management's current beliefs and are not guarantees of future performance.  They involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. Such risks and uncertainties include our ability to integrate our acquisitions and realize expected synergies.  We also face other general risks, including our ability to realize cost savings from our operating initiatives, general economic conditions, unfavorable changes in foreign exchange rates, difficulties associated with exports, risks associated with our international operations, difficulties in making and integrating acquisitions, risks associated with newly acquired businesses, increased product liability and insurance costs, increased warranty exposure, future competition, changes in the supply of, or price for, parts and components, environmental compliance costs and liabilities, risks and cost associated with asbestos related litigation and potential write-offs of our substantial intangible assets, and risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products.  Important risks may be discussed in current and subsequent filings with the SEC.  You should not place undue reliance on any forward-looking statements.  These statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

 

Roper Industries, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

(Amounts in thousands)

March 31,

December 31,

ASSETS

2013

2012

CURRENT ASSETS:

  Cash and cash equivalents

$   430,022

$       370,590

  Accounts receivable

483,861

526,408

  Inventories 

200,023

190,867

  Unbilled receivable

84,948

72,193

  Deferred taxes

47,372

41,992

  Other current assets

38,830

43,492

    Total current assets

1,285,056

1,245,542

PROPERTY, PLANT AND EQUIPMENT, NET

110,637

110,397

OTHER ASSETS:

  Goodwill

3,848,078

3,868,857

  Other intangible assets, net

1,657,893

1,698,867

  Deferred taxes

82,288

78,644

  Other assets

69,038

68,797

    Total other assets

5,657,297

5,715,165

TOTAL ASSETS

$7,052,990

$    7,071,104

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

  Accounts payable

$   138,541

$       138,340

  Accrued compensation

80,043

110,724

  Deferred revenue

190,678

185,912

  Other accrued liabilities

133,403

128,351

  Income taxes payable

15,378

-

  Deferred taxes

8,216

3,868

  Current portion of long-term debt

516,514

519,015

    Total current liabilities

1,082,773

1,086,210

NONCURRENT LIABILITIES:

  Long-term debt

1,403,259

1,503,107

  Deferred taxes

701,567

707,278

  Other liabilities

83,215

86,783

    Total liabilities

3,270,814

3,383,378

STOCKHOLDERS' EQUITY:

  Common stock

1,010

1,006

  Additional paid-in capital

1,182,304

1,158,001

  Retained earnings

2,598,434

2,489,858

  Accumulated other comprehensive earnings

20,048

58,537

  Treasury stock

(19,620)

(19,676)

    Total stockholders' equity

3,782,176

3,687,726

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$7,052,990

$    7,071,104

  

Roper Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings (unaudited)

(Amounts in thousands, except per share data)

Three months ended

March 31,

2013

2012

Net sales

$737,135

$711,066

Cost of sales

315,559

319,873

Gross profit

421,576

391,193

Selling, general and administrative expenses

236,399

220,889

Income from operations

185,177

170,304

Interest expense

20,858

15,483

Other expense

2,492

490

Earnings from continuing operations before

   income taxes

161,827

154,331

Income taxes

36,913

46,022

Net Earnings

$124,914

$108,309

Earnings per share:

  Basic

$     1.26

$     1.12

  Diluted

$     1.25

$     1.09

Weighted average common and common

  equivalent shares outstanding:

    Basic

98,876

97,039

    Diluted

99,986

99,307

  

Roper Industries, Inc. and Subsidiaries

Selected Segment Financial Data (unaudited)

(Amounts in thousands and percents of net sales)

Three months ended March 31,

2013

2012

Amount

%

Amount

%

Net sales:

  Industrial Technology

$182,239

$195,136

  Energy Systems & Controls

145,642

148,602

  Medical & Scientific Imaging

200,444

162,811

  RF Technology

208,810

204,517

    Total

$737,135

$711,066

Gross profit:

  Industrial Technology

$  93,311

51.2%

$  98,663

50.6%

  Energy Systems & Controls

80,906

55.6%

80,408

54.1%

  Medical & Scientific Imaging

134,869

67.3%

106,186

65.2%

  RF Technology

112,490

53.9%

105,936

51.8%

    Total

$421,576

57.2%

$391,193

55.0%

Operating profit*:

  Industrial Technology

$  52,945

29.1%

$  57,507

29.5%

  Energy Systems & Controls

35,722

24.5%

35,657

24.0%

  Medical & Scientific Imaging

59,928

29.9%

43,362

26.6%

  RF Technology

56,630

27.1%

50,353

24.6%

    Total

$205,225

27.8%

$186,879

26.3%

Net Orders:

  Industrial Technology

$179,807

$204,002

  Energy Systems & Controls

157,537

153,376

  Medical & Scientific Imaging

216,121

168,336

  RF Technology

240,118

203,672

    Total

$793,583

$729,386

  *  Operating profit is before unallocated corporate general and administrative expenses.  These expenses 

     were $20,048 and $16,575 for the three months ended March 31, 2013 and 2012, respectively.

  

Roper Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

(Amounts in thousands)

Three months ended

March 31,

2013

2012

Net earnings

$124,914

$108,309

Non-cash items:

Depreciation

9,342

9,449

Amortization

34,099

26,018

Stock-based compensation expense

12,969

9,954

Income taxes

16,348

13,720

Changes in assets and liabilities:

Receivables

14,454

15,968

Inventory

(11,687)

(7,462)

Accounts payable

1,760

(3,774)

Accrued liabilities

(27,262)

(32,162)

Other, net

(3,669)

1,437

  Cash provided by operating activities

171,268

141,457

Business acquisitions, net of cash acquired

(2,240)

(19,007)

Capital expenditures

(11,205)

(10,008)

Other, net

235

219

  Cash used by investing activities

(13,210)

(28,796)

Principal debt payments

(52)

(6,297)

Revolver payments, net

(100,000)

-

Dividends

-

(13,290)

Excess tax benefit from share-based payment

4,364

7,505

Proceeds from stock-based compensation, net

6,229

10,297

Premium on convertible debt conversions

(109)

-

Other, net

764

(489)

  Cash used by financing activities

(88,804)

(2,274)

Effect of exchange rate changes on cash

(9,822)

3,230

Net increase in cash and equivalents

59,432

113,617

Cash and equivalents, beginning of period

370,590

338,101

Cash and equivalents, end of period

$430,022

$451,718

 

 

ROPER INDUSTRIES INC.

CONDENSED CONSOLIDATED STATEMENT OF EARNINGS -  RECONCILIATION OF GAAP TO NON-GAAP

(Amounts in thousands, except per share data)

Adjustment

Fair Value

2013

Adjustment

2013

1st Quarter

to Acquired

1st Quarter

GAAP

Deferred Revenue

Non-GAAP

Net Sales

$    737,135

$                 3,593

$    740,728

Cost of Sales

315,559

-

315,559

Gross Profit

421,576

3,593

425,169

Selling, general and administrative expenses

216,351

-

216,351

Segment income from operations

205,225

3,593

208,818

Corporate general and administrative expenses

20,048

-

20,048

Income from operations

185,177

3,593

188,770

Interest Expense

20,858

-

20,858

Other income (expense)

(2,492)

-

(2,492)

Earnings from continuing operations before income taxes

161,827

3,593

165,420

IncomeTaxes (1)

36,913

1,258

38,171

  Tax Rate

22.8%

35.0%

23.1%

Net Earnings

$    124,914

$                 2,335

$    127,249

Weighted average common shares outstanding

99,986

99,986

Diluted earnings per share

$           1.25

$           1.27

(1) For the adjustment, the company used a 35% tax rate, as this adjustment is a US-based item and 35% is the statutory tax rate in the United States

 

SOURCE Roper Industries, Inc.



RELATED LINKS

http://www.roperind.com