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

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.



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