Roper Industries Announces Record Results for Fourth Quarter and Full Year 2012

SARASOTA, Fla., Jan. 28, 2013 /PRNewswire/ -- Roper Industries, Inc. (NYSE: ROP), a diversified growth company, reported financial results for the fourth quarter and full year ended December 31, 2012.

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. 

Fourth Quarter 2012

Fourth quarter GAAP diluted earnings per share were $1.44 and non-GAAP diluted earnings per share were $1.48.  GAAP revenue increased 10% to $810 million and non-GAAP revenue, which excludes a fair value adjustment to acquired deferred revenue, was $816 million.  GAAP operating margin increased 250 basis points to 27.8%, while non-GAAP operating margin was 28.3%, a 300 basis point increase over the prior year.  Operating cash flow in the quarter was $212 million

"Our businesses performed exceptionally well in the fourth quarter, as we established records for revenue, orders, gross margin, operating profit, net earnings and cash flow," said Brian Jellison, Roper's Chairman, President and CEO.  "EBITDA reached $275 million, or 33.7% of revenue, reflecting the contribution of Sunquest and strong operating leverage on organic growth."

Full Year 2012

"Full year performance across the enterprise was outstanding throughout the year with record levels of revenue, income and cash flow," said Mr. Jellison.  "Operating margin expansion was consistent and broad-based, as margins expanded in each of our segments in every quarter of 2012, a reflection of the strength of our business leaders and our disciplined operating model.  Gross margin expanded to 56% for the year.  Our consistent focus on high margin businesses, differentiated technology and nimble execution continues to deliver exceptional results." 

GAAP diluted earnings per share for the year were $4.86 and non-GAAP diluted earnings per share were $4.96.  GAAP revenue was $3.0 billion, up 7% over the prior year.  GAAP operating margin increased 170 basis points to 25.3%, while non-GAAP operating margin was 25.7%, a 210 basis point increase over the prior year.  Operating cash flow was a record $678 million.  Free cash flow increased 14% to $639 million and represented 21% of GAAP revenue. 

"We invested over $1.4 billion in acquisitions during 2012, adding Sunquest as a new growth platform, as well as attractive bolt-on businesses to our existing platforms," said Mr. Jellison.  "We successfully issued $900 million in senior notes during the fourth quarter and ended the year with a strong balance sheet, including over $1.5 billion in cash and available liquidity.  We continue to have an attractive pipeline of opportunities and are well positioned as we enter 2013."

2013 Outlook and Guidance

Roper expects 2013 full year non-GAAP diluted earnings per share (DEPS) between $5.60 - $5.82 with expected first quarter non-GAAP DEPS between $1.19 and $1.23

The company's guidance is provided on a non-GAAP basis, which excludes the fair value adjustment to acquired deferred revenue resulting from the Sunquest acquisition.  The company's guidance excludes future acquisitions.

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.  The 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:  Q4 Revenue Growth Detail


Q4 2011

Q4 2012

V%

GAAP Revenue

$739

$810

10%

Non-GAAP Revenue

$739

$816

10%





Components of growth – GAAP




     Organic Growth



3%

     Acquisitions



7%

     Foreign Exchange



(0%)

     Total Growth



10%





Table 2:  Free Cash Flow Reconciliation


2011

2012

V%

GAAP Revenue (B)

$2,797

$2,993

7%

Non-GAAP Revenue (C)

$2,797

$3,003

7%





Operating Cash Flow

602

678


Less: Capital Expenditures

(41)

(38)


Rounding

-

(1)


Free Cash Flow (A)

561

639

14%





% of GAAP Revenue (A) / (B)

20.0%

21.4%


% of Non-GAAP Revenue (A) / (C)

20.0%

21.3%


Table 3:  EBITDA Reconciliation


Q4 2012

GAAP Revenue

$809.9

Non-GAAP Revenue (B)

$815.9



GAAP Net Earnings

143.5

Add:  Interest Expense

20.5

Add:  Income Taxes

61.3

Add:  Depreciation & Amortization

44.0

Add:  Fair Value Adjustment to Acquired Deferred Revenue

6.0

EBITDA (A)

$275.3





% of Non-GAAP Revenue (A) / (B)

33.7%

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, January 28, 2013.  The call can be accessed via webcast or by dialing +1 888-438-5524 (US/Canada) or +1 719-457-2645, using confirmation code 6945605.  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 6945605.

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 water, energy, transportation, medical, education, and SaaS-based information networks. 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, profit and cash flow 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 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)













December 31,


December 31,

ASSETS

2012


2011





CURRENT ASSETS:




  Cash and cash equivalents

$        370,590


$       338,101

  Accounts receivable

526,408


439,134

  Inventories 

190,867


204,758

  Unbilled receivable

72,193


63,829

  Deferred taxes

45,788


38,004

  Other current assets

43,492


31,647

    Total current assets

1,249,338


1,115,473





PROPERTY, PLANT AND EQUIPMENT, NET

110,397


108,775





OTHER ASSETS:




  Goodwill

3,868,857


2,866,426

  Other intangible assets, net

1,698,867


1,094,142

  Deferred taxes

74,848


63,006

  Other assets

68,797


71,595

    Total other assets

5,711,369


4,095,169





TOTAL ASSETS

$     7,071,104


$    5,319,417









LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




  Accounts payable

$        138,340


$       141,943

  Accrued liabilities

424,987


322,904

  Income taxes payable

-


8,895

  Deferred taxes

3,868


10,548

  Current portion of long-term debt

513,928


69,906

    Total current liabilities

1,081,123


554,196





NONCURRENT LIABILITIES:




  Long-term debt

1,508,194


1,015,110

  Deferred taxes

707,278


482,603

  Other liabilities

86,783


72,412

    Total liabilities

3,383,378


2,124,321





STOCKHOLDERS' EQUITY:




  Common stock

1,006


987

  Additional paid-in capital

1,158,001


1,117,093

  Retained earnings

2,489,858


2,063,110

  Accumulated other comprehensive earnings

58,537


33,800

  Treasury stock

(19,676)


(19,894)

    Total stockholders' equity

3,687,726


3,195,096





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$     7,071,104


$    5,319,417





Roper Industries, Inc. and Subsidiaries







Condensed Consolidated Statements of Earnings (unaudited)





(Amounts in thousands, except per share data)



























Three months ended


Twelve months ended



December 31,


December 31,



2012

2011


2012


2011










Net sales


$  809,910


$  739,204


$2,993,489


$2,797,089

Cost of sales


343,549


333,355


1,321,772


1,281,525










Gross profit


466,361


405,849


1,671,717


1,515,564










Selling, general and administrative expenses


241,119


218,495


914,130


855,025










Income from operations


225,242


187,354


757,587


660,539










Interest expense


20,509


15,383


67,525


63,648

Loss on extinguishment of debt


-


-


(1,043)


-

Other income/(expense)


106


(548)


(2,338)


8,096










Earnings from continuing operations before









   income taxes


204,839


171,423


686,681


604,987










Income taxes


61,309


49,747


203,321


177,740










Net Earnings


$  143,530


$  121,676


$   483,360


$   427,247














































Earnings per share:









  Basic


$       1.46


$       1.26


$        4.95


$        4.45

  Diluted


$       1.44


$       1.23


$        4.86


$        4.34










Weighted average common and common









  equivalent shares outstanding:









    Basic


98,422


96,455


97,702


95,959

    Diluted


99,576


98,662


99,558


98,386










Roper Industries, Inc. and Subsidiaries
















Selected Segment Financial Data (unaudited)















(Amounts in thousands and percents of net sales)





















































Three months ended December 31,


Twelve months ended December 31,



2012


2011


2012


2011



Amount


%


Amount


%


Amount


%


Amount


%

Net sales:

















  Industrial Technology


$   197,152




$  198,661




$   795,240




$   737,356



  Energy Systems & Controls


184,608




172,034




646,116




597,802



  Medical & Scientific Imaging


217,628




157,782




703,835




610,617



  RF Technology


210,522




210,727




848,298




851,314



    Total


$   809,910




$  739,204




$2,993,489




$2,797,089





































Gross profit:

















  Industrial Technology(1)


$   106,178


53.9%


$    97,947


49.3%


$   410,180


51.6%


$   366,967


49.8%

  Energy Systems & Controls


109,291


59.2%


99,356


57.8%


363,616


56.3%


331,746


55.5%

  Medical & Scientific Imaging(2)


139,084


63.9%


100,947


64.0%


453,495


64.4%


386,242


63.3%

  RF Technology


111,808


53.1%


107,599


51.1%


444,426


52.4%


430,609


50.6%

    Total


$   466,361


57.6%


$  405,849


54.9%


$1,671,717


55.8%


$1,515,564


54.2%



































Operating profit*:

















  Industrial Technology(1)


$     64,480


32.7%


$    58,032


29.2%


$   244,691


30.8%


$   208,188


28.2%

  Energy Systems & Controls


61,075


33.1%


52,537


30.5%


179,824


27.8%


157,960


26.4%

  Medical & Scientific Imaging(2)


62,015


28.5%


39,377


25.0%


187,246


26.6%


148,376


24.3%

  RF Technology


56,819


27.0%


52,464


24.9%


223,335


26.3%


202,877


23.8%

    Total


$   244,389


30.2%


$  202,410


27.4%


$   835,096


27.9%


$   717,401


25.6%



































Net Orders:

















  Industrial Technology


$   185,285




$  184,051




$   783,362




$   767,020



  Energy Systems & Controls


175,596




171,905




634,051




608,538



  Medical & Scientific Imaging


208,784




153,335




703,034




612,787



  RF Technology


209,399




185,390




871,225




834,903



    Total


$   779,064




$  694,681




$2,991,672




$2,823,248






















































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









       were $19,147 and $15,056 for the three months ended December 31, 2012 and 2011, respectively, and









        $77,509 and $56,862 for the twelve months ended December 31, 2012 and 2011, respectively.




























(1)  Includes a favorable fourth quarter 2012 accounts payable correction of $5.5 million.




























(2)  Includes a fourth quarter 2012 charge for inventory and tooling for a medical product line of $4.0 million.











































Roper Industries, Inc. and Subsidiaries




Condensed Consolidated Statements of Cash Flows (unaudited)

(Amounts in thousands)

















Twelve months ended



December 31,



2012

2011







Net earnings


$    483,360


$    427,247

Non-cash items:





Depreciation


37,888


36,780

Amortization


116,860


103,363

Stock-based compensation expense


40,773


31,730

Income taxes


(15,988)


14,526

Changes in assets and liabilities:





Receivables


(21,577)


(21,574)

Inventory


18,361


(23,033)

Accounts payable


(8,480)


1,903

Accrued liabilities


17,689


22,444

Other, net


8,966


8,232

  Cash provided by operating activities


677,852


601,618






Business acquisitions, net of cash acquired


(1,467,772)


(233,594)

Capital expenditures


(38,405)


(40,702)

Other, net


632


(1,453)

  Cash used by investing activities


(1,505,545)


(275,749)






Principal debt borrowings


900,000


-

Principal debt payments


(57,304)


(26,457)

Revolver borrowings (payments), net


100,000


(230,000)

Debt issuance costs


(12,213)


-

Dividends


(69,903)


(42,090)

Excess tax benefit from share-based payment


30,747


12,664

Proceeds from stock-based compensation, net


37,679


28,167

Redemption premium on convertible debt


(76,641)


-

Other, net


1,505


1,037

  Cash provided by (used in) financing activities


853,870


(256,679)






Effect of exchange rate changes on cash


6,312


(1,483)






Net increase in cash and equivalents


32,489


67,707

Cash and equivalents, beginning of period


338,101


270,394






Cash and equivalents, end of period


$370,590


$338,101






 

ROPER INDUSTRIES INC.







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



(Amounts in thousands, except per share data)



















Adjustment





2012


Fair Value Adjustment


2012




4th Quarter


to Acquired


4th Quarter




GAAP


Deferred Revenue


Non-GAAP


Net Sales


$809,910


$5,952


$815,862


Cost of Sales


343,549


-


343,549


Gross Profit


466,361


5,952


472,313


Selling, general and administrative expenses


221,972


-


221,972


Segment income from operations


244,389


5,952


250,341


Corporate general and administrative expenses


19,147


-


19,147


Income from operations


225,242


5,952


231,194


Interest Expense


20,509


-


20,509


Other income (expense)


106


-


106


Earnings from continuing operations before income taxes

204,839


5,952


210,791


IncomeTaxes (1)


61,309


2,083


63,392


Tax Rate


29.9%


35.0%


30.1%










Net Earnings


$143,530


$3,869


$147,398










Weighted average common shares outstanding


99,576




99,576










Diluted earnings per share


$ 1.44




$ 1.48


















(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

 

 

 

ROPER INDUSTRIES INC.












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







(Amounts in thousands, except per share data)

















Adjustments






2012


Fair Value Adjustment


Sunquest


Debt


2012





Fully Year


to Acquired


Acquisition-Related


Extinguishment


Fully Year





Reported


Deferred Revenue


Expenses


Charge


Adjusted


Net Sales



$2,993,489


$9,082


-


-


$3,002,571


Cost of Sales



1,321,772


-


-


-


1,321,772


Gross Profit



1,671,717


9,082


-


-


1,680,799


Selling, general and administrative expenses



836,621


-


-


-


836,621


Segment income from operations



835,096


9,082


-


-


844,178


Corporate general and administrative expenses



77,509


-


(6,308)


-


71,201


Income from operations



757,587


9,082


6,308


-


772,977


Interest Expense



67,525


-


-


-


67,525


Other income (expense)



(3,381)


-


-


1,043


(2,338)


Earnings from continuing operations before income taxes


686,681


9,082


6,308


1,043


703,114


Income Taxes (1)



203,321


3,179


2,208


365


209,073


  Tax Rate



29.6%


35.0%


35.0%


35.0%


29.7%















Net Earnings



$483,360


$5,903


$4,100


$678


$494,041















Weighted average common shares outstanding



99,558








99,558















Diluted earnings per share



$                    4.86








$            4.96














(1) For the three adjustments, the company used a 35% tax rate, as these adjustments are all US-based items, and 35% is the statutory tax rate in the United States



 


 

SOURCE Roper Industries, Inc.



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