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

28 Jan, 2013, 07:00 ET from Roper Industries, Inc.

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.



RELATED LINKS

http://www.roperind.com