Roper Industries Announces Record Second Quarter Results Diluted Earnings Per Share of $1.56

Strong Organic Revenue Growth and Margin Performance

SARASOTA, Fla., July 28, 2014 /PRNewswire/ -- Roper Industries, Inc. (NYSE: ROP), a diversified technology company, reported financial results for the second quarter ended June 30, 2014.

Roper reports results, including revenue, operating profit, net income and diluted earnings per share, on a GAAP and adjusted basis.  Adjusted measures are reconciled to the corresponding GAAP measures at the end of this release. 

Second quarter diluted earnings per share (DEPS) were $1.56, a 41% increase over last year's GAAP DEPS and a 19% increase over last year's adjusted DEPS.  Net earnings for the second quarter were $157 million.  Second quarter revenue was $885 million, a 13% increase over last year's GAAP revenue and 10% higher than last year's adjusted revenue.  Operating profit was $247 million and represented 27.9% of revenue.  Orders increased 5% to $874 million

Operating cash flow in the quarter was $141 million. Year-to-date operating cash flow was $353 million, an increase of 14% over the prior year and represented 21% of revenue. Year-to-date free cash flow was $333 million, a 15% increase over the prior year.

"Our businesses performed exceptionally well in the quarter, with record second quarter performance for orders, revenue, operating profit and EBITDA," said Brian Jellison, Roper's Chairman, President and CEO.  "We generated 8% organic growth in the quarter and all segments grew organically, led by double-digit growth in both our Medical and RF segments.  Our continued growth in high margin businesses resulted in exceptional margin performance, as gross margin reached 59.1% and EBITDA margin was 33.3%."

On July 2nd, Roper completed a small acquisition, FoodLink®, a provider of traceability and commerce solutions to the fresh food industry.  This acquisition expands and builds upon Roper's leading position providing collaborative trading and web solutions to the food industry.

2014 Guidance Update

As a result of its second quarter performance, Roper is increasing its full year diluted earnings per share guidance from $6.22 - $6.36 to $6.27 - $6.37.  Third quarter diluted earnings per share is expected to be $1.49 - $1.53. The company's guidance excludes the impact of 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: Q2 Revenue Growth Detail








Revenue


         V%

Q2 2014 GAAP Revenue

$885







Q2 2013 GAAP Revenue

$784


13%

Purchase Accounting Adjustment for Acquired Revenue (MHA and Sunquest)

21



Q2 2013 Adjusted Revenue

$805


10%









Components of Adjusted Revenue Growth




     Organic



8%

     Acquisitions



2%

     Foreign Exchange



--%

     Total Growth



10%





Table 2: Free Cash Flow Reconciliation












Q1 2014


Q2 2014


YTD 2014


YTD 2013


YTD V%

Operating Cash Flow

$212.6


$140.5


$353.1


$311.0


14%

Less:  Capital Expenditures

(10.5)


(10.1)


(20.6)


(21.9)



Rounding

0.1


---


0.1


---



Free Cash Flow

$202.2


$130.4


$332.6


$289.1


15%

 

Table 3: EBITDA Reconciliation



Q2 2014

Revenue (A)

$885



Net Earnings

$157

Add: Interest Expense

$20

Add: Income Taxes

$69

Add: Depreciation

$10

Add: Amortization

$38

Rounding

$1

EBITDA (B)

$295



% of Revenue (B) / (A)

33.3%

 

Table 4: Reconciliation of Q2 2013 GAAP DEPS to Adjusted DEPS






Diluted

Earnings

Per Share


V%

Q2 2014 GAAP DEPS

$1.56







Q2 2013 GAAP DEPS

$1.11


41%

Add:  Purchase Accounting Adjustment for

Acquired Revenue (Sunquest, MHA)

$0.14



Add:  Special Charge for Vendor-Supplied

Component Quality Issue

$0.06



Q2 2013 Adjusted DEPS

$1.31


19%









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, July 28, 2014.  The call can be accessed via webcast or by dialing +1 888-539-3612 (US/Canada) or +1 719-325-2454, using confirmation code 5365091.  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 5365091.

About Roper Industries

Roper Industries is a diversified technology 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, 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)













June 30,


December 31,

ASSETS

2014


2013





CURRENT ASSETS:




  Cash and cash equivalents

$      565,282


$         459,720

  Accounts receivable

518,378


519,075

  Inventories 

212,050


204,923

  Unbilled receivable

106,788


86,945

  Deferred taxes

63,804


64,464

  Other current assets

58,223


38,210

    Total current assets

1,524,525


1,373,337





PROPERTY, PLANT AND EQUIPMENT, NET

116,394


117,310





OTHER ASSETS:




  Goodwill

4,551,535


4,549,998

  Other intangible assets, net

1,966,143


2,039,136

  Deferred taxes

25,639


28,773

  Other assets

77,910


76,427

    Total other assets

6,621,227


6,694,334





TOTAL ASSETS

$   8,262,146


$      8,184,981









LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




  Accounts payable

$      147,661


$         150,313

  Accrued compensation

97,847


107,953

  Deferred revenue

216,106


209,332

  Other accrued liabilities

154,910


153,712

  Income taxes payable

-


4,275

  Deferred taxes

7,764


6,490

  Current portion of long-term debt

10,984


11,016

    Total current liabilities

635,272


643,091





NONCURRENT LIABILITIES:




  Long-term debt

2,233,809


2,453,836

  Deferred taxes

755,842


783,805

  Other liabilities

89,208


91,199

    Total liabilities

3,714,131


3,971,931





STOCKHOLDERS' EQUITY:




  Common stock

1,020


1,013

  Additional paid-in capital

1,292,466


1,229,233

  Retained earnings

3,223,818


2,959,196

  Accumulated other comprehensive earnings

50,075


43,083

  Treasury stock

(19,364)


(19,475)

    Total stockholders' equity

4,548,015


4,213,050





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$   8,262,146


$      8,184,981





 

Roper Industries, Inc. and Subsidiaries








Condensed Consolidated Statements of Earnings (unaudited)





(Amounts in thousands, except per share data)





























Three months ended


Six months ended



June 30,


June 30,



2014


2013


2014


2013










Net sales


$885,175


$784,010


$1,719,227


$1,521,145

Cost of sales


361,993


338,503


707,109


654,062










Gross profit


523,182


445,507


1,012,118


867,083










Selling, general and administrative expenses


276,516


265,761


542,052


502,160










Income from operations


246,666


179,746


470,066


364,923










Interest expense


19,512


22,361


39,339


43,219

Other income/(expense)


(930)


2,536


490


44










Earnings from continuing operations before









   income taxes


226,224


159,921


431,217


321,748










Income taxes


68,863


48,568


126,630


85,481










Net Earnings


$157,361


$111,353


$   304,587


$   236,267














































Earnings per share:









  Basic


$     1.58


$     1.12


$        3.05


$        2.39

  Diluted


$     1.56


$     1.11


$        3.02


$        2.36










Weighted average common and common









  equivalent shares outstanding:









    Basic


99,881


99,089


99,720


98,983

    Diluted


100,823


100,162


100,696


100,071










 

 

Roper Industries, Inc. and Subsidiaries
















Selected Segment Financial Data (unaudited)















(Amounts in thousands and percents of net sales)





















































Three months ended June 30,


Six months ended June 30,



2014


2013


2014


2013



Amount


%


Amount


%


Amount


%


Amount


%

Net sales:

















  Industrial Technology


$  204,814




$  197,543




$   401,815




$   379,782



  Energy Systems & Controls


165,868




155,331




321,039




300,973



  Medical & Scientific Imaging


268,891




207,957




525,090




408,401



  RF Technology


245,602




223,179




471,283




431,989



    Total


$  885,175




$  784,010




$1,719,227




$1,521,145





































Gross profit:

















  Industrial Technology


$  103,982


50.8%


$  101,844


51.6%


$   202,452


50.4%


$   195,155


51.4%

  Energy Systems & Controls


95,857


57.8%


87,421


56.3%


181,822


56.6%


168,327


55.9%

  Medical & Scientific Imaging


194,756


72.4%


138,416


66.6%


379,606


72.3%


273,285


66.9%

  RF Technology


128,587


52.4%


117,826


52.8%


248,238


52.7%


230,316


53.3%

    Total


$  523,182


59.1%


$  445,507


56.8%


$1,012,118


58.9%


$   867,083


57.0%



































Operating profit*:

















  Industrial Technology


$    60,438


29.5%


$    50,580


25.6%


$   116,494


29.0%


$   103,525


27.3%

  Energy Systems & Controls


44,786


27.0%


41,634


26.8%


81,811


25.5%


77,356


25.7%

  Medical & Scientific Imaging


94,381


35.1%


47,537


22.9%


184,152


35.1%


107,465


26.3%

  RF Technology


71,272


29.0%


60,729


27.2%


133,832


28.4%


117,359


27.2%

    Total


$  270,877


30.6%


$  200,480


25.6%


$   516,289


30.0%


$   405,705


26.7%



































Net Orders:

















  Industrial Technology


$  200,248




$  204,506




$   405,129




$   384,313



  Energy Systems & Controls


166,041




159,955




316,934




317,492



  Medical & Scientific Imaging


271,800




210,233




528,140




426,353



  RF Technology


235,828




241,817




470,173




481,935



    Total


$  873,917




$  816,511




$1,720,376




$1,610,093






















































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









       were $24,211 and $20,734 for the three months ended June 30, 2014 and 2013, respectively and










       $46,223 and $40,782 for the six months ended June 30, 2014 and 2013, respectively.











 

 

Roper Industries, Inc. and Subsidiaries




Condensed Consolidated Statements of Cash Flows (unaudited)

(Amounts in thousands)

















Six months ended



June 30,



2014


2013






Net earnings


$    304,587


$    236,267

Non-cash items:





Depreciation


20,089


18,742

Amortization


77,495


71,794

Stock-based compensation expense


30,013


26,284

Income taxes


(42,664)


(17,925)

Changes in assets and liabilities:





Receivables


(19,675)


(1,847)

Inventory


(6,515)


(10,362)

Accounts payable


(2,871)


1,012

Accrued liabilities


(4,045)


(10,103)

Other, net


(3,284)


(2,855)

  Cash provided by operating activities


353,130


311,007






Business acquisitions, net of cash acquired


(2,726)


(1,007,513)

Capital expenditures


(20,560)


(21,889)

Other, net


526


1,314

  Cash used by investing activities


(22,760)


(1,028,088)






Principal debt borrowings


-


800,000

Principal debt payments


(561)


(1,671)

Revolver payments, net


(220,000)


(58,000)

Debt issuance costs


-


(7,517)

Dividends


(39,821)


(16,338)

Excess tax benefit from share-based payment


12,058


5,654

Proceeds from stock-based compensation, net


21,686


10,998

Premium on convertible debt conversions


(1,518)


(4,040)

Other, net


1,811


1,826

  Cash provided by/(used by) financing activities


(226,345)


730,912






Effect of exchange rate changes on cash


1,537


(9,850)






Net increase in cash and equivalents


105,562


3,981

Cash and equivalents, beginning of period


459,720


370,590






Cash and equivalents, end of period


$    565,282


$    374,571






 

SOURCE Roper Industries, Inc.



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