Roper Industries Announces Record Second Quarter Results

Diluted Earnings Per Share of $1.56

Strong Organic Revenue Growth and Margin Performance

28 Jul, 2014, 07:00 ET from Roper Industries, Inc.

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.



RELATED LINKS

http://www.roperind.com