Roper Technologies Announces Second Quarter Results
SARASOTA, Fla., July 25, 2016 /PRNewswire/ -- Roper Technologies, Inc. (NYSE: ROP) reported financial results for the second quarter ended June 30, 2016.
Roper reports results, including revenue, operating margin, net income and diluted earnings per share, on both a GAAP basis and an adjusted basis. Adjusted measures are reconciled to the corresponding GAAP measures in the attached tables.
Second quarter GAAP revenue increased 5% to $932 million and adjusted revenue grew 5% to $934 million. GAAP diluted earnings per share (DEPS) were $1.54 and adjusted DEPS were $1.56. Orders increased 9% in the quarter to $956 million, and backlog was a record $1.14 billion.
GAAP gross margin increased to 60.9% and adjusted gross margin increased 90 basis points to 61.0 %. EBITDA increased 4% to $314 million.
"Continued weakness in oil and gas and some traffic project delays impacted our results, while the balance of our businesses performed well in the quarter," said Brian Jellison, Roper's Chairman, President and CEO. "Strong organic revenue growth in our medical, application software and water businesses coupled with our recent acquisitions resulted in 5% revenue growth in the quarter. Operating cash flow was $170 million in the quarter, bringing year to date adjusted operating cash flow to $414 million with cash conversion of 132%. Orders in the quarter were up 9% to a record $956 million, helping to build our momentum for a stronger second half of 2016."
"Our recent acquisitions performed well in the quarter. With our strong cash performance, ample liquidity and a full pipeline of attractive acquisition opportunities, we expect to invest over $1 billion this year," Mr. Jellison concluded.
2016 Guidance Update
In a somewhat lower global growth environment, and as a result of continued headwinds in energy end markets and delays in toll & traffic projects, Roper expects adjusted DEPS to be in the range of $6.57 - $6.71, with third quarter adjusted DEPS of $1.59 - $1.63. The Company expects revenue in the second half to increase between 7%-9%, including organic growth of 2%-4%. The Company's guidance excludes the impact of any future acquisitions or divestitures.
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: Revenue Growth Detail |
|||
| 2016 |
2015 |
V% |
|
| Q2 GAAP Revenue |
$931.6 |
$889.5 |
4.7% |
| Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
2.5 |
2.5 |
|
| Rounding |
(0.1) |
0.1 |
|
| Q2 Adjusted Revenue |
$934.0 |
$892.1 |
4.7% |
| Components of Adjusted Revenue Growth |
|||
| Acquisitions |
8.1% |
||
| Divestiture |
(0.7%) |
||
| Organic |
(2.4%) |
||
| Foreign Exchange |
(0.3%) |
||
| Total Growth |
4.7% |
| Table 2: Reconciliation of Q2 2016 GAAP DEPS to Adjusted DEPS |
|
| Q2 2016 |
|
| GAAP Diluted Earnings Per Share (DEPS) |
$ 1.54 |
| Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
$ 0.02 |
| Add: Acquisition-Related Inventory Step-up Charge |
$ 0.00 |
| Adjusted DEPS |
$ 1.56 |
| Table 3: Q2 2016 Adjusted Gross Margin Reconciliation |
|||
| 2016 |
2015 |
V% / V Bps |
|
| Q2 GAAP Revenue |
$931.6 |
$889.5 |
|
| Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
2.5 |
2.5 |
|
| Rounding |
(0.1) |
0.1 |
|
| Q2 Adjusted Revenue |
$934.0 |
$892.1 |
|
| Q2 GAAP Gross Profit |
$567.5 |
$533.9 |
|
| Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
2.5 |
2.5 |
|
| Add: Acquisition-Related Inventory Step-up Charge |
0.2 |
-- |
|
| Rounding |
(0.1) |
-- |
|
| Adjusted Gross Profit (B) |
570.1 |
536.4 |
|
| GAAP Gross Margin |
60.9% |
60.0% |
+90 bps |
| Adjusted Gross Margin (B) / (A) |
61.0% |
60.1% |
+90 bps |
| Table 4: Q2 EBITDA Reconciliation |
|||
| 2016 |
2015 |
V% |
|
| GAAP Net Earnings |
$158.1 |
$171.3 |
|
| Add: Taxes |
66.8 |
59.0 |
|
| Add: Amortization |
50.2 |
40.3 |
|
| Add: Interest Expense |
26.9 |
20.2 |
|
| Add: Depreciation |
9.4 |
9.5 |
|
| Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
2.5 |
2.5 |
|
| Add: Acquisition-Related Inventory Step-up Charge |
0.2 |
-- |
|
| Rounding |
(0.2) |
-- |
|
| EBITDA |
313.9 |
302.8 |
+4% |
| Table 5: 2016 Cash Flow Reconciliation |
|||
| Q1 |
Q2 |
YTD |
|
| 2016 GAAP Operating Cash Flow |
$207.1 |
$169.7 |
$376.8 |
| Add: Tax Related to 2015 Sale of Abel Pump |
37.4 |
-- |
37.4 |
| Rounding |
-- |
-- |
0.1 |
| Adjusted Operating Cash Flow |
$244.5 |
$169.7 |
$414.3 |
| Less: Capital Expenditures |
(9.5) |
(8.8) |
(18.3) |
| Rounding |
-- |
-- |
(0.1) |
| Adjusted Free Cash Flow |
$235.0 |
$160.9 |
$395.9 |
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 25, 2016. The call can be accessed via webcast or by dialing +1 888-505-4368 (US/Canada) or +1 719-325-2435, using confirmation code 8694046. Webcast information and conference call materials will be made available in the Investors section of Roper's website (www.ropertech.com) prior to the start of the call. The webcast can also be accessed directly by using the following URL https://www.webcaster4.com/Webcast/Page/866/16252 . Telephonic replays will be available for up to two weeks and can be accessed by using the following registration URL https://premiereglobal.com/webrsvp with access code 8694046.
About Roper Technologies
Roper Technologies is a constituent of the S&P 500, Fortune 1000, and the Russell 1000 indices. Roper designs and develops software (both software-as-a-service and licensed), and engineered products and solutions for healthcare, transportation, food, energy, water, education and other niche markets worldwide. Additional information about Roper is available on the Company's website at www.ropertech.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 Technologies, Inc. and Subsidiaries |
|||
| Condensed Consolidated Balance Sheets (unaudited) |
|||
| (Amounts in thousands) |
|||
| June 30, |
December 31, |
||
| ASSETS |
2016 |
2015 |
|
| CURRENT ASSETS: |
|||
| Cash and cash equivalents |
$ 622,294 |
$ 778,511 |
|
| Accounts receivable |
509,437 |
488,271 |
|
| Inventories |
191,390 |
189,868 |
|
| Unbilled receivable |
119,053 |
122,042 |
|
| Other current assets |
107,999 |
39,355 |
|
| Total current assets |
1,550,173 |
1,618,047 |
|
| PROPERTY, PLANT AND EQUIPMENT, NET |
104,282 |
105,510 |
|
| OTHER ASSETS: |
|||
| Goodwill |
5,973,770 |
5,824,726 |
|
| Other intangible assets, net |
2,581,293 |
2,528,996 |
|
| Deferred taxes |
30,506 |
31,532 |
|
| Other assets |
57,094 |
59,554 |
|
| Total other assets |
8,642,663 |
8,444,808 |
|
| TOTAL ASSETS |
$ 10,297,118 |
$ 10,168,365 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
| CURRENT LIABILITIES: |
|||
| Accounts payable |
$ 135,598 |
$ 139,737 |
|
| Accrued compensation |
103,267 |
119,511 |
|
| Deferred revenue |
280,984 |
267,030 |
|
| Other accrued liabilities |
186,124 |
168,513 |
|
| Income taxes payable |
21,182 |
18,532 |
|
| Current portion of long-term debt |
5,886 |
6,805 |
|
| Total current liabilities |
733,041 |
720,128 |
|
| NONCURRENT LIABILITIES: |
|||
| Long-term debt |
3,086,263 |
3,264,417 |
|
| Deferred taxes |
834,599 |
810,856 |
|
| Other liabilities |
92,198 |
74,017 |
|
| Total liabilities |
4,746,101 |
4,869,418 |
|
| STOCKHOLDERS' EQUITY: |
|||
| Common stock |
1,033 |
1,028 |
|
| Additional paid-in capital |
1,467,227 |
1,419,262 |
|
| Retained earnings |
4,359,258 |
4,110,530 |
|
| Accumulated other comprehensive earnings |
(257,506) |
(212,779) |
|
| Treasury stock |
(18,995) |
(19,094) |
|
| Total stockholders' equity |
5,551,017 |
5,298,947 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 10,297,118 |
$ 10,168,365 |
|
| Roper Technologies, 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, |
|||||||
| 2016 |
2015 |
2016 |
2015 |
|||||
| Net sales |
$ 931,558 |
$ 889,541 |
$1,833,981 |
$1,754,822 |
||||
| Cost of sales |
364,038 |
355,630 |
706,942 |
702,750 |
||||
| Gross profit |
567,520 |
533,911 |
1,127,039 |
1,052,072 |
||||
| Selling, general and administrative expenses |
314,442 |
281,937 |
628,970 |
553,202 |
||||
| Income from operations |
253,078 |
251,974 |
498,069 |
498,870 |
||||
| Interest expense |
26,863 |
20,177 |
54,276 |
40,013 |
||||
| Other expense |
(1,334) |
(1,520) |
(1,463) |
(2,199) |
||||
| Earnings from continuing operations before |
||||||||
| income taxes |
224,881 |
230,277 |
442,330 |
456,658 |
||||
| Income taxes |
66,812 |
58,997 |
132,845 |
129,605 |
||||
| Net Earnings |
$ 158,069 |
$ 171,280 |
$ 309,485 |
$ 327,053 |
||||
| Earnings per share: |
||||||||
| Basic |
$ 1.56 |
$ 1.70 |
$ 3.06 |
$ 3.26 |
||||
| Diluted |
$ 1.54 |
$ 1.69 |
$ 3.02 |
$ 3.22 |
||||
| Weighted average common and common |
||||||||
| equivalent shares outstanding: |
||||||||
| Basic |
101,249 |
100,573 |
101,160 |
100,475 |
||||
| Diluted |
102,466 |
101,569 |
102,376 |
101,468 |
||||
| Roper Technologies, 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, |
|||||||||||||||
| 2016 |
2015 |
2016 |
2015 |
|||||||||||||
| Amount |
% |
Amount |
% |
Amount |
% |
Amount |
% |
|||||||||
| Net sales: |
||||||||||||||||
| Medical & Scientific Imaging |
$ 340,585 |
$ 302,262 |
$ 672,799 |
$ 593,962 |
||||||||||||
| RF Technology |
288,761 |
255,558 |
568,971 |
498,512 |
||||||||||||
| Industrial Technology |
178,627 |
186,467 |
349,862 |
377,195 |
||||||||||||
| Energy Systems & Controls |
123,585 |
145,254 |
242,349 |
285,153 |
||||||||||||
| Total |
$ 931,558 |
$ 889,541 |
$1,833,981 |
$1,754,822 |
||||||||||||
| Gross profit: |
||||||||||||||||
| Medical & Scientific Imaging |
$ 246,396 |
72.3% |
$ 222,990 |
73.8% |
$ 493,293 |
73.3% |
$ 438,316 |
73.8% |
||||||||
| RF Technology |
163,005 |
56.4% |
134,136 |
52.5% |
323,370 |
56.8% |
264,182 |
53.0% |
||||||||
| Industrial Technology |
89,709 |
50.2% |
93,565 |
50.2% |
175,729 |
50.2% |
188,807 |
50.1% |
||||||||
| Energy Systems & Controls |
68,410 |
55.4% |
83,220 |
57.3% |
134,647 |
55.6% |
160,767 |
56.4% |
||||||||
| Total |
$ 567,520 |
60.9% |
$ 533,911 |
60.0% |
$1,127,039 |
61.5% |
$1,052,072 |
60.0% |
||||||||
| Operating profit*: |
||||||||||||||||
| Medical & Scientific Imaging |
$ 114,271 |
33.6% |
$ 109,261 |
36.1% |
$ 228,727 |
34.0% |
$ 217,040 |
36.5% |
||||||||
| RF Technology |
89,354 |
30.9% |
79,940 |
31.3% |
178,120 |
31.3% |
153,917 |
30.9% |
||||||||
| Industrial Technology |
51,291 |
28.7% |
52,188 |
28.0% |
98,050 |
28.0% |
110,085 |
29.2% |
||||||||
| Energy Systems & Controls |
27,769 |
22.5% |
37,702 |
26.0% |
51,951 |
21.4% |
68,124 |
23.9% |
||||||||
| Total |
$ 282,685 |
30.3% |
$ 279,091 |
31.4% |
$ 556,848 |
30.4% |
$ 549,166 |
31.3% |
||||||||
| Net Orders: |
||||||||||||||||
| Medical & Scientific Imaging |
$ 338,436 |
$ 306,637 |
$ 682,286 |
$ 582,433 |
||||||||||||
| RF Technology |
318,231 |
252,322 |
599,356 |
505,449 |
||||||||||||
| Industrial Technology |
175,967 |
181,845 |
354,872 |
370,585 |
||||||||||||
| Energy Systems & Controls |
123,704 |
140,255 |
246,474 |
271,325 |
||||||||||||
| Total |
$ 956,338 |
$ 881,059 |
$1,882,988 |
$1,729,792 |
||||||||||||
| * Operating profit is before unallocated corporate general and administrative expenses. These expenses were $29,607 and $27,117 for the three months ended June 30, 2016 and 2015, respectively, and $58,779 and $50,296 for the six months ended June 30, 2016 and 2015, respectively. |
||||||||||||||||
| Roper Technologies, Inc. and Subsidiaries |
|||||
| Condensed Consolidated Statements of Cash Flows (unaudited) |
|||||
| (Amounts in thousands) |
|||||
| Six months ended |
|||||
| June 30, |
|||||
| 2016 |
2015 |
||||
| Net earnings |
$ 309,485 |
$ 327,053 |
|||
| Non-cash items: |
|||||
| Depreciation |
19,052 |
19,417 |
|||
| Amortization |
99,719 |
78,758 |
|||
| Stock-based compensation expense |
39,092 |
29,438 |
|||
| Income taxes |
(77,931) |
(36,257) |
|||
| Changes in assets and liabilities: |
|||||
| Receivables |
(10,202) |
29,688 |
|||
| Inventory |
(104) |
(7,972) |
|||
| Accounts payable |
(5,481) |
1,820 |
|||
| Accrued liabilities |
7,763 |
(5,443) |
|||
| Other, net |
(4,561) |
(3,554) |
|||
| Cash provided by operating activities |
376,832 |
432,948 |
|||
| Business acquisitions, net of cash acquired |
(274,968) |
(589,727) |
|||
| Capital expenditures |
(18,348) |
(20,673) |
|||
| Other, net |
79 |
(3,928) |
|||
| Cash used in investing activities |
(293,237) |
(614,328) |
|||
| Principal debt payments |
(289) |
(3,884) |
|||
| Revolver borrowings/(payments), net |
(180,000) |
315,000 |
|||
| Dividends |
(60,383) |
(50,099) |
|||
| Excess tax benefit from share-based payment* |
- |
8,781 |
|||
| Proceeds from stock-based compensation, net |
8,516 |
15,315 |
|||
| Premium on convertible debt conversions |
(915) |
(12,721) |
|||
| Other, net |
1,094 |
849 |
|||
| Cash provided by/(used in) financing activities |
(231,977) |
273,241 |
|||
| Effect of exchange rate changes on cash |
(7,835) |
(23,720) |
|||
| Net increase/(decrease) in cash and equivalents |
(156,217) |
68,141 |
|||
| Cash and equivalents, beginning of period |
778,511 |
610,430 |
|||
| Cash and equivalents, end of period |
$ 622,294 |
$ 678,571 |
|||
| *In the first quarter of 2016, the Company adopted ASU 2016-09, which requires excess |
|||||
| tax benefits to be classified along with other income tax cash flows as an operating activity. |
|||||
SOURCE Roper Technologies, Inc.
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