ROPER TECHNOLOGIES, 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 2(nd), 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 V%
Earnings
Per Share
---------
Q2 2014 GAAP DEPS $1.56
Q2 2013 GAAP DEPS $1.11 41%
Add: Purchase Accounting
Adjustment for $0.14
Acquired Revenue (Sunquest,
MHA)
Add: Special Charge for
Vendor-Supplied $0.06
Component Quality Issue
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.
