ROPER TECHNOLOGIES, INC. SARASOTA, Fla., July 27, 2015 /PRNewswire/ -- Roper Technologies, Inc. (NYSE: ROP) reported financial results for the second quarter ended June 30, 2015.
Roper reports results, including revenue, operating margin, 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 GAAP diluted earnings per share (DEPS) were $1.69, an 8% increase over the prior year and adjusted DEPS were $1.70, a 9% increase over last year. GAAP revenue increased to $890 million and adjusted revenue increased 1% to $892 million. GAAP operating profit increased to $252 million, representing 28.3% of revenue. Adjusted operating profit increased to $254 million and adjusted operating margin increased 60 basis points to 28.5%.
GAAP gross margin increased 90 basis points to 60.0% and adjusted gross margin increased to 60.1%, a 100 basis point gain over the prior year. Operating cash flow increased 23% to $173 million. First half operating cash flow was a record $433 million, a 23% increase over the prior year.
"We were pleased with our performance in the second quarter," said Brian Jellison, Roper's Chairman, President and CEO. "Continued growth in our Medical and RF Technology segments offset declines in energy-related markets. Our businesses acted quickly, taking appropriate cost actions in light of more difficult market conditions. EBITDA margin increased 60 basis points to 33.9%. Revenue from acquisitions completed in the last year contributed 4% growth, more than offsetting a 3% decline due to foreign exchange. Importantly, free cash flow was exceptional, as YTD free cash flow increased 24% to $412 million."
On July 20(th), the company completed the acquisition of On Center Software, Inc., headquartered in The Woodlands, Texas. On Center Software is a leading provider of construction automation management solutions. "We are pleased to welcome Cecilia Padilla, her leadership team and all the employees of On Center to the Roper family," said Mr. Jellison. "With our record cash flow, a strong balance sheet and a full pipeline of opportunities, we expect to complete additional acquisitions in the year."
2015 Guidance Update
Roper expects full year diluted earnings per share to be $6.61 - $6.75 versus previous guidance of $6.75 - $6.95. This reflects continued strength in the company's Medical and RF Technology segments and more difficult end market conditions in energy-related markets, particularly businesses serving upstream oil and gas customers. The company expects third quarter diluted earnings per share to be $1.53 - $1.57. 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: Q2 Revenue Growth Detail
Revenue V%
------- ---
Q2 2014 Revenue (A) $885M
Q2 2015 GAAP Revenue $890M 0%
Add: Purchase Accounting Adjustment to 3
Acquired Deferred Revenue (FoodLink,
SHP,
Strata, SoftWriters, Data Innovations)
Rounding (1)
---
Q2 2015 Adjusted Revenue (B) $892M
Increase (B)/(A) 1%
Components of Adjusted Revenue Growth
Organic 0%
Acquisitions / Divestitures 4%
Foreign Exchange (3%)
---
Total Growth 1%
===
Table 2: Reconciliation of GAAP
DEPS to Adjusted DEPS
Q2 2015 Q2 2014 V%
------- ------- ---
GAAP Diluted Earnings Per Share
(DEPS) $1.69 $1.56 8%
Add: Purchase Accounting
Adjustment to $0.02 -
Acquired Deferred Revenue
(FoodLink, SHP,
Strata, SoftWriters, Data
Innovations), net of
tax @35%
Rounding ($0.01) -
Adjusted DEPS $1.70 $1.56 9%
===== =====
Table 3: Free Cash Flow Reconciliation
1H 2015 1H 2014 V%
------- ------- ---
Operating Cash Flow $433M $353M 23%
Less: Capital Expenditures (21) (21)
Rounding - 1
--- ---
Free Cash Flow $412M $333M 24%
===== =====
Table 4: Adjusted Revenue and Adjusted
Gross Margin Reconciliation
2015 2014 V bps
---- ---- -----
Q2 GAAP Revenue $889.5M $885.2M
Add: Purchase Accounting Adjustment to 2.5 -
Acquired Deferred Revenue (FoodLink,
SHP,
Strata, SoftWriters, Data Innovations)
Rounding 0.1 -
Q2 Adjusted Revenue (A) $892.1M $885.2M
Q2 GAAP Gross Profit $533.9M $523.2M
Add: Purchase Accounting Adjustment to 2.5 -
Acquired Deferred Revenue (FoodLink,
SHP,
Strata, SoftWriters, Data Innovations)
Adjusted Gross Profit (B) $536.4M $523.2M
GAAP Gross Margin 60.0% 59.1% +90 bps
Adjusted Gross Margin (B) / (A) 60.1% 59.1% +100 bps
Table 5: Adjusted Revenue and Adjusted
Operating Margin Reconciliation
2015 2014 V bps
---- ---- -----
Q2 GAAP Revenue $889.5M $885.2M
Add: Purchase Accounting Adjustment to 2.5 -
Acquired Deferred Revenue (FoodLink,
SHP,
Strata, SoftWriters, Data Innovations)
Rounding 0.1 -
Q2 Adjusted Revenue (A) $892.1M $885.2M
Q2 GAAP Operating Profit $252.0M $246.7M
Add: Purchase Accounting Adjustment to 2.5 -
Acquired Deferred Revenue (FoodLink,
SHP,
Strata, SoftWriters, Data Innovations)
Adjusted Operating Profit (B) $254.5M $246.7M
GAAP Operating Margin 28.3% 27.9% +40 bps
Adjusted Operating Margin (B) / (A) 28.5% 27.9% +60 bps
Table 6: Adjusted Revenue and EBITDA
Margin Reconciliation
2015 2014 V bps
---- ---- -----
Q2 GAAP Revenue $889.5M $885.2M
Add: Purchase Accounting Adjustment to 2.5 -
Acquired Deferred Revenue (FoodLink,
SHP,
Strata, SoftWriters, Data Innovations)
Rounding 0.1 -
Q2 Adjusted Revenue (A) $892.1M $885.2M
Q2 GAAP Net Earnings $171.3M $157.4M
Add: Interest Expense 20.2 19.5
Add: Taxes 59.9 68.9
Add: Depreciation 9.5 10.4
Add: Amortization 40.3 38.5
Add: Purchase Accounting Adjustment to 1.6 -
Acquired Deferred Revenue (FoodLink,
SHP,
Strata, SoftWriters, Data Innovations),
net of
35% tax
Rounding - (0.1)
--- ----
EBITDA (B) $302.8M $294.6M
EBITDA Margin (B) / (A) 33.9% 33.3% +60 bps
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 27, 2015. The call can be accessed via webcast or by dialing +1 888-428-9490 (US/Canada) or +1 719-457-2083, using confirmation code 3782671. 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/866/9472. Telephonic replays will be available for up to two weeks by calling +1 719-457-0820 and using the access code 3782671.
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 academic research 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 2015 2014
------ ---- ----
CURRENT ASSETS:
Cash and cash
equivalents $678,571 $610,430
Accounts receivable 481,599 511,538
Inventories 197,026 193,766
Unbilled receivable 107,999 96,409
Deferred taxes 58,194 54,199
Other current assets 63,893 45,763
------
Total current assets 1,587,282 1,512,105
-------------------- --------- ---------
PROPERTY, PLANT AND
EQUIPMENT, NET 112,374 110,876
------------------- ------- -------
OTHER ASSETS:
Goodwill 5,111,662 4,710,691
Other intangible
assets, net 2,108,964 1,978,729
Deferred taxes 34,599 27,496
Other assets 79,215 73,037
Total other assets 7,334,440 6,789,953
------------------ --------- ---------
TOTAL ASSETS $9,034,096 $8,412,934
============ ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $145,584 $143,847
Accrued compensation 97,312 117,374
Deferred revenue 234,067 190,953
Other accrued
liabilities 166,929 160,738
Deferred taxes 3,841 3,943
Current portion of
long-term debt 7,208 11,092
------------------ ----- ------
Total current
liabilities 654,941 627,947
------------- ------- -------
NONCURRENT LIABILITIES:
Long-term debt 2,517,499 2,203,031
Deferred taxes 754,297 735,826
Other liabilities 88,010 90,770
Total liabilities 4,014,747 3,657,574
----------------- --------- ---------
STOCKHOLDERS' EQUITY:
Common stock 1,026 1,021
Additional paid-in
capital 1,368,335 1,325,338
Retained earnings 3,796,957 3,520,201
Accumulated other
comprehensive earnings (127,788) (71,927)
Treasury stock (19,181) (19,273)
-------------- ------- -------
Total stockholders'
equity 5,019,349 4,755,360
------------------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $9,034,096 $8,412,934
===================== ========== ==========
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,
-------- --------
2015 2014 2015 2014
---- ---- ---- ----
Net sales $889,541 $885,175 $1,754,822 $1,719,227
Cost of sales 355,630 361,993 702,750 707,109
------------- ------- ------- ------- -------
Gross profit 533,911 523,182 1,052,072 1,012,118
Selling, general and administrative expenses 281,937 276,516 553,202 542,052
-------------------------------------------- ------- ------- ------- -------
Income from operations 251,974 246,666 498,870 470,066
Interest expense 20,177 19,512 40,013 39,339
Other income/(expense) (1,520) (930) (2,199) 490
---------------------- ------ ---- ------ ---
Earnings from continuing operations before
income taxes 230,277 226,224 456,658 431,217
Income taxes 58,997 68,863 129,605 126,630
------------ ------ ------ ------- -------
Net Earnings $171,280 $157,361 $327,053 $304,587
============ ======== ======== ======== ========
Earnings per share:
Basic $1.70 $1.58 $3.26 $3.05
Diluted $1.69 $1.56 $3.22 $3.02
Weighted average common and common
equivalent shares outstanding:
Basic 100,573 99,881 100,475 99,720
Diluted 101,569 100,823 101,468 100,696
======= ======= ======= ======= =======
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,
--------------------------- -------------------------
2015 2014 2015 2014
---- ---- ---- ----
Amount % Amount % Amount % Amount %
------ --- ------ --- ------ --- ------ ---
Net sales:
Medical & Scientific Imaging $302,262 $268,891 $593,962 $525,090
RF Technology 255,558 245,602 498,512 471,283
Industrial Technology 186,467 204,814 377,195 401,815
Energy Systems & Controls 145,254 165,868 285,153 321,039
Total $889,541 $885,175 $1,754,822 $1,719,227
===== ======== ======== ========== ==========
Gross profit:
Medical & Scientific Imaging $222,990 73.8% $194,756 72.4% $438,316 73.8% $379,606 72.3%
RF Technology 134,136 52.5% 128,587 52.4% 264,182 53.0% 248,238 52.7%
Industrial Technology 93,565 50.2% 103,982 50.8% 188,807 50.1% 202,452 50.4%
Energy Systems & Controls 83,220 57.3% 95,857 57.8% 160,767 56.4% 181,822 56.6%
Total $533,911 60.0% $523,182 59.1% $1,052,072 60.0% $1,012,118 58.9%
===== ======== ==== ======== ==== ========== ==== ========== ====
Operating profit*:
Medical & Scientific Imaging $109,261 36.1% $94,381 35.1% $217,040 36.5% $184,152 35.1%
RF Technology 79,940 31.3% 71,272 29.0% 153,917 30.9% 133,832 28.4%
Industrial Technology 52,188 28.0% 60,438 29.5% 110,085 29.2% 116,494 29.0%
Energy Systems & Controls 37,702 26.0% 44,786 27.0% 68,124 23.9% 81,811 25.5%
Total $279,091 31.4% $270,877 30.6% $549,166 31.3% $516,289 30.0%
===== ======== ==== ======== ==== ======== ==== ======== ====
Net Orders:
Medical & Scientific Imaging $306,637 $271,800 $582,433 $528,140
RF Technology 252,322 235,828 505,449 470,173
Industrial Technology 181,845 200,248 370,585 405,129
Energy Systems & Controls 140,255 166,041 271,325 316,934
Total $881,059 $873,917 $1,729,792 $1,720,376
===== ======== ======== ========== ==========
* Operating profit is before unallocated corporate general and administrative expenses. These expenses
were $27,117 and $24,211 for the three months ended June 30, 2015 and 2014, respectively, and
$50,296 and $46,223 for the six months ended June 30, 2015 and 2014, respectively.
Roper Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
Six months ended
June 30,
--------
2015 2014
---- ----
Net earnings $327,053 $304,587
Non-cash items:
Depreciation 19,417 20,089
Amortization 78,758 77,495
Stock-based compensation
expense 29,438 30,013
Income taxes (36,257) (42,664)
Changes in assets and
liabilities:
Receivables 29,688 (19,675)
Inventory (7,972) (6,515)
Accounts payable 1,820 (2,871)
Accrued liabilities (5,443) (4,045)
Other, net (3,554) (3,284)
---------- ------ ------
Cash provided by operating
activities 432,948 353,130
Business acquisitions, net of
cash acquired (589,727) (2,726)
Capital expenditures (20,673) (20,560)
Other, net (3,928) 526
---------- ------ ---
Cash used by investing
activities (614,328) (22,760)
Principal debt payments, (3,884) (561)
Revolver borrowings/
(payments), net 315,000 (220,000)
Dividends (50,099) (39,821)
Excess tax benefit from share-
based payment 8,781 12,058
Proceeds from stock-based
compensation, net 15,315 21,686
Premium on convertible debt
conversions (12,721) (1,518)
Other, net 849 1,811
---------- --- -----
Cash provided by/(used in)
financing activities 273,241 (226,345)
Effect of exchange rate
changes on cash (23,720) 1,537
----------------------- ------- -----
Net increase in cash and
equivalents 68,141 105,562
Cash and equivalents,
beginning of period 610,430 459,720
--------------------- ------- -------
Cash and
equivalents, end
of period $678,571 $565,282
================= ======== ========
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SOURCE Roper Technologies, Inc.
