ROPER TECHNOLOGIES, INC. 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,
--------
2015
2016
----
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.
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SOURCE Roper Technologies, Inc.
