ROPER TECHNOLOGIES, INC. 
SARASOTA, Fla., Jan. 28, 2013 /PRNewswire/ -- Roper Industries, Inc. (NYSE: ROP), a diversified growth company, reported financial results for the fourth quarter and full year ended December 31, 2012.
Roper reports results, including revenue, operating margin, net income and diluted earnings per share, on a GAAP and non-GAAP basis. The company's guidance is provided on a non-GAAP basis. Non-GAAP measures are reconciled to the corresponding GAAP measures at the end of this release.
Fourth Quarter 2012
Fourth quarter GAAP diluted earnings per share were $1.44 and non-GAAP diluted earnings per share were $1.48. GAAP revenue increased 10% to $810 million and non-GAAP revenue, which excludes a fair value adjustment to acquired deferred revenue, was $816 million. GAAP operating margin increased 250 basis points to 27.8%, while non-GAAP operating margin was 28.3%, a 300 basis point increase over the prior year. Operating cash flow in the quarter was $212 million.
"Our businesses performed exceptionally well in the fourth quarter, as we established records for revenue, orders, gross margin, operating profit, net earnings and cash flow," said Brian Jellison, Roper's Chairman, President and CEO. "EBITDA reached $275 million, or 33.7% of revenue, reflecting the contribution of Sunquest and strong operating leverage on organic growth."
Full Year 2012
"Full year performance across the enterprise was outstanding throughout the year with record levels of revenue, income and cash flow," said Mr. Jellison. "Operating margin expansion was consistent and broad-based, as margins expanded in each of our segments in every quarter of 2012, a reflection of the strength of our business leaders and our disciplined operating model. Gross margin expanded to 56% for the year. Our consistent focus on high margin businesses, differentiated technology and nimble execution continues to deliver exceptional results."
GAAP diluted earnings per share for the year were $4.86 and non-GAAP diluted earnings per share were $4.96. GAAP revenue was $3.0 billion, up 7% over the prior year. GAAP operating margin increased 170 basis points to 25.3%, while non-GAAP operating margin was 25.7%, a 210 basis point increase over the prior year. Operating cash flow was a record $678 million. Free cash flow increased 14% to $639 million and represented 21% of GAAP revenue.
"We invested over $1.4 billion in acquisitions during 2012, adding Sunquest as a new growth platform, as well as attractive bolt-on businesses to our existing platforms," said Mr. Jellison. "We successfully issued $900 million in senior notes during the fourth quarter and ended the year with a strong balance sheet, including over $1.5 billion in cash and available liquidity. We continue to have an attractive pipeline of opportunities and are well positioned as we enter 2013."
2013 Outlook and Guidance
Roper expects 2013 full year non-GAAP diluted earnings per share (DEPS) between $5.60 - $5.82 with expected first quarter non-GAAP DEPS between $1.19 and $1.23.
The company's guidance is provided on a non-GAAP basis, which excludes the fair value adjustment to acquired deferred revenue resulting from the Sunquest acquisition. The company's guidance excludes 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: Q4 Revenue Growth Detail
Q4 2011 Q4 2012 V%
------- ------- ---
GAAP Revenue $739 $810 10%
===
Non-GAAP Revenue $739 $816 10%
===
Components of growth - GAAP
Organic Growth 3%
Acquisitions 7%
Foreign Exchange (0%)
---
Total Growth 10%
===
Table 2: Free Cash Flow Reconciliation
2011 2012 V%
---- ---- ---
GAAP Revenue (B) $2,797 $2,993 7%
Non-GAAP Revenue (C) $2,797 $3,003 7%
Operating Cash Flow 602 678
Less: Capital Expenditures (41) (38)
Rounding - (1)
--- ---
Free Cash Flow (A) 561 639 14%
=== === ===
% of GAAP Revenue (A) / (B) 20.0% 21.4%
% of Non-GAAP Revenue (A) / (C) 20.0% 21.3%
Table 3: EBITDA Reconciliation
Q4 2012
-------
GAAP Revenue $809.9
Non-GAAP Revenue (B) $815.9
GAAP Net Earnings 143.5
Add: Interest Expense 20.5
Add: Income Taxes 61.3
Add: Depreciation &
Amortization 44.0
Add: Fair Value Adjustment to
Acquired Deferred Revenue 6.0
---
EBITDA (A) $275.3
======
% of Non-GAAP Revenue (A) / (B) 33.7%
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, January 28, 2013. The call can be accessed via webcast or by dialing +1 888-438-5524 (US/Canada) or +1 719-457-2645, using confirmation code 6945605. 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 6945605.
About Roper Industries
Roper Industries is a diversified growth 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 water, energy, transportation, medical, education, and SaaS-based information networks. 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)
December 31, December 31,
ASSETS 2012 2011
------ ---- ----
CURRENT ASSETS:
Cash and cash
equivalents $370,590 $338,101
Accounts
receivable 526,408 439,134
Inventories 190,867 204,758
Unbilled
receivable 72,193 63,829
Deferred taxes 45,788 38,004
Other current
assets 43,492 31,647
Total current
assets 1,249,338 1,115,473
------------- --------- ---------
PROPERTY, PLANT
AND EQUIPMENT,
NET 110,397 108,775
--------------- ------- -------
OTHER ASSETS:
Goodwill 3,868,857 2,866,426
Other intangible
assets, net 1,698,867 1,094,142
Deferred taxes 74,848 63,006
Other assets 68,797 71,595
Total other
assets 5,711,369 4,095,169
----------- --------- ---------
TOTAL ASSETS $7,071,104 $5,319,417
============ ========== ==========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
---------------
CURRENT
LIABILITIES:
Accounts payable $138,340 $141,943
Accrued
liabilities 424,987 322,904
Income taxes
payable - 8,895
Deferred taxes 3,868 10,548
Current portion
of long-term
debt 513,928 69,906
--------------- ------- ------
Total current
liabilities 1,081,123 554,196
------------- --------- -------
NONCURRENT
LIABILITIES:
Long-term debt 1,508,194 1,015,110
Deferred taxes 707,278 482,603
Other liabilities 86,783 72,412
Total liabilities 3,383,378 2,124,321
----------------- --------- ---------
STOCKHOLDERS'
EQUITY:
Common stock 1,006 987
Additional paid-
in capital 1,158,001 1,117,093
Retained earnings 2,489,858 2,063,110
Accumulated other
comprehensive
earnings 58,537 33,800
Treasury stock (19,676) (19,894)
-------------- ------- -------
Total
stockholders'
equity 3,687,726 3,195,096
-------------- --------- ---------
TOTAL LIABILITIES
AND
STOCKHOLDERS'
EQUITY $7,071,104 $5,319,417
================= ========== ==========
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
2012 2011 2012 2011
---- ---- ---- ----
Net sales $809,910 $739,204 $2,993,489 $2,797,089
Cost of sales 343,549 333,355 1,321,772 1,281,525
------------- ------- ------- --------- ---------
Gross profit 466,361 405,849 1,671,717 1,515,564
Selling, general and administrative expenses 241,119 218,495 914,130 855,025
-------------------------------------------- ------- ------- ------- -------
Income from operations 225,242 187,354 757,587 660,539
Interest expense 20,509 15,383 67,525 63,648
Loss on extinguishment of debt - - (1,043) -
Other income/(expense) 106 (548) (2,338) 8,096
---------------------- --- ---- ------ -----
Earnings from continuing operations before
income taxes 204,839 171,423 686,681 604,987
Income taxes 61,309 49,747 203,321 177,740
------------ ------ ------ ------- -------
Net Earnings $143,530 $121,676 $483,360 $427,247
============ ======== ======== ======== ========
Earnings per share:
Basic $1.46 $1.26 $4.95 $4.45
Diluted $1.44 $1.23 $4.86 $4.34
Weighted average common and common
equivalent shares outstanding:
Basic 98,422 96,455 97,702 95,959
Diluted 99,576 98,662 99,558 98,386
======= ====== ====== ====== ======
Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
Three months ended December 31, Twelve months ended December 31,
------------------------------- --------------------------------
2012 2011 2012 2011
---- ---- ---- ----
Amount % Amount % Amount % Amount %
------ --- ------ --- ------ --- ------ ---
Net sales:
Industrial Technology $197,152 $198,661 $795,240 $737,356
Energy Systems & Controls 184,608 172,034 646,116 597,802
Medical & Scientific Imaging 217,628 157,782 703,835 610,617
RF Technology 210,522 210,727 848,298 851,314
Total $809,910 $739,204 $2,993,489 $2,797,089
===== ======== ======== ========== ==========
Gross profit:
Industrial Technology(1) $106,178 53.9% $97,947 49.3% $410,180 51.6% $366,967 49.8%
Energy Systems & Controls 109,291 59.2% 99,356 57.8% 363,616 56.3% 331,746 55.5%
Medical & Scientific Imaging(2) 139,084 63.9% 100,947 64.0% 453,495 64.4% 386,242 63.3%
RF Technology 111,808 53.1% 107,599 51.1% 444,426 52.4% 430,609 50.6%
Total $466,361 57.6% $405,849 54.9% $1,671,717 55.8% $1,515,564 54.2%
===== ======== ==== ======== ==== ========== ==== ========== ====
Operating profit*:
Industrial Technology(1) $64,480 32.7% $58,032 29.2% $244,691 30.8% $208,188 28.2%
Energy Systems & Controls 61,075 33.1% 52,537 30.5% 179,824 27.8% 157,960 26.4%
Medical & Scientific Imaging(2) 62,015 28.5% 39,377 25.0% 187,246 26.6% 148,376 24.3%
RF Technology 56,819 27.0% 52,464 24.9% 223,335 26.3% 202,877 23.8%
------ ------ ------- -------
Total $244,389 30.2% $202,410 27.4% $835,096 27.9% $717,401 25.6%
===== ======== ==== ======== ==== ======== ==== ======== ====
Net Orders:
Industrial Technology $185,285 $184,051 $783,362 $767,020
Energy Systems & Controls 175,596 171,905 634,051 608,538
Medical & Scientific Imaging 208,784 153,335 703,034 612,787
RF Technology 209,399 185,390 871,225 834,903
------- ------- ------- -------
Total $779,064 $694,681 $2,991,672 $2,823,248
===== ======== ======== ========== ==========
* Operating profit is before unallocated corporate general and administrative expenses. These expenses
were $19,147 and $15,056 for the three months ended December 31, 2012 and 2011, respectively, and
$77,509 and $56,862 for the twelve months ended December 31, 2012 and 2011, respectively.
(1) Includes a favorable fourth quarter 2012 accounts payable correction of $5.5 million.
(2) Includes a fourth quarter 2012 charge for inventory and tooling for a medical product line of $4.0 million.
Roper Industries,
Inc. and
Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts
in
thousands)
Twelve months ended
December 31,
------------
2012 2011
---- ----
Net
earnings $483,360 $427,247
Non-
cash
items:
Depreciation 37,888 36,780
Amortization 116,860 103,363
Stock-
based
compensation
expense 40,773 31,730
Income
taxes (15,988) 14,526
Changes
in
assets
and
liabilities:
Receivables (21,577) (21,574)
Inventory 18,361 (23,033)
Accounts
payable (8,480) 1,903
Accrued
liabilities 17,689 22,444
Other,
net 8,966 8,232
------ ----- -----
Cash
provided
by
operating
activities 677,852 601,618
Business
acquisitions,
net of
cash
acquired (1,467,772) (233,594)
Capital
expenditures (38,405) (40,702)
Other,
net 632 (1,453)
------ --- ------
Cash
used by
investing
activities (1,505,545) (275,749)
Principal
debt
borrowings 900,000 -
Principal
debt
payments (57,304) (26,457)
Revolver
borrowings
(payments),
net 100,000 (230,000)
Debt
issuance
costs (12,213) -
Dividends (69,903) (42,090)
Excess
tax
benefit
from
share-
based
payment 30,747 12,664
Proceeds
from
stock-
based
compensation,
net 37,679 28,167
Redemption
premium
on
convertible
debt (76,641) -
Other,
net 1,505 1,037
------ ----- -----
Cash
provided
by
(used
in)
financing
activities 853,870 (256,679)
Effect
of
exchange
rate
changes
on cash 6,312 (1,483)
--------- ----- ------
Net
increase
in cash
and
equivalents 32,489 67,707
Cash and
equivalents,
beginning
of
period 338,101 270,394
------------- ------- -------
Cash and
equivalents,
end of
period $370,590 $338,101
============= ======== ========
ROPER INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS - RECONCILIATION OF GAAP TO NON-GAAP
(Amounts in thousands, except per share data)
Adjustment
----------
2012 Fair Value Adjustment 2012
4th Quarter to Acquired 4th Quarter
GAAP Deferred Revenue Non-GAAP
---- ---------------- --------
Net Sales $809,910 $5,952 $815,862
Cost of Sales 343,549 - 343,549
------- --- -------
Gross Profit 466,361 5,952 472,313
Selling, general and administrative expenses 221,972 - 221,972
------- --- -------
Segment income from operations 244,389 5,952 250,341
Corporate general and administrative expenses 19,147 - 19,147
------ --- ------
Income from operations 225,242 5,952 231,194
------- ----- -------
Interest Expense 20,509 - 20,509
Other income (expense) 106 - 106
--- --- ---
Earnings from continuing operations before income
taxes 204,839 5,952 210,791
------- ----- -------
IncomeTaxes (1) 61,309 2,083 63,392
Tax Rate 29.9% 35.0% 30.1%
Net Earnings $143,530 $3,869 $147,398
-------- ------ --------
Weighted average common shares outstanding 99,576 99,576
Diluted earnings per share $1.44 $1.48
(1) For the adjustment, the company used a 35% tax rate, as this adjustment is a US-based item and 35% is
the statutory tax rate in the United States
ROPER INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS - RECONCILIATION OF GAAP TO NON-GAAP
(Amounts in thousands, except per share data)
Adjustments
-----------
2012 Fair Value Adjustment Sunquest Debt 2012
Fully Year to Acquired Acquisition-Related Extinguishment Fully Year
Reported Deferred Revenue Expenses Charge Adjusted
-------- ---------------- -------- ------ --------
Net Sales $2,993,489 $9,082 - - $3,002,571
Cost of Sales 1,321,772 - - - 1,321,772
Gross Profit 1,671,717 9,082 - - 1,680,799
Selling, general and administrative expenses 836,621 - - - 836,621
Segment income from operations 835,096 9,082 - - 844,178
Corporate general and administrative expenses 77,509 - (6,308) - 71,201
Income from operations 757,587 9,082 6,308 - 772,977
Interest Expense 67,525 - - - 67,525
Other income (expense) (3,381) - - 1,043 (2,338)
Earnings from continuing operations before income
taxes 686,681 9,082 6,308 1,043 703,114
Income Taxes (1) 203,321 3,179 2,208 365 209,073
Tax Rate 29.6% 35.0% 35.0% 35.0% 29.7%
Net Earnings $483,360 $5,903 $4,100 $678 $494,041
Weighted average common shares outstanding 99,558 99,558
Diluted earnings per share $4.86 $4.96
(1) For the three adjustments, the company used a 35% tax rate, as these adjustments are all US-based items, and 35% is the statutory tax rate in the United States
SOURCE Roper Industries, Inc.
