Roper (ROP) 8-K Roper Industries Announces Record Results for Fourth Quarter and Full Year 2012

Contact Information:Investor Relations 941-556-2601investor-relations@roperind.com Roper Industries, Inc.

Roper Industries Announces Record Results for Fourth Quarter and Full Year 2012

Sarasota, Florida, January 28, 2013 ... 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 4th Quarter GAAP			Fair Value Adjustment to Acquired Deferred Revenue			2012 4th Quarter 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 Fully Year Reported			Fair Value Adjustment to Acquired Deferred Revenue			Sunquest Acquisition-Related Expenses			Debt Extinguishment Charge			2012 Fully Year 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
IncomeTaxes (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