Exhibit 99.1
Contact Information: Investor Relations 941-556-2601 investor-relations@roperind.com |  Roper Industries, Inc. |
Roper Industries Announces Record Second Quarter Results
Sarasota, Florida, July 29, 2013 ... Roper Industries, Inc. (NYSE: ROP) reported financial results for the second quarter ended June 30, 2013.
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 were $1.11 and adjusted diluted earnings per share were $1.31. GAAP revenue increased 8% to $784 million and adjusted revenue increased 11% to $805 million. Orders increased to $835 million and represented a book-to-bill ratio of 1.04.
GAAP gross margin reached 56.8% and adjusted gross margin increased to 57.9%, a 300 basis point gain over the prior year. Operating cash flow in the quarter was $140 million, a 17% increase over the prior year. Free cash flow increased 19% to $129 million.
"We are pleased with our second quarter results and see positive momentum in our businesses," said Brian Jellison, Roper's Chairman, President and CEO. "We delivered organic growth consistent with our expectations while securing significant orders for second half delivery, supporting our ability to achieve improving organic growth throughout the year. Backlog increased 17% to a record $1.03 billion. Our significant expansion in gross margin was broad-based, with increases in all four segments."
"We completed the acquisition of Managed Health Care Associates, Inc. (MHA) on May 1, 2013 and its early performance reinforces our confidence about its future," continued Mr. Jellison. "We also successfully issued $800 million of senior notes in the quarter, further strengthening our balance sheet. We maintain substantial capacity for future acquisitions and have an attractive pipeline of opportunities."
Special Charge
Second quarter GAAP results include a pretax charge of $9.1 million, or $0.06 per diluted share, in the Industrial Technology segment. The company determined that a vendor-supplied component in a refrigeration-system valve did not meet our quality standards. The company decided to exchange affected product, and has recorded this charge to reflect the estimated program cost, while it engages in an ongoing discussion with the vendor.
2013 Outlook and Guidance
The company is updating its full year adjusted diluted earnings per share guidance to be between $5.72 - $5.86 compared to $5.76 - $5.94 previously. "We expect total sales growth in the second half of the year to be 12% - 14%," said Mr. Jellison. "Contributions from acquisitions continue to be on-track and due to changes in certain niche businesses, we expect second half organic growth between 6% - 8%, compared to our prior expectation of 7% - 9%." The company expects full year operating cash flow to exceed $800 million, consistent with the company's previous guidance.
The company's guidance for full year adjusted diluted earnings per share includes the recognition of acquired revenue which will be excluded under GAAP's purchase accounting rules, and also excludes certain items as detailed later in this press release under the heading "Use of Non-GAAP Financial Measures." The company's guidance excludes the impact of any future acquisitions.
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 29, 2013. The call can be accessed via webcast or by dialing +1 888-428-9490 (US/Canada) or +1 719-325-2472, using confirmation code 6227963. 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 6227963.
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. 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: Second Quarter Revenue Growth
| GAAP | Adjusted | |
| Acquisitions / Divestitures | 8% | 11% |
| Organic | 1% | 1% |
| Foreign Currency | - | - |
| Rounding | (1%) | (1%) |
| Total Revenue Growth | 8% | 11% |
Table 2: Gross Margin Reconciliation
| Q2 2013 | Q2 2012 | % Change | |||
| GAAP Revenue | $784.0 | $724.9 | +8% | ||
| Add: Purchase Accounting Adjustment for Acquired Revenue | 20.9 | 0.0 | n.a. | ||
| Adjusted Revenue (B) | $804.9 | $724.9 | +11% | ||
| GAAP Gross Profit | $445.5 | $397.6 | +12% | ||
| Add: Purchase Accounting Adjustment for Acquired Revenue | 20.9 | 0.0 | n.a. | ||
| Adjusted Gross Profit (A) | $466.4 | $397.6 | +17% | ||
| Adjusted Gross Margin (A)/(B) | 57.9% | 54.9% | +300 bps |
Table 3: Second Quarter Adjusted Diluted Earnings Per Share
| Q2 2013 | |
| GAAP Diluted Earnings Per Share | $1.11 |
| Add: Purchase Accounting Adjustment for Acquired Revenue (Sunquest, MHA) | 0.14 |
| Add: Special Charge for Vendor-Supplied Component Quality Issue | 0.06 |
| Adjusted Diluted Earnings Per Share | $1.31 |
Table 4: Free Cash Flow
| Q2 2013 | Q2 2012 | ||
| Operating Cash Flow | $139.7 | $119.3 | |
| Less: Capital Expenditures | (10.6) | (10.5) | |
| Free Cash Flow | $129.1 | $108.8 |
Table 5: Full Year 2013 Adjusted Diluted Earnings Per Share Guidance
| Low End | High End | |||
| GAAP Diluted Earnings Per Share Guidance | $5.41 | $5.57 | ||
| Add: Purchase Accounting Adjustment for Acquired Revenue | $0.22 | $0.22 | ||
| Add: Second Quarter Charge for Vendor-Supplied Component Quality Issue | $0.06 | $0.06 | ||
| Add: Estimated Second Half Impact from Vendor-Supplied Component Quality Issue | $0.03 | $0.01 | ||
| Adjusted Diluted Earnings Per Share Guidance | $5.72 | $5.86 | ||
| Previous Adjusted Diluted Earnings Per Share Guidance | $5.76 | $5.94 |
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 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 and profit 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 our 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 | 2013 | 2012 | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 374,571 | $ | 370,590 | ||||
| Accounts receivable, net | 547,572 | 526,408 | ||||||
| Inventories, net | 197,458 | 190,867 | ||||||
| Unbilled receivable | 84,319 | 72,193 | ||||||
| Deferred taxes | 58,582 | 41,992 | ||||||
| Other current assets | 65,633 | 43,492 | ||||||
| Total current assets | 1,328,135 | 1,245,542 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 115,677 | 110,397 | ||||||
| OTHER ASSETS: | ||||||||
| Goodwill | 4,521,774 | 3,868,857 | ||||||
| Other intangible assets, net | 2,084,677 | 1,698,867 | ||||||
| Deferred taxes | 86,579 | 78,644 | ||||||
| Other assets | 76,900 | 68,797 | ||||||
| Total other assets | 6,769,930 | 5,715,165 | ||||||
| TOTAL ASSETS | $ | 8,213,742 | $ | 7,071,104 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 139,296 | $ | 138,340 | ||||
| Accrued compensation | 83,862 | 110,724 | ||||||
| Deferred revenue | 209,249 | 185,912 | ||||||
| Other accrued liabilities | 171,050 | 128,351 | ||||||
| Deferred taxes | 10,595 | 3,868 | ||||||
| Current portion of long-term debt | 512,799 | 519,015 | ||||||
| Total current liabilities | 1,126,851 | 1,086,210 | ||||||
| NONCURRENT LIABILITIES: | ||||||||
| Long-term debt | 2,245,424 | 1,503,107 | ||||||
| Deferred taxes | 856,551 | 707,278 | ||||||
| Other liabilities | 95,368 | 86,783 | ||||||
| Total liabilities | 4,324,194 | 3,383,378 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock | 1,012 | 1,006 | ||||||
| Additional paid-in capital | 1,198,269 | 1,158,001 | ||||||
| Retained earnings | 2,693,421 | 2,489,858 | ||||||
| Accumulated other comprehensive earnings | 16,416 | 58,537 | ||||||
| Treasury stock | (19,570 | ) | (19,676 | ) | ||||
| Total stockholders' equity | 3,889,548 | 3,687,726 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 8,213,742 | $ | 7,071,104 | ||||
| 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, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net sales | $ | 784,010 | $ | 724,872 | $ | 1,521,145 | $ | 1,435,938 | ||||||||
| Cost of sales | 338,503 | 327,264 | 654,062 | 647,137 | ||||||||||||
| Gross profit | 445,507 | 397,608 | 867,083 | 788,801 | ||||||||||||
| Selling, general and administrative expenses | 265,761 | 218,824 | 502,160 | 439,713 | ||||||||||||
| Income from operations | 179,746 | 178,784 | 364,923 | 349,088 | ||||||||||||
| Interest expense | 22,361 | 15,077 | 43,219 | 30,560 | ||||||||||||
| Other income/(expense) | 2,536 | (574 | ) | 44 | (1,064 | ) | ||||||||||
| Earnings from continuing operations before | ||||||||||||||||
| income taxes | 159,921 | 163,133 | 321,748 | 317,464 | ||||||||||||
| Income taxes | 48,568 | 48,320 | 85,481 | 94,342 | ||||||||||||
| Net Earnings | $ | 111,353 | $ | 114,813 | $ | 236,267 | $ | 223,122 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 1.12 | $ | 1.18 | $ | 2.39 | $ | 2.29 | ||||||||
| Diluted | $ | 1.11 | $ | 1.15 | $ | 2.36 | $ | 2.24 | ||||||||
| Weighted average common and common | ||||||||||||||||
| equivalent shares outstanding: | ||||||||||||||||
| Basic | 99,089 | 97,460 | 98,983 | 97,249 | ||||||||||||
| Diluted | 100,162 | 99,619 | 100,071 | 99,500 | ||||||||||||
| 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, | |||||||||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||
| Net sales: | ||||||||||||||||||||||||||||||||
| Industrial Technology | $ | 197,543 | $ | 203,944 | $ | 379,782 | $ | 399,080 | ||||||||||||||||||||||||
| Energy Systems & Controls | 155,331 | 154,737 | 300,973 | 303,339 | ||||||||||||||||||||||||||||
| Medical & Scientific Imaging | 207,957 | 150,921 | 408,401 | 313,732 | ||||||||||||||||||||||||||||
| RF Technology | 223,179 | 215,270 | 431,989 | 419,787 | ||||||||||||||||||||||||||||
| Total | $ | 784,010 | $ | 724,872 | $ | 1,521,145 | $ | 1,435,938 | ||||||||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||||||||||||
| Industrial Technology | $ | 101,844 | 51.6 | % | $ | 102,770 | 50.4 | % | $ | 195,155 | 51.4 | % | $ | 201,433 | 50.5 | % | ||||||||||||||||
| Energy Systems & Controls | 87,421 | 56.3 | % | 86,135 | 55.7 | % | 168,327 | 55.9 | % | 166,543 | 54.9 | % | ||||||||||||||||||||
| Medical & Scientific Imaging | 138,416 | 66.6 | % | 96,212 | 63.7 | % | 273,285 | 66.9 | % | 202,398 | 64.5 | % | ||||||||||||||||||||
| RF Technology | 117,826 | 52.8 | % | 112,491 | 52.3 | % | 230,316 | 53.3 | % | 218,427 | 52.0 | % | ||||||||||||||||||||
| Total | $ | 445,507 | 56.8 | % | $ | 397,608 | 54.9 | % | $ | 867,083 | 57.0 | % | $ | 788,801 | 54.9 | % | ||||||||||||||||
| Operating profit*: | ||||||||||||||||||||||||||||||||
| Industrial Technology | $ | 50,580 | 25.6 | % | $ | 62,076 | 30.4 | % | $ | 103,525 | 27.3 | % | $ | 119,583 | 30.0 | % | ||||||||||||||||
| Energy Systems & Controls | 41,634 | 26.8 | % | 40,202 | 26.0 | % | 77,356 | 25.7 | % | 75,859 | 25.0 | % | ||||||||||||||||||||
| Medical & Scientific Imaging | 47,537 | 22.9 | % | 35,679 | 23.6 | % | 107,465 | 26.3 | % | 79,041 | 25.2 | % | ||||||||||||||||||||
| RF Technology | 60,729 | 27.2 | % | 58,161 | 27.0 | % | 117,359 | 27.2 | % | 108,514 | 25.8 | % | ||||||||||||||||||||
| Total | $ | 200,480 | 25.6 | % | $ | 196,118 | 27.1 | % | $ | 405,705 | 26.7 | % | $ | 382,997 | 26.7 | % | ||||||||||||||||
| Net Orders: | ||||||||||||||||||||||||||||||||
| Industrial Technology | $ | 204,506 | $ | 202,120 | $ | 384,313 | $ | 406,122 | ||||||||||||||||||||||||
| Energy Systems & Controls | 159,955 | 157,775 | 317,492 | 311,151 | ||||||||||||||||||||||||||||
| Medical & Scientific Imaging | 210,233 | 148,386 | 426,353 | 316,722 | ||||||||||||||||||||||||||||
| RF Technology | 241,817 | 255,195 | 481,935 | 458,867 | ||||||||||||||||||||||||||||
| Total | $ | 816,511 | $ | 763,476 | $ | 1,610,093 | $ | 1,492,862 | ||||||||||||||||||||||||
| * Operating profit is before unallocated corporate general and administrative expenses. These expenses | ||||||||||||||||||||||||||||||||
| were $20,734 and $17,334 for the three months ended June 30, 2013 and 2012, respectively and | ||||||||||||||||||||||||||||||||
| $40,782 and $33,909 for the six months ended June 30, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||||
| Roper Industries, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||
| (Amounts in thousands) | ||||||||
| Six months ended | ||||||||
| June 30, | ||||||||
| 2013 | 2012 | |||||||
| Net earnings | $ | 236,267 | $ | 223,122 | ||||
| Non-cash items: | ||||||||
| Depreciation | 18,742 | 18,950 | ||||||
| Amortization | 71,794 | 52,289 | ||||||
| Stock-based compensation expense | 26,284 | 19,704 | ||||||
| Income taxes | (17,925 | ) | (18,615 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Receivables | (1,847 | ) | (12,565 | ) | ||||
| Inventory | (10,362 | ) | (5,452 | ) | ||||
| Accounts payable | 1,012 | (1,827 | ) | |||||
| Accrued liabilities | (10,103 | ) | (18,544 | ) | ||||
| Other, net | (2,855 | ) | 3,721 | |||||
| Cash provided by operating activities | 311,007 | 260,783 | ||||||
| Business acquisitions, net of cash acquired | (1,007,513 | ) | (36,872 | ) | ||||
| Capital expenditures | (21,889 | ) | (20,532 | ) | ||||
| Other, net | 1,314 | 544 | ||||||
| Cash used by investing activities | (1,028,088 | ) | (56,860 | ) | ||||
| Principal debt borrowings | 800,000 | - | ||||||
| Principal debt payments | (1,671 | ) | (13,215 | ) | ||||
| Revolver payments, net | (58,000 | ) | - | |||||
| Debt issuance costs | (7,517 | ) | - | |||||
| Dividends | (16,338 | ) | (26,673 | ) | ||||
| Excess tax benefit from share-based payment | 5,654 | 11,070 | ||||||
| Proceeds from stock-based compensation, net | 10,998 | 9,165 | ||||||
| Premium on convertible debt conversions | (4,040 | ) | - | |||||
| Other, net | 1,826 | 16 | ||||||
| Cash provided by/(used by) financing activities | 730,912 | (19,637 | ) | |||||
| Effect of exchange rate changes on cash | (9,850 | ) | (3,489 | ) | ||||
| Net increase in cash and equivalents | 3,981 | 180,797 | ||||||
| Cash and equivalents, beginning of period | 370,590 | 338,101 | ||||||
| Cash and equivalents, end of period | $ | 374,571 | $ | 518,898 | ||||
| ROPER INDUSTRIES INC. |
| CONDENSED CONSOLIDATED STATEMENT OF EARNINGS - RECONCILIATION OF GAAP TO NON-GAAP |
| (Amounts in thousands, except per share data) |
| Adjustments | ||||||||||||||||||||
2013 2nd Quarter | Sunquest Fair Value Adjustment | MHA Purchase AccountingAdjustment | Special Charge Related to | 2013 2nd Quarter | ||||||||||||||||
| Net Orders | $ | 816,511 | $ | - | $ | 18,540 | $ | - | $ | 835,051 | ||||||||||
| Net Sales | $ | 784,010 | $ | 2,380 | $ | 18,540 | $ | - | $ | 804,930 | ||||||||||
| Cost of Sales | 338,503 | - | - | - | 338,503 | |||||||||||||||
| Gross Profit | 445,507 | 2,380 | 18,540 | 466,427 | ||||||||||||||||
| Selling, general and administrative expenses | 245,027 | - | - | (9,100 | ) | 235,927 | ||||||||||||||
| Segment income from operations | 200,480 | 2,380 | 18,540 | 9,100 | 230,500 | |||||||||||||||
| Corporate general and administrative expenses | 20,734 | - | - | - | 20,734 | |||||||||||||||
| Income from operations | 179,746 | 2,380 | 18,540 | 9,100 | 209,766 | |||||||||||||||
| Interest Expense | 22,361 | - | - | - | 22,361 | |||||||||||||||
| Other income (expense) | 2,536 | - | - | - | 2,536 | |||||||||||||||
| Earnings from continuing operations before income taxes | 159,921 | 2,380 | 18,540 | 9,100 | 189,941 | |||||||||||||||
| IncomeTaxes (1) | 48,568 | 833 | 6,489 | 3,185 | 59,075 | |||||||||||||||
| Tax Rate | 30.4 | % | 35.0 | % | 35.0 | % | 35.0 | % | 31.1 | % | ||||||||||
| Net Earnings | $ | 111,353 | $ | 1,547 | $ | 12,051 | $ | 5,915 | $ | 130,866 | ||||||||||
| Weighted average common shares outstanding | 100,162 | 100,162 | ||||||||||||||||||
| Diluted earnings per share | $ | 1.11 | $ | 1.31 | ||||||||||||||||
| (1) For the adjustment, the company used a 35% tax rate, as these adjustments are US-based items and 35% is the statutory tax rate in the United States | ||||||||||||||||||||