Exhibit 99.1
Contact Information: Investor Relations 941-556-2601 investor-relations@roperind.com |  Roper Industries, Inc. |
Roper Industries Announces Record Results for Fourth Quarter and Full Year 2013
Fourth-Quarter Diluted Earnings Per Share of $1.65
Full-Year Operating Cash Flow Increased 18% to $803 million
Sarasota, Florida, January 27, 2014 ... Roper Industries, Inc. (NYSE: ROP), a diversified growth company, reported financial results for the fourth quarter and full year ended December 31, 2013.
Roper reports full year results, including revenue, operating margin, net income and diluted earnings per share, on a GAAP and adjusted basis. Fourth quarter results are presented on a GAAP basis with no adjustments. Adjusted measures are reconciled to the corresponding GAAP measures at the end of this release.
Fourth Quarter 2013
Net earnings for the fourth quarter were $166 million or $1.65 per diluted share. Fourth quarter revenue was $889 million, 10% higher than in 2012 and 9% higher than 2012 fourth quarter adjusted revenue of $816 million. Orders increased 16% to $900 million, including 10% organic growth. Operating margin expanded to 29.0%. Operating cash flow in the quarter was $236 million, representing 27% of revenue.
"We are very pleased with our fourth-quarter performance, with record orders, revenue, margin and cash flow," said Brian Jellison, Roper's Chairman, President and CEO. "Gross margin in the quarter was 60.0% and EBITDA reached $307 million, or 34.5% of revenue. Our asset-light businesses in favorable niche markets continue to deliver exceptional results. Free cash flow in the quarter was $227 million, which represented 137% of net earnings."
Full Year 2013
2013 GAAP diluted earnings per share were $5.37 and adjusted diluted earnings per share were $5.65. GAAP revenue was $3.24 billion, an increase of 8% over the prior year, while adjusted revenue was $3.27 billion, an increase of 9%. GAAP operating margin increased 70 basis points to 26.0% and adjusted operating margin was 27.0%, a 130 basis point increase over the prior year.
"2013 was another outstanding year for Roper as we once again achieved record results for sales, orders, backlog, net earnings and cash flow." said Mr. Jellison. "We delivered $803 million of operating cash flow for the year and $760 million of free cash flow. In May, we acquired Managed Health Care Associates (MHA), which has already proven to be an exciting new growth platform. We ended the year with a strong balance sheet, including over $1.6 billion in cash and available liquidity."
2014 Outlook and Guidance
The company's guidance for 2014 is provided on a GAAP basis and excludes future acquisitions.
Roper expects 2014 full year diluted earnings per share (DEPS) between $6.05 and $6.25 with expected first quarter DEPS between $1.30 and $1.35. "We enter 2014 with record year-end backlog, exciting growth opportunities and an expectation for record performance," said Mr. Jellison.
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 2012 | Q4 2013 | V% | |||
| GAAP Revenue | $810 | $889 | 10% | ||
| Adjusted Revenue | $816 | $889 | 9% | ||
| Adjusted Revenue Growth: | |||||
| Organic Growth | 4% | ||||
| Acquisitions | 5% | ||||
| Foreign Exchange | -- | ||||
| Total Growth | 9% | ||||
Table 2: Free Cash Flow Reconciliation
| Q4 2013 | FY 2013 | ||
| Operating Cash Flow | 236 | 803 | |
| Less: Capital Expenditures | (9) | (43) | |
| Free Cash Flow | 227 | 760 | |
Table 3: EBITDA Reconciliation
| Q4 2013 | |
| Revenue (B) | $889.2 |
| Net Earnings | 165.7 |
| Add: Interest Expense | 20.1 |
| Add: Income Taxes | 71.6 |
| Add: Depreciation & Amortization | 49.7 |
| EBITDA (A) | $307.1 |
| % of Revenue (A) / (B) | 34.5% |
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 27, 2014. The call can be accessed via webcast or by dialing +1 888-417-8465 (US/Canada) or +1 719-325-2432, using confirmation code 6035185. 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 6035185.
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, 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 | 2013 | 2012 | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 459,720 | $ | 370,590 | ||||
| Accounts receivable | 519,075 | 526,408 | ||||||
| Inventories | 204,923 | 190,867 | ||||||
| Unbilled receivable | 86,945 | 72,193 | ||||||
| Deferred taxes | 64,464 | 41,992 | ||||||
| Other current assets | 38,210 | 43,492 | ||||||
| Total current assets | 1,373,337 | 1,245,542 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 117,310 | 110,397 | ||||||
| OTHER ASSETS: | ||||||||
| Goodwill | 4,549,998 | 3,868,857 | ||||||
| Other intangible assets, net | 2,039,136 | 1,698,867 | ||||||
| Deferred taxes | 28,773 | 78,644 | ||||||
| Other assets | 76,427 | 68,797 | ||||||
| Total other assets | 6,694,334 | 5,715,165 | ||||||
| TOTAL ASSETS | $ | 8,184,981 | $ | 7,071,104 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 150,313 | $ | 138,340 | ||||
| Accrued compensation | 107,953 | 110,724 | ||||||
| Deferred revenue | 209,332 | 185,912 | ||||||
| Other accrued liabilities | 153,712 | 128,351 | ||||||
| Income taxes payable | 4,275 | - | ||||||
| Deferred taxes | 6,490 | 3,868 | ||||||
| Current portion of long-term debt | 11,016 | 519,015 | ||||||
| Total current liabilities | 643,091 | 1,086,210 | ||||||
| NONCURRENT LIABILITIES: | ||||||||
| Long-term debt | 2,453,836 | 1,503,107 | ||||||
| Deferred taxes | 783,805 | 707,278 | ||||||
| Other liabilities | 91,199 | 86,783 | ||||||
| Total liabilities | 3,971,931 | 3,383,378 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock | 1,013 | 1,006 | ||||||
| Additional paid-in capital | 1,229,233 | 1,158,001 | ||||||
| Retained earnings | 2,959,196 | 2,489,858 | ||||||
| Accumulated other comprehensive earnings | 43,083 | 58,537 | ||||||
| Treasury stock | (19,475 | ) | (19,676 | ) | ||||
| Total stockholders' equity | 4,213,050 | 3,687,726 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 8,184,981 | $ | 7,071,104 | ||||
| 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, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net sales | $ | 889,173 | $ | 809,910 | $ | 3,238,128 | $ | 2,993,489 | ||||||||
| Cost of sales | 355,953 | 343,549 | 1,355,200 | 1,321,772 | ||||||||||||
| Gross profit | 533,220 | 466,361 | 1,882,928 | 1,671,717 | ||||||||||||
| Selling, general and administrative expenses | 275,131 | 241,119 | 1,040,567 | 914,130 | ||||||||||||
| Income from operations | 258,089 | 225,242 | 842,361 | 757,587 | ||||||||||||
| Interest expense | 20,115 | 20,509 | 88,039 | 67,525 | ||||||||||||
| Loss on extinguishment of debt | - | - | - | (1,043 | ) | |||||||||||
| Other income/(expense) | (645 | ) | 106 | (192 | ) | (2,338 | ) | |||||||||
| Earnings from continuing operations before | ||||||||||||||||
| income taxes | 237,329 | 204,839 | 754,130 | 686,681 | ||||||||||||
| Income taxes | 71,626 | 61,309 | 215,837 | 203,321 | ||||||||||||
| Net Earnings | $ | 165,703 | $ | 143,530 | $ | 538,293 | $ | 483,360 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 1.67 | $ | 1.46 | $ | 5.43 | $ | 4.95 | ||||||||
| Diluted | $ | 1.65 | $ | 1.44 | $ | 5.37 | $ | 4.86 | ||||||||
| Weighted average common and common | ||||||||||||||||
| equivalent shares outstanding: | ||||||||||||||||
| Basic | 99,315 | 98,422 | 99,123 | 97,702 | ||||||||||||
| Diluted | 100,380 | 99,576 | 100,209 | 99,558 | ||||||||||||
| 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, | |||||||||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||||||||||||||||||||||||
| Net sales: | ||||||||||||||||||||||||||||||||
| Industrial Technology | $ | 199,098 | $ | 197,152 | $ | 779,564 | $ | 795,240 | ||||||||||||||||||||||||
| Energy Systems & Controls | 195,889 | 184,608 | 651,920 | 646,116 | ||||||||||||||||||||||||||||
| Medical & Scientific Imaging | 256,542 | 217,628 | 902,281 | 703,835 | ||||||||||||||||||||||||||||
| RF Technology | 237,644 | 210,522 | 904,363 | 848,298 | ||||||||||||||||||||||||||||
| Total | $ | 889,173 | $ | 809,910 | $ | 3,238,128 | $ | 2,993,489 | ||||||||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||||||||||||
Industrial Technology(1) | $ | 101,873 | 51.2 | % | $ | 106,178 | 53.9 | % | $ | 398,287 | 51.1 | % | $ | 410,180 | 51.6 | % | ||||||||||||||||
| Energy Systems & Controls | 117,778 | 60.1 | % | 109,291 | 59.2 | % | 374,209 | 57.4 | % | 363,616 | 56.3 | % | ||||||||||||||||||||
Medical & Scientific Imaging(2) | 184,272 | 71.8 | % | 139,084 | 63.9 | % | 624,990 | 69.3 | % | 453,495 | 64.4 | % | ||||||||||||||||||||
| RF Technology | 129,297 | 54.4 | % | 111,808 | 53.1 | % | 485,442 | 53.7 | % | 444,426 | 52.4 | % | ||||||||||||||||||||
| Total | $ | 533,220 | 60.0 | % | $ | 466,361 | 57.6 | % | $ | 1,882,928 | 58.1 | % | $ | 1,671,717 | 55.8 | % | ||||||||||||||||
| Operating profit*: | ||||||||||||||||||||||||||||||||
Industrial Technology(1) | $ | 58,775 | 29.5 | % | $ | 64,480 | 32.7 | % | $ | 223,053 | 28.6 | % | $ | 244,691 | 30.8 | % | ||||||||||||||||
| Energy Systems & Controls | 65,247 | 33.3 | % | 61,075 | 33.1 | % | 183,679 | 28.2 | % | 179,824 | 27.8 | % | ||||||||||||||||||||
Medical & Scientific Imaging(2) | 88,739 | 34.6 | % | 62,015 | 28.5 | % | 268,172 | 29.7 | % | 187,246 | 26.6 | % | ||||||||||||||||||||
| RF Technology | 69,704 | 29.3 | % | 56,819 | 27.0 | % | 253,532 | 28.0 | % | 223,335 | 26.3 | % | ||||||||||||||||||||
| Total | $ | 282,465 | 31.8 | % | $ | 244,389 | 30.2 | % | $ | 928,436 | 28.7 | % | $ | 835,096 | 27.9 | % | ||||||||||||||||
| Net Orders: | ||||||||||||||||||||||||||||||||
| Industrial Technology | $ | 190,475 | $ | 185,285 | $ | 772,337 | $ | 783,362 | ||||||||||||||||||||||||
| Energy Systems & Controls | 207,155 | 175,596 | 673,569 | 634,051 | ||||||||||||||||||||||||||||
| Medical & Scientific Imaging | 270,157 | 208,784 | 958,830 | 703,034 | ||||||||||||||||||||||||||||
| RF Technology | 232,338 | 209,399 | 943,757 | 871,225 | ||||||||||||||||||||||||||||
| Total | $ | 900,125 | $ | 779,064 | $ | 3,348,493 | $ | 2,991,672 | ||||||||||||||||||||||||
| * Operating profit is before unallocated corporate general and administrative expenses. These expenses were $24,376 and $19,147 for the three months ended December 31, 2013 and 2012, respectively, and $86,075 and $77,509 for the twelve months ended December 31, 2013 and 2012, 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, | ||||||||
| 2013 | 2012 | |||||||
| Net earnings | $ | 538,293 | $ | 483,360 | ||||
| Non-cash items: | ||||||||
| Depreciation | 37,756 | 37,888 | ||||||
| Amortization | 151,434 | 116,860 | ||||||
| Stock-based compensation expense | 53,133 | 40,773 | ||||||
| Income taxes | (6,427 | ) | (15,988 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Receivables | 18,046 | (21,577 | ) | |||||
| Inventory | (12,687 | ) | 18,361 | |||||
| Accounts payable | 9,014 | (8,480 | ) | |||||
| Accrued liabilities | 14,291 | 17,689 | ||||||
| Other, net | (300 | ) | 8,966 | |||||
| Cash provided by operating activities | 802,553 | 677,852 | ||||||
| Business acquisitions, net of cash acquired | (1,074,413 | ) | (1,467,772 | ) | ||||
| Capital expenditures | (42,528 | ) | (38,405 | ) | ||||
| Other, net | 1,078 | 632 | ||||||
| Cash used by investing activities | (1,115,863 | ) | (1,505,545 | ) | ||||
| Principal debt borrowings | 800,000 | 900,000 | ||||||
| Principal debt payments | (503,702 | ) | (57,304 | ) | ||||
| Revolver borrowings (payments), net | 150,000 | 100,000 | ||||||
| Debt issuance costs | (7,717 | ) | (12,213 | ) | ||||
| Dividends | (49,092 | ) | (69,903 | ) | ||||
| Excess tax benefit from share-based payment | 11,709 | 30,747 | ||||||
| Proceeds from stock-based compensation, net | 7,944 | 37,679 | ||||||
| Redemption premium on convertible debt | (9,124 | ) | (76,641 | ) | ||||
| Other, net | 3,615 | 1,505 | ||||||
| Cash provided by (used in) financing activities | 403,633 | 853,870 | ||||||
| Effect of exchange rate changes on cash | (1,193 | ) | 6,312 | |||||
| Net increase in cash and equivalents | 89,130 | 32,489 | ||||||
| Cash and equivalents, beginning of period | 370,590 | 338,101 | ||||||
| Cash and equivalents, end of period | $ | 459,720 | $ | 370,590 | ||||
| ROPER INDUSTRIES INC. |
| CONDENSED CONSOLIDATED STATEMENT OF EARNINGS - RECONCILIATION OF GAAP TO NON-GAAP (Adjusted) |
| (Amounts in thousands, except per share data) |
| Adjustments | ||||||||||||||||||||
2013 Year-To-Date | Sunquest Fair Value Adjustment | MHA Purchase Accounting | Special Charge Related to | 2013 Year-To-Date | ||||||||||||||||
| Net Orders | $ | 3,348,493 | $ | - | $ | 26,433 | $ | - | $ | 3,374,926 | ||||||||||
| Net Sales | $ | 3,238,128 | $ | 6,980 | $ | 26,433 | $ | - | $ | 3,271,541 | ||||||||||
| Cost of Sales | 1,355,200 | - | - | 1,355,200 | ||||||||||||||||
| Gross Profit | 1,882,928 | 6,980 | 26,433 | 1,916,341 | ||||||||||||||||
| Selling, general and administrative expenses | 954,492 | - | - | (9,100 | ) | 945,392 | ||||||||||||||
| Segment income from operations | 928,436 | 6,980 | 26,433 | 9,100 | 970,949 | |||||||||||||||
| Corporate general and administrative expenses | 86,075 | - | - | - | 86,075 | |||||||||||||||
| Income from operations | 842,361 | 6,980 | 26,433 | 9,100 | 884,874 | |||||||||||||||
| Interest Expense | 88,039 | - | - | - | 88,039 | |||||||||||||||
| Other income (expense) | (192 | ) | - | - | - | (192 | ) | |||||||||||||
| Earnings from continuing operations before income taxes | 754,130 | 6,980 | 26,433 | 9,100 | 796,643 | |||||||||||||||
| IncomeTaxes (1) | 215,837 | 2,443 | 9,252 | 3,185 | 230,717 | |||||||||||||||
| Tax Rate | 28.6 | % | 35.0 | % | 35.0 | % | 35.0 | % | 29.0 | % | ||||||||||
| Net Earnings | $ | 538,293 | $ | 4,537 | $ | 17,181 | $ | 5,915 | $ | 565,926 | ||||||||||
| Weighted average common shares outstanding | 100,209 | 100,209 | ||||||||||||||||||
| Diluted earnings per share | $ | 5.37 | $ | 5.65 | ||||||||||||||||
(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