Roper Technologies Announces First Quarter Results
SARASOTA, Fla., April 25, 2016 /PRNewswire/ -- Roper Technologies, Inc. (NYSE: ROP) reported financial results for the first quarter ended March 31, 2016.
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.
First quarter GAAP revenue increased 4% to $902 million and adjusted revenue grew 4% to $906 million. GAAP diluted earnings per share (DEPS) were $1.48 and adjusted DEPS were $1.50. Orders increased 9% in the quarter and backlog increased 7% to a record $1.12 billion.
GAAP gross margin increased to 62.0% and adjusted gross margin increased 210 basis points to 62.1%. EBITDA increased 4% to $307 million. Operating cash flow was $207 million, which included tax payments associated with the gain on the divestiture of Abel Pump in the fourth quarter of 2015. Excluding these tax payments, adjusted operating cash flow was $245 million and adjusted free cash flow was $235 million, representing 26% of revenue.
"We are very pleased with our performance in the quarter," said Brian Jellison, Roper's Chairman, President and CEO. "Although energy markets were weak as expected, strong contributions from our software and medical products businesses resulted in record revenue for the quarter. Our businesses continued to generate strong margin performance, with gross margin expansion in all four segments. In addition, orders strengthened across the enterprise, with three segments recording a book-to-bill ratio of 1.03 or greater."
"During the quarter we completed the acquisition of Clinisys Group, Ltd., adding to our platform of software solutions for hospital laboratories," Mr. Jellison continued. "In addition, we acquired PCI Medical, a provider of disinfection systems that complement our Civco Medical Solutions business. Roper's pipeline of acquisition opportunities remains attractive and the Company expects to deploy over $1 billion in 2016."
2016 Guidance
Roper maintained its guidance for full year adjusted diluted earnings per share of $6.85 - $7.15. The Company expects second quarter adjusted diluted earnings per share to be $1.56 - $1.61. 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.
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Table 1: Revenue Growth Detail | |||
|
2016 |
2015 |
V% | |
|
Q1 GAAP Revenue |
$902.4 |
$865.3 |
4.3% |
|
Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
3.3 |
1.9 |
|
|
Q1 Adjusted Revenue |
$905.7 |
$867.2 |
4.4% |
|
Components of Adjusted Revenue Growth |
|||
|
Acquisitions |
9.6% | ||
|
Divestiture |
(1.0%) | ||
|
Organic |
(3.2%) | ||
|
Foreign Exchange |
(1.0%) | ||
|
Total Growth |
4.4% | ||
|
Table 2: Reconciliation of Q1 2016 GAAP DEPS to Adjusted DEPS | |
|
Q1 2016 | |
|
GAAP Diluted Earnings Per Share (DEPS) |
$ 1.48 |
|
Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
$ 0.02 |
|
Add: Acquisition-Related Inventory Step-up Charge |
$ 0.00 |
|
Adjusted DEPS |
$ 1.50 |
|
Table 3: Q1 2016 Adjusted Gross Margin Reconciliation | |||
|
2016 |
2015 |
V% / V Bps | |
|
Q1 GAAP Revenue |
$902.4 |
$865.3 |
|
|
Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
3.3 |
1.9 |
|
|
Q1 Adjusted Revenue |
$905.7 |
$867.2 |
|
|
Q1 GAAP Gross Profit |
$559.5 |
$518.2 |
|
|
Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
3.3 |
1.9 |
|
|
Add: Acquisition-Related Inventory Step-up Charge |
0.1 |
-- |
|
|
Adjusted Gross (B) |
562.9 |
520.1 |
|
|
GAAP Gross Margin |
62.0% |
59.9% |
+210 bps |
|
Adjusted Gross Margin (B) / (A) |
62.1% |
60.0% |
+210 bps |
|
Table 4: Q1 EBITDA Reconciliation | |||
|
2016 |
2015 |
V% | |
|
GAAP Net Earnings |
$151.4 |
$155.8 |
|
|
Add: Taxes |
66.0 |
70.6 |
|
|
Add: Amortization |
49.5 |
38.4 |
|
|
Add: Interest Expense |
27.4 |
19.8 |
|
|
Add: Depreciation |
9.7 |
9.9 |
|
|
Add: Purchase Accounting Adjustment to Acquired Deferred Revenue |
3.3 |
1.9 |
|
|
Add: Acquisition-Related Inventory Step-up Charge |
0.1 |
-- |
|
|
Rounding |
0.1 |
-- |
|
|
EBITDA |
307.5 |
296.4 |
+4% |
|
Table 5: Q1 Cash Flow Reconciliation | |
|
2016 | |
|
GAAP Operating Cash Flow |
$207.1 |
|
Add: Tax Related to 2015 Sale of Abel Pump |
37.4 |
|
Adjusted Operating Cash Flow |
$244.5 |
|
Less: Capital Expenditures |
(9.5) |
|
Adjusted Free Cash Flow |
$235.0 |
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, April 25, 2016. The call can be accessed via webcast or by dialing +1 888-430-8694 (US/Canada) or +1 719-325-2315, using confirmation code 8649870. 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/866/14512 . Telephonic replays will be available for up to two weeks and can be accessed by using the following registration URL https://jsp.premiereglobal.com/webrsvp/ with access code 8649870.
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.
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Roper Technologies, Inc. and Subsidiaries |
|||
|
Condensed Consolidated Balance Sheets (unaudited) |
|||
|
(Amounts in thousands) |
|||
|
March 31, |
December 31, | ||
|
ASSETS |
2016 |
2015 | |
|
CURRENT ASSETS: |
|||
|
Cash and cash equivalents |
$ 523,033 |
$ 778,511 | |
|
Accounts receivable |
514,616 |
488,271 | |
|
Inventories |
196,321 |
189,868 | |
|
Unbilled receivable |
120,746 |
122,042 | |
|
Other current assets |
77,616 |
39,355 | |
|
Total current assets |
1,432,332 |
1,618,047 | |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
106,212 |
105,510 | |
|
OTHER ASSETS: |
|||
|
Goodwill |
5,975,803 |
5,824,726 | |
|
Other intangible assets, net |
2,622,157 |
2,528,996 | |
|
Deferred taxes |
31,254 |
31,532 | |
|
Other assets |
56,650 |
59,554 | |
|
Total other assets |
8,685,864 |
8,444,808 | |
|
TOTAL ASSETS |
$ 10,224,408 |
$ 10,168,365 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
|
CURRENT LIABILITIES: |
|||
|
Accounts payable |
$ 140,421 |
$ 139,737 | |
|
Accrued compensation |
91,288 |
119,511 | |
|
Deferred revenue |
275,230 |
267,030 | |
|
Other accrued liabilities |
185,305 |
168,513 | |
|
Income taxes payable |
80,879 |
18,532 | |
|
Current portion of long-term debt |
6,365 |
6,805 | |
|
Total current liabilities |
779,488 |
720,128 | |
|
NONCURRENT LIABILITIES: |
|||
|
Long-term debt |
3,105,340 |
3,264,417 | |
|
Deferred taxes |
826,425 |
810,856 | |
|
Other liabilities |
71,920 |
74,017 | |
|
Total liabilities |
4,783,173 |
4,869,418 | |
|
STOCKHOLDERS' EQUITY: |
|||
|
Common stock |
1,031 |
1,028 | |
|
Additional paid-in capital |
1,438,695 |
1,419,262 | |
|
Retained earnings |
4,231,589 |
4,110,530 | |
|
Accumulated other comprehensive earnings |
(211,036) |
(212,779) | |
|
Treasury stock |
(19,044) |
(19,094) | |
|
Total stockholders' equity |
5,441,235 |
5,298,947 | |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 10,224,408 |
$ 10,168,365 | |
|
Roper Technologies, Inc. and Subsidiaries |
||||
|
Condensed Consolidated Statements of Earnings (unaudited) | ||||
|
(Amounts in thousands, except per share data) |
||||
|
Three months ended | ||||
|
March 31, | ||||
|
2016 |
2015 | |||
|
Net sales |
$ 902,423 |
$ 865,281 | ||
|
Cost of sales |
342,904 |
347,120 | ||
|
Gross profit |
559,519 |
518,161 | ||
|
Selling, general and administrative expenses |
314,528 |
271,265 | ||
|
Income from operations |
244,991 |
246,896 | ||
|
Interest expense |
27,413 |
19,836 | ||
|
Other expense |
(129) |
(679) | ||
|
Earnings from continuing operations before |
||||
|
income taxes |
217,449 |
226,381 | ||
|
Income taxes |
66,033 |
70,608 | ||
|
Net Earnings |
$ 151,416 |
$ 155,773 | ||
|
Earnings per share: |
||||
|
Basic |
$ 1.50 |
$ 1.55 | ||
|
Diluted |
$ 1.48 |
$ 1.54 | ||
|
Weighted average common and common |
||||
|
equivalent shares outstanding: |
||||
|
Basic |
101,071 |
100,377 | ||
|
Diluted |
102,318 |
101,361 | ||
|
Roper Technologies, Inc. and Subsidiaries |
||||||||
|
Selected Segment Financial Data (unaudited) |
||||||||
|
(Amounts in thousands and percents of net sales) |
||||||||
|
Three months ended March 31, | ||||||||
|
2016 |
2015 | |||||||
|
Amount |
% |
Amount |
% | |||||
|
Net sales: |
||||||||
|
Medical & Scientific Imaging |
$ 332,214 |
$ 291,700 |
||||||
|
RF Technology |
280,210 |
242,954 |
||||||
|
Industrial Technology |
171,235 |
190,728 |
||||||
|
Energy Systems & Controls |
118,764 |
139,899 |
||||||
|
Total |
$ 902,423 |
$ 865,281 |
||||||
|
Gross profit: |
||||||||
|
Medical & Scientific Imaging |
$ 246,897 |
74.3% |
$ 215,326 |
73.8% | ||||
|
RF Technology |
160,365 |
57.2% |
130,046 |
53.5% | ||||
|
Industrial Technology |
86,020 |
50.2% |
95,242 |
49.9% | ||||
|
Energy Systems & Controls |
66,237 |
55.8% |
77,547 |
55.4% | ||||
|
Total |
$ 559,519 |
62.0% |
$ 518,161 |
59.9% | ||||
|
Operating profit*: |
||||||||
|
Medical & Scientific Imaging |
$ 114,456 |
34.5% |
$ 107,779 |
36.9% | ||||
|
RF Technology |
88,766 |
31.7% |
73,977 |
30.4% | ||||
|
Industrial Technology |
46,759 |
27.3% |
57,897 |
30.4% | ||||
|
Energy Systems & Controls |
24,182 |
20.4% |
30,422 |
21.7% | ||||
|
Total |
$ 274,163 |
30.4% |
$ 270,075 |
31.2% | ||||
|
Net Orders: |
||||||||
|
Medical & Scientific Imaging |
$ 343,850 |
$ 275,796 |
||||||
|
RF Technology |
281,125 |
253,127 |
||||||
|
Industrial Technology |
178,905 |
188,740 |
||||||
|
Energy Systems & Controls |
122,770 |
131,070 |
||||||
|
Total |
$ 926,650 |
$ 848,733 |
||||||
|
* Operating profit is before unallocated corporate general and administrative expenses. These expenses | ||||||||
|
were $29,172 and $23,179 for the three months ended March 31, 2016 and 2015, respectively. |
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|
Roper Technologies, Inc. and Subsidiaries |
||||
|
Condensed Consolidated Statements of Cash Flows (unaudited) | ||||
|
(Amounts in thousands) |
||||
|
Three months ended | ||||
|
March 31, | ||||
|
2016 |
2015 | |||
|
Net earnings |
$ 151,416 |
$ 155,773 | ||
|
Non-cash items: |
||||
|
Depreciation |
9,702 |
9,880 | ||
|
Amortization |
49,549 |
38,428 | ||
|
Stock-based compensation expense |
18,979 |
13,801 | ||
|
Income taxes |
20,127 |
38,837 | ||
|
Changes in assets and liabilities: |
||||
|
Receivables |
(14,059) |
9,262 | ||
|
Inventory |
(3,907) |
(7,680) | ||
|
Accounts payable |
(1,273) |
7,078 | ||
|
Accrued liabilities |
(18,458) |
1,627 | ||
|
Other, net |
(5,004) |
(6,607) | ||
|
Cash provided by operating activities |
207,072 |
260,399 | ||
|
Business acquisitions, net of cash acquired |
(265,248) |
(589,577) | ||
|
Capital expenditures |
(9,489) |
(9,950) | ||
|
Other, net |
781 |
(3,596) | ||
|
Cash used in investing activities |
(273,956) |
(603,123) | ||
|
Principal debt payments |
(289) |
(3,454) | ||
|
Revolver borrowings/(payments), net |
(160,000) |
415,000 | ||
|
Dividends |
(30,173) |
(25,024) | ||
|
Excess tax benefit from share-based payment* |
- |
4,093 | ||
|
Proceeds from stock-based compensation, net |
690 |
6,267 | ||
|
Premium on convertible debt conversions |
(915) |
(11,236) | ||
|
Other, net |
505 |
498 | ||
|
Cash provided by/(used in) financing activities |
(190,182) |
386,144 | ||
|
Effect of exchange rate changes on cash |
1,588 |
(38,357) | ||
|
Net increase/(decrease) in cash and equivalents |
(255,478) |
5,063 | ||
|
Cash and equivalents, beginning of period |
778,511 |
610,430 | ||
|
Cash and equivalents, end of period |
523,033 |
$615,493 | ||
|
*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.