UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

July 27, 2015

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

 

ROPER TECHNOLOGIES, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

DELAWARE

(STATE OR OTHER JURISDICTION OF INCORPORATION)

 

1-12273	51-0263969
(COMMISSION FILE NUMBER)	(IRS EMPLOYER IDENTIFICATION NO.)
6901 PROFESSIONAL PKWY. EAST, SUITE 200, SARASOTA, FLORIDA	34240
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)	(ZIP CODE)

 

(941) 556-2601

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

 

(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

GAAP DEPS Increased to $1.69; Adjusted DEPS Increased to $1.70

Operating Cash Flow Increased 23% to $173 Million

 

Sarasota, Florida, July 27, 2015 ... Roper Technologies, Inc. (NYSE: ROP) reported financial results for the second quarter ended June 30, 2015.

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 (DEPS) were $1.69, an 8% increase over the prior year and adjusted DEPS were $1.70, a 9% increase over last year.  GAAP revenue increased to $890 million and adjusted revenue increased 1% to $892 million.  GAAP operating profit increased to $252 million, representing 28.3% of revenue.  Adjusted operating profit increased to $254 million and adjusted operating margin increased 60 basis points to 28.5%.

GAAP gross margin increased 90 basis points to 60.0% and adjusted gross margin increased to 60.1%, a 100 basis point gain over the prior year.  Operating cash flow increased 23% to $173 million.  First half operating cash flow was a record $433 million, a 23% increase over the prior year.

"We were pleased with our performance in the second quarter," said Brian Jellison, Roper's Chairman, President and CEO.  "Continued growth in our Medical and RF Technology segments offset declines in energy-related markets.  Our businesses acted quickly, taking appropriate cost actions in light of more difficult market conditions.  EBITDA margin increased 60 basis points to 33.9%.  Revenue from acquisitions completed in the last year contributed 4% growth, more than offsetting a 3% decline due to foreign exchange.  Importantly, free cash flow was exceptional, as YTD free cash flow increased 24% to $412 million."

On July 20^th, the company completed the acquisition of On Center Software, Inc., headquartered in The Woodlands, Texas.  On Center Software is a leading provider of construction automation management solutions.  "We are pleased to welcome Cecilia Padilla, her leadership team and all the employees of On Center to the Roper family," said Mr. Jellison.  "With our record cash flow, a strong balance sheet and a full pipeline of opportunities, we expect to complete additional acquisitions in the year."

 

Roper expects full year diluted earnings per share to be $6.61 - $6.75 versus previous guidance of $6.75 - $6.95.  This reflects continued strength in the company's Medical and RF Technology segments and more difficult end market conditions in energy-related markets, particularly businesses serving upstream oil and gas customers.  The company expects third quarter diluted earnings per share to be $1.53 - $1.57.  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.

---

Table 1:  Q2 Revenue Growth Detail

Table 2:  Reconciliation of GAAP DEPS to Adjusted DEPS

 

Table 3:  Free Cash Flow Reconciliation

 

Table 4:  Adjusted Revenue and Adjusted Gross Margin Reconciliation

 

---

Table 5:  Adjusted Revenue and Adjusted Operating Margin Reconciliation

 

Table 6:  Adjusted Revenue and EBITDA Margin Reconciliation

A conference call to discuss these results has been scheduled for 8:30 AM ET on Monday, July 27, 2015.  The call can be accessed via webcast or by dialing +1 888-428-9490 (US/Canada) or +1 719-457-2083, using confirmation code 3782671.  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/866/9472.  Telephonic replays will be available for up to two weeks by calling +1 719-457-0820 and using the access code 3782671.

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 academic research 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.

# # #

 

 

---

Roper Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(Amounts in thousands)
		June 30,				December 31,
ASSETS		2015				2014
CURRENT ASSETS:
Cash and cash equivalents		$	678,571			$	610,430
Accounts receivable			481,599				511,538
Inventories			197,026				193,766
Unbilled receivable			107,999				96,409
Deferred taxes			58,194				54,199
Other current assets			63,893				45,763
Total current assets			1,587,282				1,512,105
PROPERTY, PLANT AND EQUIPMENT, NET			112,374				110,876
OTHER ASSETS:
Goodwill			5,111,662				4,710,691
Other intangible assets, net			2,108,964				1,978,729
Deferred taxes			34,599				27,496
Other assets			79,215				73,037
Total other assets			7,334,440				6,789,953
TOTAL ASSETS		$	9,034,096			$	8,412,934
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$	145,584			$	143,847
Accrued compensation			97,312				117,374
Deferred revenue			234,067				190,953
Other accrued liabilities			166,929				160,738
Deferred taxes			3,841				3,943
Current portion of long-term debt			7,208				11,092
Total current liabilities			654,941				627,947
NONCURRENT LIABILITIES:
Long-term debt			2,517,499				2,203,031
Deferred taxes			754,297				735,826
Other liabilities			88,010				90,770
Total liabilities			4,014,747				3,657,574
STOCKHOLDERS' EQUITY:
Common stock			1,026				1,021
Additional paid-in capital			1,368,335				1,325,338
Retained earnings			3,796,957				3,520,201
Accumulated other comprehensive earnings			(127,788	)			(71,927	)
Treasury stock			(19,181	)			(19,273	)
Total stockholders' equity			5,019,349				4,755,360
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	9,034,096			$	8,412,934

 

---

 

Roper Technologies, 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,
		2015				2014				2015				2014
Net sales		$	889,541			$	885,175			$	1,754,822			$	1,719,227
Cost of sales			355,630				361,993				702,750				707,109
Gross profit			533,911				523,182				1,052,072				1,012,118
Selling, general and administrative expenses			281,937				276,516				553,202				542,052
Income from operations			251,974				246,666				498,870				470,066
Interest expense			20,177				19,512				40,013				39,339
Other income/(expense)			(1,520	)			(930	)			(2,199	)			490
Earnings from continuing operations before
income taxes			230,277				226,224				456,658				431,217
Income taxes			58,997				68,863				129,605				126,630
Net Earnings		$	171,280			$	157,361			$	327,053			$	304,587
Earnings per share:
Basic		$	1.70			$	1.58			$	3.26			$	3.05
Diluted		$	1.69			$	1.56			$	3.22			$	3.02
Weighted average common and common
equivalent shares outstanding:
Basic			100,573				99,881				100,475				99,720
Diluted			101,569				100,823				101,468				100,696

 

---

Roper Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
		Six months ended
		June 30,
		2015				2014
Net earnings		$	327,053			$	304,587
Non-cash items:
Depreciation			19,417				20,089
Amortization			78,758				77,495
Stock-based compensation expense			29,438				30,013
Income taxes			(36,257	)			(42,664	)
Changes in assets and liabilities:
Receivables			29,688				(19,675	)
Inventory			(7,972	)			(6,515	)
Accounts payable			1,820				(2,871	)
Accrued liabilities			(5,443	)			(4,045	)
Other, net			(3,554	)			(3,284	)
Cash provided by operating activities			432,948				353,130
Business acquisitions, net of cash acquired			(589,727	)			(2,726	)
Capital expenditures			(20,673	)			(20,560	)
Other, net			(3,928	)			526
Cash used by investing activities			(614,328	)			(22,760	)
Principal debt payments,			(3,884	)			(561	)
Revolver borrowings/(payments), net			315,000				(220,000	)
Dividends			(50,099	)			(39,821	)
Excess tax benefit from share-based payment			8,781				12,058
Proceeds from stock-based compensation, net			15,315				21,686
Premium on convertible debt conversions			(12,721	)			(1,518	)
Other, net			849				1,811
Cash provided by/(used in) financing activities			273,241				(226,345	)
Effect of exchange rate changes on cash			(23,720	)			1,537
Net increase in cash and equivalents			68,141				105,562
Cash and equivalents, beginning of period			610,430				459,720
Cash and equivalents, end of period		$	678,571			$	565,282

 

---

Roper Technologies, 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,
		2015								2014								2015								2014
		Amount				%				Amount				%				Amount				%				Amount				%
Net sales:
Medical & Scientific Imaging		$	302,262							$	268,891							$	593,962							$	525,090
RF Technology			255,558								245,602								498,512								471,283
Industrial Technology			186,467								204,814								377,195								401,815
Energy Systems & Controls			145,254								165,868								285,153								321,039
Total		$	889,541							$	885,175							$	1,754,822							$	1,719,227
Gross profit:
Medical & Scientific Imaging		$	222,990				73.8	%		$	194,756				72.4	%		$	438,316				73.8	%		$	379,606				72.3	%
RF Technology			134,136				52.5	%			128,587				52.4	%			264,182				53.0	%			248,238				52.7	%
Industrial Technology			93,565				50.2	%			103,982				50.8	%			188,807				50.1	%			202,452				50.4	%
Energy Systems & Controls			83,220				57.3	%			95,857				57.8	%			160,767				56.4	%			181,822				56.6	%
Total		$	533,911				60.0	%		$	523,182				59.1	%		$	1,052,072				60.0	%		$	1,012,118				58.9	%
Operating profit*:
Medical & Scientific Imaging		$	109,261				36.1	%		$	94,381				35.1	%		$	217,040				36.5	%		$	184,152				35.1	%
RF Technology			79,940				31.3	%			71,272				29.0	%			153,917				30.9	%			133,832				28.4	%
Industrial Technology			52,188				28.0	%			60,438				29.5	%			110,085				29.2	%			116,494				29.0	%
Energy Systems & Controls			37,702				26.0	%			44,786				27.0	%			68,124				23.9	%			81,811				25.5	%
Total		$	279,091				31.4	%		$	270,877				30.6	%		$	549,166				31.3	%		$	516,289				30.0	%
Net Orders:
Medical & Scientific Imaging		$	306,637							$	271,800							$	582,433							$	528,140
RF Technology			252,322								235,828								505,449								470,173
Industrial Technology			181,845								200,248								370,585								405,129
Energy Systems & Controls			140,255								166,041								271,325								316,934
Total		$	881,059							$	873,917							$	1,729,792							$	1,720,376

 

  *  Operating profit is before unallocated corporate general and administrative expenses.  These expenses were $27,117 and $24,211 for the three months ended June 30, 2015 and 2014, respectively, and  $50,296 and $46,223 for the six months ended June 30, 2015 and 2014, respectively.