Attached files
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| 8-K - ROPER TECHNOLOGIES INC | cover8k.htm |
Exhibit 99.1
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Contact Information:
Investor Relations
941-556-2601
investor-relations@roperind.com
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 Roper Industries, Inc.
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Roper Industries Announces Second Quarter Results
Record Second Quarter Orders, Revenue, Net Earnings and EBITDA
Orders Increase 8% to $763 Million
$1.4 Billion Acquisition Announced; Guidance Raised
Sarasota, Florida, July 30, 2012 ... Roper Industries, Inc. (NYSE: ROP) reported financial results for the second quarter ended June 30, 2012.
Net earnings for the second quarter were $115 million, an 8% increase over the second quarter of 2011 and excluding a foreign currency remeasurement gain on intercompany debt in the prior year, net earnings were up 13%. Diluted earnings per share were $1.15. Revenue increased 4% to $725 million. Orders grew 8% to $763 million and represented a book-to-bill ratio of 1.05.
Operating income increased to $179 million and operating margin was 24.7%, a 130 basis point increase over the prior year. Operating cash flow was $119 million, bringing first half operating cash flow to $261 million. EBITDA for the first half reached $419 million, with second quarter EBITDA of $214 million. Second quarter EBITDA margin was 29.5%.
“We are pleased with the performance of our businesses in the second quarter,” said Brian Jellison, Roper’s Chairman, President and CEO. “We achieved record second quarter revenue and earnings, as our businesses continued to execute well in the current uncertain economic environment. Organic growth was consistent with our expectations in the quarter, and our focus on breakeven ratios, cost discipline and operating leverage resulted in exceptional margin performance.”
New Credit Facility
On July 27, 2012, Roper entered into a new $1.5 billion senior unsecured five-year revolving credit facility, which replaced the company’s previous senior unsecured five-year credit facility, dated July 7, 2008. The new credit facility doubles the amount of revolving credit available to the company.
Acquisition of Sunquest
Separately, Roper announced today that it has signed an agreement to acquire Sunquest Information Systems, Inc. in an all-cash transaction valued at $1.415 billion, including approximately $25 million in cash tax benefits. Headquartered in Tucson, Arizona, Sunquest provides a comprehensive suite of clinical and anatomic laboratory software solutions. Sunquest’s software solutions are used by more than 1,700 hospitals worldwide. Hospital laboratories, which provide information that drives the majority of diagnostic decisions, rely on Sunquest software solutions to integrate vital data and improve workflow. Sunquest also provides a growing suite of software solutions beyond the hospital laboratory with a focus on point-of-care patient safety and physician outreach.
“We continue to transform the enterprise with the addition of Sunquest,” said Mr. Jellison. “Sunquest meets all of our key acquisition criteria and is an ideal fit with both our Medical and Software platforms. The company has attractive cash return characteristics and generates significant recurring revenue through long term customer relationships and high retention rates.” Roper expects the addition of Sunquest to deliver $140 million or more of EBITDA in 2013, excluding the impact of fair value accounting on Sunquest’s deferred revenue.
2012 Outlook and Guidance
Roper is increasing its full year adjusted diluted earnings per share guidance to $4.84 - $5.00 from $4.75 - $4.91, reflecting a ($0.04) reduction due to currency and $0.12 - $0.14 accretion from the acquisition of Sunquest. The company’s guidance excludes acquisition-related expenses, debt extinguishment charges and the impact of any future acquisitions. The company’s guidance includes the recognition of Sunquest’s deferred revenue, a portion of which will be excluded under GAAP’s purchase accounting rules which will require the deferred revenue to be reduced to fair value upon the acquisition.
Use of Non-GAAP Financial Information
In order to provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, the company supplements its consolidated financial statements presented on a GAAP basis with certain non-GAAP financial information. Reconciliation of non-GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial schedules or tables. The company’s adjusted diluted earnings per share guidance is a non-GAAP measure which includes the impact of Sunquest’s deferred revenue, a portion of which will be excluded under GAAP’s purchase accounting rules, which require the deferred revenue to be reduced to fair value upon the acquisition. The company is not currently able to estimate the impact of the required fair value adjustment.
Table 1: Q2 Revenue and Orders Growth
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Revenue
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Orders
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Organic Growth
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3%
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7%
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Acquisitions
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3%
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3%
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Foreign Currency
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(2%)
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(2%)
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Total Growth
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4%
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8%
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Table 2: EBITDA and EBITDA Margin
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Q2 2012
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Q1 2012
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1H 2012
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Net Earnings
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$114.8
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$108.3
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$223.1
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Add: Interest Expense
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15.1
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15.5
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30.6
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Add: Income Taxes
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48.3
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46.0
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94.3
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Add: Depreciation & Amortization
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35.8
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35.5
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71.3
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EBITDA (A)
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$214.0
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$205.3
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$419.3
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Revenue (B)
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$724.9
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||
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EBITDA Margin (A)/(B)
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29.5%
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Table 3: Adjusted Net Earnings
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Q2 2012
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Q2 2011
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V%
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Net Earnings
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$114.8
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106.3
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8%
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Less: Remeasurement Gain, net of tax
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-
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(4.7)
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Adjusted Net Earnings
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114.8
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101.6
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13%
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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 30, 2012. The call can be accessed via webcast or by dialing +1 888-811-5456 (US/Canada) or +1 913-312-0706, using confirmation code 4480339. 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 4480339.
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 close the Sunquest acquisition, 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)
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June 30,
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December 31,
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|||||||
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2012
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2011
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|||||||
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ASSETS
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||||||||
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CURRENT ASSETS:
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||||||||
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Cash and cash equivalents
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$ | 518,898 | $ | 338,101 | ||||
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Accounts receivable, net
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439,184 | 439,134 | ||||||
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Inventories, net
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209,626 | 204,758 | ||||||
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Unbilled receivable
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74,011 | 63,829 | ||||||
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Deferred taxes
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40,335 | 38,004 | ||||||
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Other current assets
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43,323 | 31,647 | ||||||
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Total current assets
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1,325,377 | 1,115,473 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, NET
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108,089 | 108,775 | ||||||
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||||||||
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OTHER ASSETS:
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||||||||
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Goodwill
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2,873,361 | 2,866,426 | ||||||
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Other intangible assets, net
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1,065,124 | 1,094,142 | ||||||
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Deferred taxes
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61,419 | 63,006 | ||||||
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Other assets
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68,811 | 71,595 | ||||||
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Total other assets
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4,068,715 | 4,095,169 | ||||||
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TOTAL ASSETS
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$ | 5,502,181 | $ | 5,319,417 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
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Accounts payable
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$ | 139,379 | $ | 141,943 | ||||
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Accrued liabilities
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306,945 | 322,904 | ||||||
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Income taxes payable
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- | 8,895 | ||||||
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Deferred taxes
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8,862 | 10,548 | ||||||
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Current portion of long-term debt
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57,424 | 69,906 | ||||||
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Total current liabilities
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512,610 | 554,196 | ||||||
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NONCURRENT LIABILITIES:
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Long-term debt
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1,011,817 | 1,015,110 | ||||||
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Deferred taxes
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483,652 | 482,603 | ||||||
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Other liabilities
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80,091 | 72,412 | ||||||
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Total liabilities
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2,088,170 | 2,124,321 | ||||||
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STOCKHOLDERS' EQUITY:
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||||||||
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Common stock
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996 | 987 | ||||||
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Additional paid-in capital
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1,153,620 | 1,117,093 | ||||||
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Retained earnings
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2,259,422 | 2,063,110 | ||||||
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Accumulated other comprehensive earnings
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19,753 | 33,800 | ||||||
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Treasury stock
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(19,780 | ) | (19,894 | ) | ||||
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Total stockholders' equity
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3,414,011 | 3,195,096 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 5,502,181 | $ | 5,319,417 | ||||
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)
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Three months ended
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Six months ended
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|||||||||||||||
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June 30,
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June 30,
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2012
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2011
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2012
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2011
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Net sales
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$ | 724,872 | $ | 699,871 | $ | 1,435,938 | $ | 1,345,180 | ||||||||
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Cost of sales
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327,264 | 322,808 | 647,137 | 618,021 | ||||||||||||
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Gross profit
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397,608 | 377,063 | 788,801 | 727,159 | ||||||||||||
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Selling, general and administrative expenses
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218,824 | 213,093 | 439,713 | 421,189 | ||||||||||||
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Income from operations
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178,784 | 163,970 | 349,088 | 305,970 | ||||||||||||
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Interest expense
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15,077 | 16,196 | 30,560 | 32,892 | ||||||||||||
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Other income/(expense)
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(574 | ) | 7,243 | (1,064 | ) | 7,954 | ||||||||||
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Earnings from continuing operations before
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||||||||||||||||
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income taxes
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163,133 | 155,017 | 317,464 | 281,032 | ||||||||||||
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Income taxes
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48,320 | 48,706 | 94,342 | 85,742 | ||||||||||||
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Net Earnings
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$ | 114,813 | $ | 106,311 | $ | 223,122 | $ | 195,290 | ||||||||
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Earnings per share:
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||||||||||||||||
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Basic
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$ | 1.18 | $ | 1.11 | $ | 2.29 | $ | 2.04 | ||||||||
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Diluted
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$ | 1.15 | $ | 1.08 | $ | 2.24 | $ | 1.99 | ||||||||
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Weighted average common and common
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||||||||||||||||
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equivalent shares outstanding:
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||||||||||||||||
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Basic
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97,460 | 95,911 | 97,249 | 95,644 | ||||||||||||
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Diluted
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99,619 | 98,412 | 99,500 | 98,282 | ||||||||||||
Roper Industries, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
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Three months ended June 30,
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Six months ended June 30,
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2012
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2011
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2012
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2011
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|||||||||||||||||||||||||||||
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Amount
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%
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Amount
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%
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Amount
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%
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Amount
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%
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|||||||||||||||||||||||||
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Net sales:
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||||||||||||||||||||||||||||||||
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Industrial Technology
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$ | 203,944 |
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$ | 183,455 |
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$ | 399,080 |
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$ | 353,437 |
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||||||||||||||||||||
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Energy Systems & Controls
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154,737 | 145,750 | 303,339 | 275,383 | ||||||||||||||||||||||||||||
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Medical & Scientific Imaging
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150,921 | 151,078 | 313,732 | 296,365 | ||||||||||||||||||||||||||||
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RF Technology
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215,270 | 219,588 | 419,787 | 419,995 | ||||||||||||||||||||||||||||
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Total
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$ | 724,872 | $ | 699,871 | $ | 1,435,938 | $ | 1,345,180 | ||||||||||||||||||||||||
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Gross profit:
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||||||||||||||||||||||||||||||||
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Industrial Technology
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$ | 102,770 | 50.4 | % | $ | 92,068 | 50.2 | % | $ | 201,433 | 50.5 | % | $ | 177,782 | 50.3 | % | ||||||||||||||||
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Energy Systems & Controls
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86,135 | 55.7 | % | 80,412 | 55.2 | % | 166,543 | 54.9 | % | 150,558 | 54.7 | % | ||||||||||||||||||||
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Medical & Scientific Imaging
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96,212 | 63.7 | % | 95,006 | 62.9 | % | 202,398 | 64.5 | % | 186,260 | 62.8 | % | ||||||||||||||||||||
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RF Technology
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112,491 | 52.3 | % | 109,577 | 49.9 | % | 218,427 | 52.0 | % | 212,559 | 50.6 | % | ||||||||||||||||||||
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Total
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$ | 397,608 | 54.9 | % | $ | 377,063 | 53.9 | % | $ | 788,801 | 54.9 | % | $ | 727,159 | 54.1 | % | ||||||||||||||||
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Operating profit*:
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Industrial Technology
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$ | 62,076 | 30.4 | % | $ | 51,729 | 28.2 | % | $ | 119,583 | 30.0 | % | $ | 97,918 | 27.7 | % | ||||||||||||||||
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Energy Systems & Controls
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40,202 | 26.0 | % | 37,704 | 25.9 | % | 75,859 | 25.0 | % | 66,748 | 24.2 | % | ||||||||||||||||||||
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Medical & Scientific Imaging
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35,679 | 23.6 | % | 35,352 | 23.4 | % | 79,041 | 25.2 | % | 70,389 | 23.8 | % | ||||||||||||||||||||
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RF Technology
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58,161 | 27.0 | % | 52,911 | 24.1 | % | 108,514 | 25.8 | % | 97,861 | 23.3 | % | ||||||||||||||||||||
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Total
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$ | 196,118 | 27.1 | % | $ | 177,696 | 25.4 | % | $ | 382,997 | 26.7 | % | $ | 332,916 | 24.7 | % | ||||||||||||||||
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Net Orders:
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||||||||||||||||||||||||||||||||
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Industrial Technology
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$ | 202,120 | $ | 189,322 | $ | 406,122 | $ | 390,064 | ||||||||||||||||||||||||
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Energy Systems & Controls
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157,775 | 151,134 | 311,151 | 285,339 | ||||||||||||||||||||||||||||
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Medical & Scientific Imaging
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148,386 | 150,047 | 316,722 | 300,312 | ||||||||||||||||||||||||||||
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RF Technology
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255,195 | 217,182 | 458,867 | 434,269 | ||||||||||||||||||||||||||||
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Total
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$ | 763,476 | $ | 707,685 | $ | 1,492,862 | $ | 1,409,984 | ||||||||||||||||||||||||
* Operating profit is before unallocated corporate general and administrative expenses. These expenses
were $17,334 and $13,726 for the three months ended June 30, 2012 and 2011, respectively and
$33,909 and $26,946 for the six months ended June 30, 2012 and 2011, respectively.
Roper Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
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Six months ended
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||||||||
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June 30,
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2012
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2011
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|||||||
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Net earnings
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$ | 223,122 | $ | 195,290 | ||||
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Non-cash items:
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||||||||
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Depreciation
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18,950 | 18,865 | ||||||
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Amortization
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52,289 | 50,266 | ||||||
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Stock-based compensation expense
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19,704 | 15,808 | ||||||
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Income taxes
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(18,615 | ) | 2,175 | |||||
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Changes in assets and liabilities:
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||||||||
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Receivables
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(12,565 | ) | (22,747 | ) | ||||
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Inventory
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(5,452 | ) | (25,312 | ) | ||||
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Accounts payable
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(1,827 | ) | 10,905 | |||||
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Accrued liabilities
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(18,544 | ) | 6,541 | |||||
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Other, net
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3,721 | (9,274 | ) | |||||
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Cash provided by operating activities
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260,783 | 242,517 | ||||||
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Business acquisitions, net of cash acquired
|
(36,872 | ) | (204,612 | ) | ||||
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Capital expenditures
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(20,532 | ) | (19,390 | ) | ||||
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Other, net
|
544 | (238 | ) | |||||
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Cash used by investing activities
|
(56,860 | ) | (224,240 | ) | ||||
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Principal debt payments
|
(13,215 | ) | (23,536 | ) | ||||
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Revolver payments, net
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- | (75,000 | ) | |||||
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Dividends
|
(26,673 | ) | (21,002 | ) | ||||
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Excess tax benefit from share-based payment
|
11,070 | 3,729 | ||||||
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Proceeds from exercise of stock options
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28,314 | 12,914 | ||||||
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Redemption premium on convertible debt
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(19,149 | ) | - | |||||
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Other, net
|
16 | 952 | ||||||
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Cash used by financing activities
|
(19,637 | ) | (101,943 | ) | ||||
|
Effect of exchange rate changes on cash
|
(3,489 | ) | 9,299 | |||||
|
Net increase (decrease) in cash and equivalents
|
180,797 | (74,367 | ) | |||||
|
Cash and equivalents, beginning of period
|
338,101 | 270,394 | ||||||
|
Cash and equivalents, end of period
|
$ | 518,898 | $ | 196,027 | ||||