Roper Industries Announces Q2 Results
Roper Industries reported record results for its second quarter ended June 30, 2006. Diluted earnings per share (DEPS) were $0.53, an increase of 29% over the comparable period in the prior year. Current year results include the effects from implementation of SFAS 123R and related equity compensation costs, as well as dilution from the Company's senior subordinated convertible notes.
Net sales were up 18% to $425 million, which included 12% internal growth. Operating income increased 37% to $85 million and net earnings grew 35% to $48 million. Net orders increased 19% over prior year levels to $433 million, which included 13% internal growth.
"We are pleased to report strong internal sales and order growth during the quarter," said Brian Jellison, Roper's Chairman, President and CEO. "Our operating margins improved to 20.1% from 17.3% in the second quarter 2005. This combination of internal growth and operational execution allowed us to grow EBITDA by 33% to $106 million."
In the second quarter, Roper completed the acquisitions of Sinmed BV, which provides patient positioning systems for medical diagnostic and therapeutic applications, and Intellitrans LLC, a provider of services and software for track and trace logistics. Earlier this week, the Company also completed the acquisition of Lumenera, which engineers and produces high performance digital cameras. The Company expects to close a fourth transaction within the next two weeks. Total consideration for the four transactions approximates $94 million. The Company expects these acquisitions to produce 2007 net sales in excess of $70 million with 20% EBITDA margins. We expect these acquisitions to be accretive in 2007.
Mr. Jellison commented, "The acquisition of Sinmed, based in the Netherlands, increases the reach of our medical platform into Europe. The combination of Intellitrans' unique software and services with TransCore's RF and Satcom technology offers unparalleled track-and-trace functionality for rail customers. Lumenera, based in Canada, extends our imaging leadership into security markets and OEMs serving a variety of new applications. We welcome the employees of these businesses to the Roper family."
The Company also reported second quarter EBITDA of $106 million, or 24.9% of sales, 290 basis points higher than the second quarter of the previous year. Net working capital was reduced by 270 basis points to 14.6% of second quarter annualized 2006 sales. Net debt (debt minus cash) was reduced to 37.4% of total net capitalization and represents 2.1 times twelve month trailing EBITDA.
As a result of its strong second quarter performance, Roper is increasing its full year DEPS guidance from $1.98-$2.08 to $2.05-$2.11, and establishing third quarter DEPS guidance of $0.52-$0.54. The Company is increasing its full year EBITDA guidance from $390+ million to $405+ million. The Company's guidance does not include benefits from future acquisitions or the dilutive effects resulting from the Company's convertible notes.
Source: Roper Technologies, Inc