Roper Industries, Inc. (NYSE: ROP) reported financial results for the third quarter ended September 30, 2014.
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.
Third quarter GAAP diluted earnings per share (DEPS) were $1.54, a 13% increase over last year. Adjusted diluted earnings per share were $1.55, a 9% increase over last year. GAAP revenue increased 7% to $884 million and adjusted revenue increased 6% to $885 million. Orders increased to $893 million and enterprise book-to-bill was 1.01x for the quarter.
GAAP gross margin increased 100 basis points to 59.3% and adjusted gross margin increased to 59.4%, a 70 basis point gain over the prior year. EBITDA margin was a record 33.6% for the quarter. Operating cash flow in the quarter was $226 million, representing 145% conversion of GAAP Net Income.
"Our businesses continue to perform exceptionally well," said Brian Jellison, Roper's Chairman, President and CEO. "Revenue growth in the quarter was broad-based, with organic increases in each segment. We are encouraged by the continued strength in orders, which exceeded revenue in all four segments. We delivered free cash flow of $217 million, representing 24.5% of revenue."
"We invested $303 million in three acquisitions during the quarter," continued Mr. Jellison. "Strategic Healthcare Programs (SHP) and Innovative Product Achievements (IPA) are outstanding additions to our growing Medical platform. FoodLink® brings technology for food traceability and commerce solutions to our iTradeNetwork business. We are pleased with the performance of these businesses and are excited about their growth opportunities. Looking forward, we finished the quarter with substantial capacity for future acquisitions and have an attractive pipeline of opportunities."
2014 Outlook and Guidance
Roper is increasing its full year adjusted diluted earnings per share guidance to $6.32 – $6.38, from its previous range of $6.27 - $6.37, and establishing fourth quarter adjusted diluted earnings per share guidance of $1.75 - $1.81.