Roper Industries, Inc. (NYSE: ROP) reported record financial results for the second quarter ended June 30, 2011.
Net earnings were $106 million and diluted earnings per share were $1.08. Excluding a foreign currency remeasurement gain on intercompany debt that appears in other income, diluted earnings per share were $1.03 and net earnings were $102 million, a 43% increase over the second quarter of 2010. Sales increased 23% to an all-time record of $700 million. Orders for the quarter were a record $708 million. Gross margin expanded to 53.9% and operating income was $164 million, representing 23.4% of sales.
Operating cash flow was $156 million, an increase of 41% from the prior year. Free cash flow was $145 million, representing 21% of sales. During the quarter, EBITDA increased by $54 million to $199 million and EBITDA margin expanded 280 basis points to 28.5% of sales.
"We are pleased to deliver another record quarter, with double-digit sales and orders growth in all four segments," said Brian Jellison, Roper's Chairman, President and CEO. "Operating leverage from the 16% organic sales growth combined with nimble execution throughout our businesses led to widespread margin expansion and record cash flow. Our book-to-bill ratio exceeded 1.0 for the eighth straight quarter and we enter the second half with a record backlog of $872 million."
During the quarter, Roper invested C$200 million to acquire Northern Digital, Inc., a leading provider of optical and electromagnetic measurement systems for medical and industrial applications. Mr. Jellison added, "Northern Digital is an excellent addition to our medical platform with technology and applications to improve patient outcomes while increasing productivity for doctors and hospitals. We have invested $725 million in acquisitions over the past twelve months and continue to have an exciting pipeline of opportunities."
2011 Outlook and Guidance
As a result of its strong first half performance and outlook for the year, Roper is increasing its operating cash flow guidance for the year to exceed $575 million and is increasing its full year guidance for diluted earnings per share to $4.20 - $4.30 from $3.97 - $4.12.
The Company's guidance includes the foreign currency remeasurement gain of $0.05 reported in the second quarter, and excludes any future acquisitions.