GAAP Revenue Increased 22%; Adjusted Revenue Increased 23%

Raising Full Year Adjusted DEPS Guidance

SARASOTA, Fla., July 31, 2017 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (NYSE:ROP), a diversified technology company, reported financial results for the second quarter ended June 30, 2017.

Roper reports results - including revenue, gross margin, operating margin, net income, and diluted earnings per share ("DEPS") - on a GAAP basis and an adjusted basis.

Second quarter GAAP revenue increased 22% to $1.13 billion and adjusted revenue grew 23% to $1.15 billion. GAAP gross margin increased 130 basis points to 62.2% and adjusted gross margin increased 170 basis points to 62.7%.

GAAP DEPS were $1.74, a 13% increase, while adjusted DEPS was $2.24, a 20% increase. Adjusted EBITDA grew 26% to $394 million and adjusted EBITDA margin grew 70 basis points to 34.3%.

"Our businesses continued to deliver excellent revenue and EBITDA growth in the quarter," said Brian Jellison, Roper's Chairman, President and CEO. "Revenue grew organically 6% with broad-based contributions from all four reporting segments. We also benefited significantly from our recent acquisitions, Deltek and ConstructConnect, which continue to perform exceptionally well.

"Outstanding margin and cash flow performance once again demonstrated the ability of our asset-light, niche market businesses to deliver excellent results. EBITDA as a percentage of revenue increased in all segments. Importantly, our year to date operating cash flow grew 33%, allowing us to reduce debt by $570 million. We are very pleased with our strong first half performance and we are well positioned to continue our positive momentum throughout the second half of the year," concluded Mr. Jellison.

2017 Guidance

Roper is raising its full year 2017 guidance and now expects adjusted DEPS of $9.12 - $9.30, compared to previous guidance of $8.98 - $9.28.

In the third quarter of 2017, the Company expects adjusted DEPS to be between $2.24 and $2.30.

The Company's guidance excludes the impact of future acquisitions or divestitures.

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 31, 2017. The call can be accessed via webcast or by dialing +1 888-596-2581 (US/Canada) or +1 719-325-4799, using confirmation code 6827048. 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://event.webcast. Telephonic replays will be available for up to two weeks and can be accessed by using the following registration URL https://event.replay with access code 6827048.

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:  Adjusted Revenue Reconciliation and Growth Detail ($M)
  Q2 2017   Q2 2016   V %  
GAAP Revenue $ 1,135   $ 932      22 %  
Purchase accounting adjustment to acquired deferred revenue A,B     16 A     2 B      
Adjusted Revenue $    1,151   $       934   23 %  
             
Components of Adjusted Revenue Growth            
Organic         6 %  
Acquisitions/Divestitures         18 %  
Foreign Exchange         (1 )%  
Total Adjusted Revenue Growth         23 %  
               

Table 2:  Adjusted DEPS Reconciliation
  Q2 2017   Q2 2016   V %  
GAAP Diluted Earnings Per Share (DEPS) $ 1.74     $ 1.54   13 %  
Purchase accounting adjustment to acquired deferred revenue A,B     0.10       0.02      
Purchase accounting adjustment for commission expense C   (0.01 )     -      
Amortization of Acquisition-related intangible assets, after tax D   0.46       0.31      
Gain on Sale of divested energy product line E   (0.06 )     -      
Impairment Charge on minority investment F   0.01       -      
Adjusted DEPS $    2.24     $     1.87      20 %  
                     

Table 3:  Adjusted Gross Margin Reconciliation ($M)

  Q2 2017   Q2 2016   V Bps  
GAAP Revenue $   1,135     $    932        
Purchase accounting adjustment to acquired deferred revenue A,B   16   A     2   B      
Adjusted Revenue $ 1,151     $ 934        
             
GAAP Gross Profit $ 706     $ 568        
Purchase accounting adjustment to acquired deferred revenue A,B     16   A   2   B    
Adjusted Gross Profit $ 722     $ 570        
             
GAAP Gross Margin   62.2 %     60.9 %    +130 bps  
Adjusted Gross Margin   62.7 %     61.0 %   +170 bps  
                     

Table 4:  Adjusted EBITDA Reconciliation ($M)

  Q2 2017   Q2 2016   V% / Bps  
GAAP Revenue $ 1,135     $ 932        
Purchase accounting adjustment to acquired deferred revenue A,B   16   A     2   B      
Adjusted Revenue $   1,151     $     934        
             
GAAP Net Earnings $ 180     $ 158        
Taxes   76       67        
Interest expense   46       27        
Depreciation   12       9        
Amortization   74       50        
Rounding   (1 )          
EBITDA $ 387     $ 311     24 %  
% of GAAP Revenue   34.1 %     33.4 %   +70 bps  
             
Purchase accounting adjustment to acquired deferred revenue, pretax A,B     16   A   2   B    
Purchase accounting adjustment for commission expense, pretax C   (1 )     -        
Gain on sale of divested Energy product line E   (9 )     -        
Impairment charge on minority investment F   2       -        
Rounding   (1 )     1        
Adjusted EBITDA $ 394     $ 314             26 %  
% of Adjusted Revenue   34.3 %     33.6 %   +70bps  
                     

Table 5:  Adjusted Operating Cash Flow Reconciliation
  1H 2017   1H 2016   V %
GAAP Operating Cash Flow $       550   $       377       46 %
Cash paid for taxes on 2015 ABEL sale     -     37    
Adjusted Operating Cash Flow $ 550   $ 414   33 %
                 

Table 6:  Forecasted Adjusted DEPS Reconciliation

  Q3 2017   Full Year 2017  
  Low End   High End   Low End   High End  
GAAP DEPS $ 1.72   $ 1.78   $ 7.03     $ 7.21    
Purchase accounting adjustments to acquired deferred revenue and commissions G     0.07     0.07     0.32       0.32    
Amortization of acquisition-related intangible assets, after-tax         0.45           0.45     1.82       1.82    
Gain on sale of divested Energy product line E              (0.06 )       (0.06 )  
Impairment charge on minority investment F           0.01       0.01    
                             
Adjusted DEPS $ 2.24   $ 2.30   $ 9.12     $ 9.30    

A  Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of ConstructConnect ($3.0M pretax, $1.9M after-tax), and Deltek ($13.2M pretax, $8.6M after-tax).

B  Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of On Center Software ($0.4M pretax, $0.2M after-tax), Aderant ($1.8M pretax, $1.2M after-tax), Atlas Medical ($0.1M pretax, $0.1M after-tax) and CliniSys ($0.2M pretax, $0.1M after-tax).

C  Purchase Accounting Adjustment for Commission Expense related to the acquisition of Deltek ($1.5M pretax, $1.0M after-tax).

D  Actual results and forecast of estimated amortization of acquisition-related intangible assets ($M); for comparison purposes, prior period amounts are also shown below. Tax Rate of 35% applied to amortization in all periods.
  Q2 2016A   Q3 2016A   FY 2016A   Q2 2017A   Q3 2017E   FY 2017E
Pretax $ 50   $ 49   $ 201   $ 73   $ 72   $ 289
After-tax $ 32   $ 32   $ 131   $ 48   $ 47   $ 188
Per share   $ 0.31   $ 0.31   $ 1.27   $ 0.46   $ 0.45   $ 1.82

E  Gain on sale of divested Energy product line ($9.4M pretax, $6.1M after-tax).

F  Impairment charge on minority investment ($1.8M pretax, $1.1M after-tax).

G  Forecasted acquisition-related fair value adjustments to acquired deferred revenue and commissions of ConstructConnect and Deltek, as shown below ($M, except per share data).
  Q3 2017   FY 2017E
Pretax $ 10   $ 51
After-tax $ 7   $ 33
Per Share   $ 0.07   $ 0.32
           

About Roper Technologies

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 other niche 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 may 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," "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 identify and complete acquisitions consistent with our business strategies, integrate acquisitions that have been completed, realize expected benefits and synergies from, and manage other risks associated with, the newly acquired businesses. We also face other general risks, including our ability to realize cost savings from our operating initiatives, general economic conditions and the conditions of the specific markets in which we operate, changes in foreign exchange rates, difficulties associated with exports, risks associated with our international operations, 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, 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   2017      2016   
         
CURRENT ASSETS:        
Cash and cash equivalents $ 663,344     $ 757,200    
Accounts receivable   576,362       619,854    
Inventories   199,842       181,952    
Unbilled receivable   146,944       129,965    
Other current assets   114,619       87,530    
Total current assets   1,701,111       1,776,501    
         
PROPERTY, PLANT AND EQUIPMENT, NET   142,641       141,318    
         
OTHER ASSETS:        
Goodwill and other intangible assets, net   12,258,824       12,302,985    
Deferred taxes   31,539       30,620    
Other assets   79,173       73,503    
Total other assets   12,369,536       12,407,108    
         
TOTAL ASSETS $ 14,213,288     $ 14,324,927    
         
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
         
CURRENT LIABILITIES:        
Accounts payable $ 155,371     $ 152,067    
Accrued compensation   156,665       161,730    
Deferred revenue   516,362       488,399    
Other accrued liabilities   238,975       219,339    
Income taxes payable   29,826       22,762    
Current portion of long-term debt   401,297       400,975    
Total current liabilities   1,498,496       1,445,272    
         
NONCURRENT LIABILITIES:        
Long-term debt   5,241,103       5,808,561    
Deferred taxes   1,158,965       1,178,205    
Other liabilities   114,238       104,024    
Total liabilities   8,012,802       8,536,062    
         
STOCKHOLDERS' EQUITY:        
Common stock   1,041       1,036    
Additional paid-in capital   1,554,562       1,489,067    
Retained earnings   4,908,492       4,642,402    
Accumulated other comprehensive earnings   (244,812 )     (324,739 )  
Treasury stock   (18,797 )     (18,901 )  
Total stockholders' equity   6,200,486       5,788,865    
         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 14,213,288     $ 14,324,927    
         

 
             
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,
    2017   2016   2017   2016
                 
Net sales   $ 1,134,671   $ 931,558     $ 2,220,976   $ 1,833,981  
Cost of sales     429,021     364,038       847,712     706,942  
                 
Gross profit     705,650     567,520       1,373,264     1,127,039  
                 
Selling, general and administrative expenses     411,392     314,442       820,750     628,970  
                 
Income from operations     294,258     253,078       552,514     498,069  
                 
Interest expense     45,813     26,863       91,678     54,276  
Other income/(expense), net     6,969     (1,334 )     5,922     (1,463 )
                 
Earnings from continuing operations before income taxes     255,414     224,881       466,758     442,330  
                 
Income taxes     75,858     66,812       129,131     132,845  
                 
Net earnings   $ 179,556   $ 158,069     $ 337,627   $ 309,485  
                 
                 
Earnings per share:                
Basic   $ 1.76   $ 1.56     $ 3.31   $ 3.06  
Diluted   $ 1.74   $ 1.54     $ 3.27   $ 3.02  
                 
Weighted average common and common equivalent shares outstanding:                  
Basic     102,081     101,249       101,983     101,160  
Diluted     103,409     102,466       103,247     102,376  
                 

 
                             
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,
    2017   2016   2017   2016
    Amount   %   Amount   %   Amount   %   Amount   %
Net sales:                                
Medical & Scientific Imaging   $ 350,764         340,585       $ 698,999       $ 672,799    
RF Technology     460,497         288,761         890,116         568,971    
Industrial Technology     192,867         178,627         376,271         349,862    
Energy Systems & Controls     130,543         123,585         255,590         242,349    
Total   $ 1,134,671       $ 931,558       $ 2,220,976       $ 1,833,981    
                                 
                                 
Gross profit:                                
Medical & Scientific Imaging   $ 254,028   72.4 %   $ 246,396   72.3 %   $ 505,958   72.4 %   $ 493,293   73.3 %
RF Technology     279,735   60.7 %     163,005   56.4 %     531,213   59.7 %     323,370   56.8 %
Industrial Technology     98,167   50.9 %     89,709   50.2 %     191,318   50.8 %     175,729   50.2 %
Energy Systems & Controls     73,720   56.5 %     68,410   55.4 %     144,775   56.6 %     134,647   55.6 %
Total   $ 705,650   62.2 %   $ 567,520   60.9 %   $ 1,373,264   61.8 %   $ 1,127,039   61.5 %
                                 
                                 
Operating profit*:                                
Medical & Scientific Imaging   $ 121,315   34.6 %   $ 114,271   33.6 %   $ 241,108   34.5 %   $ 228,727   34.0 %
RF Technology     119,558   26.0 %     89,354   30.9 %     208,542   23.4 %     178,120   31.3 %
Industrial Technology     58,249   30.2 %     51,291   28.7 %     111,862   29.7 %     98,050   28.0 %
Energy Systems & Controls     32,867   25.2 %     27,769   22.5 %     63,103   24.7 %     51,951   21.4 %
Total   $ 331,989   29.3 %   $ 282,685   30.3 %   $ 624,615   28.1 %   $ 556,848   30.4 %
                                 
                                 
Net Orders:                                
Medical & Scientific Imaging   $ 352,018       $ 338,436       $ 702,795       $ 682,286    
RF Technology     488,476         318,231         929,765         599,356    
Industrial Technology     201,655         175,967         396,971         354,872    
Energy Systems & Controls     129,510         123,704         256,237         246,474    
Total   $ 1,171,659       $ 956,338       $ 2,285,768       $ 1,882,988    
                                 
                                 
*Segment operating profit is before unallocated corporate general and administrative expenses. These expenses were $37,731 and $29,607 for the three months ended June 30, 2017 and 2016, respectively, and $72,101 and $58,779 for the six months ended June 30, 2017 and 2016, respectively.
                                 

 
       
Roper Technologies, Inc. and Subsidiaries  
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)   
           
           
    Six months ended  
    June 30,  
    2017   2016  
           
Net earnings   $    337,627     $    309,485    
Non-cash items:          
Depreciation     24,284       19,052    
Amortization     147,186       99,719    
Stock-based compensation expense     43,864       39,092    
Gain on sale of assets     (9,393 )     -    
Income taxes     (51,019 )     (77,931 )  
Changes in assets and liabilities:          
Receivables     33,197       (10,202 )  
Inventory     (13,177 )     (104 )  
Accounts payable     (360 )     (5,481 )  
Accrued liabilities     48,996       7,763    
Other, net     (11,113 )     (4,561 )  
Cash provided by operating activities     550,092       376,832    
           
Business acquisitions, net of cash acquired     (35,515 )     (274,968 )  
Capital expenditures     (24,797 )     (18,348 )  
Capitalized software expenditures     (5,725 )     (1,249 )  
Proceeds from sale of assets     10,506       758    
Other, net     (6,531 )     570    
Cash used in investing activities     (62,062 )     (293,237 )  
           
Revolver payments, net     (570,000 )     (180,000 )  
Dividends     (70,937 )     (60,383 )  
Proceeds from stock-based compensation, net       20,711       8,516    
Other, net     1,854       (110 )  
Cash used in financing activities     (618,372 )     (231,977 )  
           
Effect of exchange rate changes on cash     36,486       (7,835 )  
           
Net decrease in cash and equivalents     (93,856 )     (156,217 )  
Cash and equivalents, beginning of period     757,200       778,511    
           
Cash and equivalents, end of period   $ 663,344     $ 622,294    
           
Contact Information:Investor Relations941-556-2601investor-relations@ropertech.com

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