Roper Technologies Announces Record Third Quarter Results

GAAP DEPS of $1.58; Adjusted DEPS of $1.61

YTD Free Cash Flow Increased 15% to $632 million

SARASOTA, Fla., Oct. 26, 2015 /PRNewswire/ -- Roper Technologies, Inc. ROP reported financial results for the third quarter ended September 30, 2015.

Roper reports results, including revenue, gross margin, 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 $1.58, a 3% increase over the prior year, and adjusted DEPS were $1.61, a 4% increase.  GAAP revenue was $884 million and adjusted revenue increased to $886 million.  GAAP operating profit increased 2% to $250 million, representing 28.3% of revenue.  Adjusted operating profit increased to $255 million and adjusted operating margin increased 80 basis points to 28.7%.  Orders increased to $894 million and enterprise book-to-bill was 1.01x for the quarter.

GAAP gross margin increased 110 basis points over the prior year to 60.4% and adjusted gross margin increased to 60.7%, a 130 basis point gain.  Operating cash flow increased to $227 million, or 25.6% of adjusted revenue, and free cash flow increased to $220 million.  Year to date free cash flow increased to $632 million, 15% higher than the prior year.

"Our businesses executed very well in the quarter despite continued headwinds in some energy markets and foreign currency translation," said Brian Jellison, Roper's Chairman, President and CEO.  "Margin performance continued to be exceptional across the enterprise. EBITDA margins increased to a record 34.4% in the quarter.  Our medical, software and toll and traffic businesses continued to grow organically."

Acquisitions

On October 21, 2015, Roper completed the acquisition of Aderant Holdings, Inc. and on October 2, 2015, Roper completed the sale of ABEL Pumps LP to Hillenbrand, Inc.

"We have now deployed over $1.7 billion in acquisitions in 2015.  We continue to execute on our disciplined acquisition strategy focused on companies with leadership positions in niche markets with high recurring revenue, strong cash returns and excellent management teams," said Mr. Jellison.

Roper also announced that it has signed a definitive agreement to acquire CliniSys Group Ltd., a leading European provider of laboratory information management systems, for £170 million.  CliniSys expands Roper's suite of diagnostic-related software.  Roper expects the acquisition to be completed in the first quarter of 2016, following the completion of customary merger control review.

2015 Outlook and Guidance

Roper is updating its full year adjusted diluted earnings per share guidance to $6.69$6.75, from its previous range of $6.61 - $6.75, and establishing fourth quarter adjusted diluted earnings per share guidance of $1.83 - $1.89.  The company's guidance excludes the impact of any future acquisitions or divestitures.  

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:  Q3 Revenue Growth Detail






Q3 2015

 Q3 2014

V%

Q3 GAAP Revenue

$884M

$884M

--%

Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center)

2

1


Q3 Adjusted Revenue

 

$886M

$885M

--%

 




Components of Adjusted Revenue Growth



            Organic

(2%)


        Acquisitions / Divestitures

5%


            Foreign Exchange

(3%)


     Total Growth

0%


 

Table 2:  Reconciliation of GAAP DEPS to Adjusted DEPS






Q3 2015

 Q3 2014

V%

GAAP Diluted Earnings Per Share (DEPS)

$1.58

$1.54

3%

Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center), net of tax @35%

 

Add:  Acquisition-Related Inventory Step-up Charge (IPA, RF IDeas), net of tax @35%

$0.01

$0.01


$0.01

--


Rounding

$0.01

--



$1.61

$1.55

4%

 

Table 3:  Free Cash Flow Reconciliation






YTD 2015

YTD 2014

V%

Operating Cash Flow

$660M

$579M

14%

Less:  Capital Expenditures

(28)

(30)


Free Cash Flow

$632M

$549M

15%

 

Table 4:  Adjusted Revenue and Adjusted Gross Margin Reconciliation






2015

2014

V bps

Q3 GAAP Revenue

$883.9M

$884.1M


Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center)

2.2

0.9


Rounding

--

0.1


Q3 Adjusted Revenue (A)

$886.1M

$885.1M






Q3 GAAP Gross Profit

$533.5M

$524.0M


Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center)

2.2

0.9


Add: Acquisition-Related Inventory Step-up Charge (IPA, RF IDeas)

2.0

0.4


Rounding

--

0.1


Adjusted Gross Profit (B)

$537.7M

$525.4M






GAAP Gross Margin

60.4%

59.3%

+110 bps





Adjusted Gross Margin (B) / (A)

60.7%

59.4%

+130 bps

 

Table 5:  Adjusted Revenue and Adjusted Operating Margin Reconciliation






2015

2014

V bps

Q3 GAAP Revenue

$883.9M

$884.1M


Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center)

2.2

0.9


Rounding

--

0.1


Q3 Adjusted Revenue (A)

$886.1M

$885.1M






Q3 GAAP Operating Profit

$250.4M

$245.7M


Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center)

2.2

0.9


Add: Acquisition-Related Inventory Step-up Charge (IPA, RF IDeas)

2.0

0.4


Rounding

(0.1)

--


Adjusted Operating Profit (B)

$254.5M

$247.0M






GAAP Operating Margin

28.3%

27.8%

+50 bps

Adjusted Operating Margin (B) / (A)

28.7%

27.9%

+80 bps

 

Table 6:  Adjusted Revenue and EBITDA Margin Reconciliation






2015

2014

V bps

Q3 GAAP Revenue

$883.9M

$884.1M


Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center)

2.2

0.9


Rounding

--

0.1


Q3 Adjusted Revenue (A)

$886.1M

$885.1M






Q3 GAAP Net Earnings

$160.4M

$155.5M


Add:  Interest Expense

20.4

20.0


Add:  Taxes

69.8

70.7


Add:  Depreciation

9.0

10.4


Add:  Amortization

41.0

39.7


Add:  Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations)

2.2

0.9


Add: Acquisition-Related Inventory Step-up Charge (IPA, RF IDeas)

2.0

0.4


EBITDA (B)

$304.8M

$297.6M






EBITDA Margin (B) / (A)

34.4%

33.6%

+80 bps

 

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, October 26, 2015.  The call can be accessed via webcast or by dialing +1 888-468-2440 (US/Canada) or +1 719-457-1512, using confirmation code 363379.  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://www.webcaster4.com/Webcast/Page/866/11027.  Telephonic replays will be available for up to two weeks by calling +1 719-457-0820 and using the access code 363379.

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 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 integrate 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 Technologies, Inc. and Subsidiaries




Condensed Consolidated Balance Sheets (unaudited)



(Amounts in thousands)













September 30,


December 31,

ASSETS

2015


2014





CURRENT ASSETS:




  Cash and cash equivalents

$       700,578


$        610,430

  Accounts receivable

489,183


511,538

  Inventories 

200,820


193,766

  Unbilled receivable

105,787


96,409

  Deferred taxes

62,506


54,199

  Assets held for sale

36,780


-

  Other current assets

52,225


45,763

    Total current assets

1,647,879


1,512,105





PROPERTY, PLANT AND EQUIPMENT, NET

105,280


110,876





OTHER ASSETS:




  Goodwill

5,325,844


4,710,691

  Other intangible assets, net

2,246,710


1,978,729

  Deferred taxes

31,534


27,496

  Other assets

75,752


73,037

    Total other assets

7,679,840


6,789,953





TOTAL ASSETS

$    9,432,999


$     8,412,934









LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




  Accounts payable

$       142,261


$        143,847

  Accrued compensation

107,266


117,374

  Deferred revenue

237,289


190,953

  Other accrued liabilities

160,312


160,738

  Deferred taxes

2,993


3,943

  Current portion of long-term debt

6,911


11,092

    Total current liabilities

657,032


627,947





NONCURRENT LIABILITIES:




  Long-term debt

2,792,067


2,203,031

  Deferred taxes

769,730


735,826

  Other liabilities

85,265


90,770

    Total liabilities

4,304,094


3,657,574





STOCKHOLDERS' EQUITY:




  Common stock

1,026


1,021

  Additional paid-in capital

1,392,296


1,325,338

  Retained earnings

3,932,195


3,520,201

  Accumulated other comprehensive earnings

(177,472)


(71,927)

  Treasury stock

(19,140)


(19,273)

    Total stockholders' equity

5,128,905


4,755,360





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$    9,432,999


$     8,412,934

 

 

Roper Technologies, Inc. and Subsidiaries








Condensed Consolidated Statements of Earnings (unaudited)





(Amounts in thousands, except per share data)





























Three months ended


Nine months ended



September 30,


September 30,



2015

2014


2015

2014










Net sales


$883,933


$884,122


$2,638,755


$2,603,349

Cost of sales


350,450


360,082


1,053,200


1,067,191










Gross profit


533,483


524,040


1,585,555


1,536,158










Selling, general and administrative expenses


283,112


278,382


836,314


820,434










Income from operations


250,371


245,658


749,241


715,724










Interest expense


20,369


20,013


60,382


59,352

Other income/(expense)


251


552


(1,948)


1,042










Earnings from continuing operations before









   income taxes


230,253


226,197


686,911


657,414










Income taxes


69,836


70,687


199,441


197,317










Net Earnings


$160,417


$155,510


$   487,470


$   460,097














































Earnings per share:









  Basic


$     1.59


$     1.55


$        4.85


$        4.61

  Diluted


$     1.58


$     1.54


$        4.80


$        4.56










Weighted average common and common









  equivalent shares outstanding:









    Basic


100,681


100,068


100,545


99,837

    Diluted


101,607


101,006


101,512


100,803

 

 

Roper Technologies, Inc. and Subsidiaries













Selected Segment Financial Data (unaudited)













(Amounts in thousands and percents of net sales)



















































Three months ended September 30,


Nine months ended September 30,



2015


2014


2015


2014



Amount


%


Amount


%


Amount


%


Amount


%

Net sales:

















  Medical & Scientific Imaging


$  299,621




$  268,809




$   893,583




$   793,899



  RF Technology


253,556




238,860




752,068




710,143



  Industrial Technology


186,147




205,688




563,342




607,503



  Energy Systems & Controls


144,609




170,765




429,762




491,804



    Total


$  883,933




$  884,122




$2,638,755




$2,603,349





































Gross profit:

















  Medical & Scientific Imaging


$  222,655


74.3%


$  193,132


71.8%


$   660,971


74.0%


$   572,738


72.1%

  RF Technology


133,692


52.7%


127,663


53.4%


397,874


52.9%


375,901


52.9%

  Industrial Technology


92,245


49.6%


104,012


50.6%


281,052


49.9%


306,464


50.4%

  Energy Systems & Controls


84,891


58.7%


99,233


58.1%


245,658


57.2%


281,055


57.1%

    Total


$  533,483


60.4%


$  524,040


59.3%


$1,585,555


60.1%


$1,536,158


59.0%



































Operating profit*:

















  Medical & Scientific Imaging


$  108,399


36.2%


$    91,227


33.9%


$   325,439


36.4%


$   275,379


34.7%

  RF Technology


74,604


29.4%


69,351


29.0%


228,521


30.4%


203,183


28.6%

  Industrial Technology


52,298


28.1%


62,046


30.2%


162,383


28.8%


178,540


29.4%

  Energy Systems & Controls


42,300


29.3%


49,033


28.7%


110,424


25.7%


130,844


26.6%

    Total


$  277,601


31.4%


$  271,657


30.7%


$   826,767


31.3%


$   787,946


30.3%



































Net Orders:

















  Medical & Scientific Imaging


$  317,743




$  270,881




$   900,176




$   799,021



  RF Technology


245,694




243,363




751,143




713,536



  Industrial Technology


184,846




205,945




555,431




611,074



  Energy Systems & Controls


145,478




173,172




416,803




490,106



    Total


$  893,761




$  893,361




$2,623,553




$2,613,737






















































  *  Operating profit is before unallocated corporate general and administrative expenses.  These expenses 







       were $27,230 and $25,999 for the three months ended September 30, 2015 and 2014, respectively and







       $77,526 and $72,222 for the nine months ended September 30, 2015 and 2014, respectively.








 

 

Roper Technologies, Inc. and Subsidiaries



Condensed Consolidated Statements of Cash Flows (unaudited)

(Amounts in thousands)

















Nine months ended



September 30,



2015


2014






Net earnings


$    487,470


$    460,097

Non-cash items:





Depreciation


28,454


30,442

Amortization


119,766


117,179

Stock-based compensation expense


47,035


47,011

Income taxes


(35,165)


(54,178)

Changes in assets and liabilities:





Receivables


26,051


(21,840)

Inventory


(7,047)


(8,833)

Accounts payable


(2,085)


(4,969)

Accrued liabilities


(6,603)


15,311

Other, net


1,691


(988)

  Cash provided by operating activities


659,567


579,232






Business acquisitions, net of cash acquired


(1,024,779)


(305,254)

Capital expenditures


(27,503)


(29,835)

Other, net


(4,369)


(5,304)

  Cash used by investing activities


(1,056,651)


(340,393)






Principal debt payments


(4,006)


(561)

Revolver borrowings/(payments), net


590,000


(95,000)

Dividends


(75,210)


(59,827)

Excess tax benefit from share-based payment


11,593


14,892

Proceeds from stock-based compensation, net


19,237


26,424

Premium on convertible debt conversions


(13,126)


(1,518)

Other, net


844


2,118

  Cash provided by/(used by) financing activities


529,332


(113,472)






Effect of exchange rate changes on cash


(42,100)


(20,975)






Net increase in cash and equivalents


90,148


104,392

Cash and equivalents, beginning of period


610,430


459,720






Cash and equivalents, end of period


$700,578


$564,112

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/roper-technologies-announces-record-third-quarter-results-300165779.html

SOURCE Roper Technologies, Inc.

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