ROP
$258.11
Roper Industries
$1.77
.69%
Earnings Details
3rd Quarter September 2017
Monday, October 30, 2017 6:55:17 AM
Tweet Share Watch
Summary

Roper Technologies Guides In-line

Roper Industries (ROP) reported 3rd Quarter September 2017 earnings of $2.36 per share on revenue of $1.2 billion. The consensus earnings estimate was $2.30 per share on revenue of $1.2 billion. Revenue grew 22.7% on a year-over-year basis.

The company said it expects fourth quarter earnings of $2.56 to $2.62 per share. The current consensus earnings estimate is $2.62 per share for the quarter ending December 31, 2017.

Roper Industries Inc designs, manufactures and distributes energy systems and controls, scientific and industrial imaging products and software, industrial technology products and radio frequency products and services.

Results
Reported Earnings
$2.36
Earnings Whisper
-
Consensus Estimate
$2.30
Reported Revenue
$1.16 Bil
Revenue Estimate
$1.16 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Roper Technologies Announces Third Quarter Results

GAAP Revenue Increased 23%; Adjusted Revenue Increased 24%

Raising Full Year Adjusted DEPS Guidance

Roper Technologies, Inc. (ROP), a diversified technology company, reported financial results for the third quarter ended September 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.

Third quarter GAAP revenue increased 23% to $1.16 billion and adjusted revenue grew 24% to $1.17 billion. GAAP gross margin expanded 140 basis points to 62.6% and adjusted gross margin expanded 170 basis points to 63.0%.

GAAP DEPS was $1.84, a 13% increase, while adjusted DEPS was $2.36, a 20% increase. Adjusted EBITDA grew 24% to $407 million and adjusted EBITDA margin expanded 20 basis points to 34.8%.

"Our businesses performed exceptionally well in the third quarter as our asset-light, niche market strategy continues to produce excellent results," said Brian Jellison, Roper’s Chairman, President and CEO. "We delivered 24% growth in both adjusted revenue and adjusted EBITDA with 5% organic revenue growth and great operating leverage. Our software and network businesses, including Deltek and ConstructConnect, continued to perform well. We also benefited from broad-based growth and strong margin performance in our product businesses."

"Our cash performance has helped us to reduce debt by $880 million year to date, demonstrating our ability to quickly de-lever after acquisitions. We see continuing broad-based strength across the enterprise that will drive additional growth in the fourth quarter and position us well for a record 2018," concluded Mr. Jellison.

2017 Guidance Update

Roper is raising its full year 2017 guidance and now expects adjusted DEPS of $9.27 - $9.33, compared to previous guidance of $9.12 - $9.30.

In the fourth quarter of 2017, the Company expects adjusted DEPS to be between $2.56 and $2.62.

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, October 30, 2017. The call can be accessed via webcast or by dialing +1 800-231-9012 (US/Canada) or +1 719-325-2168, using confirmation code 7559336. 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 7559336.

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)

Q3 2017
Q3 2016
V %
GAAP Revenue
$
1,160
$
945
23 %
Purchase accounting adjustment to acquired deferred revenue
12
2
Rounding
(1
)
-
Adjusted Revenue
$
1,171
$
947
24 %
Components of Adjusted Revenue Growth
Organic
5
%
Acquisitions/Divestitures
19 %
Foreign Exchange
1
%
Rounding
(1 )%
Total Adjusted Revenue Growth
24 %

Table 2: Adjusted DEPS Reconciliation

Q3 2017
Q3 2016
V %
GAAP Diluted Earnings Per Share (DEPS)
$
1.84
$
1.63
13 %
Purchase accounting adjustment to acquired deferred revenue
0.07
0.01
Purchase accounting adjustment for commission expense
(0.01 )
-
Amortization of Acquisition-related intangible assets
0.46
0.31
Debt Extinguishment Charge
-
0.01
Adjusted DEPS
$
2.36
$
1.96
20 %

Table 3: Adjusted Gross Margin Reconciliation ($M)

Q3 2017
Q3 2016
V Bps
GAAP Revenue
$
1,160
$
945
Purchase accounting adjustment to acquired deferred revenue
12
2
Rounding
(1
)
-
Adjusted Revenue
$
1,171
$
947
GAAP Gross Profit
$
726
$
578
Purchase accounting adjustment to acquired deferred revenue
12
2
Rounding
-
1
Adjusted Gross Profit
$
738
$
581
GAAP Gross Margin
62.6
%
61.2 %
+140 bps
Adjusted Gross Margin
63.0
%
61.3 %
+170 bps

Table 4: Adjusted EBITDA Reconciliation ($M)

Q3 2017
Q3 2016
V% / Bps
GAAP Revenue
$
1,160
$
945
Purchase accounting adjustment to acquired deferred revenue
12
2
Rounding
(1
)
-
Adjusted Revenue
$
1,171
$
947
GAAP Net Earnings
$
190
$
167
Taxes
74
73
Interest expense
46
27
Depreciation
12
9
Amortization
74
49
Rounding
1
-
EBITDA
$
397
$
325
Purchase accounting adjustment to acquired deferred revenue
12
2
Purchase accounting adjustment for commission expense
(1
)
-
Debt Extinguishment Charge
-
1
Rounding
(1
)
-
Adjusted EBITDA
$
407
$
328
24
%
% of Adjusted Revenue
34.8
%
34.6 %
+20bps

Table 5: Forecasted Adjusted DEPS Reconciliation

Q4 2017
Full Year 2017
Low End
High End
Low End
High End
GAAP DEPS
$
2.07
$
2.13
$
7.17
$
7.23
Purchase accounting adjustments to acquired deferred revenue and commissions
0.04
0.04
0.32
0.32
Amortization of acquisition-related
0.45
0.45
1.83
1.83
intangible assets
Gain on sale of divested Energy product line
-
-
(0.06 )
(0.06 )
Impairment charge on minority investment
-
-
0.01
0.01
Adjusted DEPS
$
2.56
$
2.62
$
9.27
$
9.33

A Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of ConstructConnect ($1.4M pretax, $0.9M after-tax), and Deltek ($10.2M pretax, $6.6M after-tax).

B Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of On Center Software ($0.1M pretax, $0.1M 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 ($1.2M pretax, $0.8M 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.

Q3 2016A
Q4 2016A
FY 2016A
Q3 2017A
Q4 2017E
FY 2017E
Pretax
$
49
$
54
$
201
$
73
$
73
$
292
After-tax $
32
$
35
$
131
$
48
$
47
$
190
Per share $
0.31
$
0.34
$
1.27
$
0.46
$
0.45
$
1.83

E Debt Extinguishment Charge ($0.9M pretax, $0.6M after-tax).

F Forecasted acquisition-related fair value adjustments to acquired deferred revenue and commissions of ConstructConnect and Deltek, as shown below ($M, except per share data).

Q4 2017E
FY 2017E
Pretax
$
6
$
51
After-tax $
4
$
33
Per Share $
0.04
$
0.32

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

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

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)
September 30, 2017
December 31, 2016
ASSETS:
Cash and cash equivalents
$
605,616
$
757,200
Accounts receivable, net
603,874
619,854
Inventories, net
209,306
181,952
Unbilled receivables
157,852
129,965
Other current assets
115,408
87,530
Total current assets
1,692,056
1,776,501
Property, plant and equipment, net
141,279
141,318
Goodwill
8,793,956
8,647,142
Other intangible assets, net
3,502,687
3,655,843
Deferred taxes
32,459
30,620
Other assets
84,236
73,503
Total assets
$
14,246,673
$
14,324,927
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Accounts payable
$
163,719
$
152,067
Accrued compensation
168,931
161,730
Deferred revenue
534,562
488,399
Other accrued liabilities
261,457
219,339
Income taxes payable
46,575
22,762
Current portion of long-term debt, net
401,534
400,975
Total current liabilities
1,576,778
1,445,272
Long-term debt, net of current portion
4,932,721
5,808,561
Deferred taxes
1,163,371
1,178,205
Other liabilities
114,819
104,024
Total liabilities
7,787,689
8,536,062
Common stock
1,043
1,036
Additional paid-in capital
1,591,039
1,489,067
Retained earnings
5,062,926
4,642,402
Accumulated other comprehensive loss
(177,277
)
(324,739
)
Treasury stock
(18,747
)
(18,901
)
Total stockholders’ equity
6,458,984
5,788,865
Total liabilities and stockholders’ equity $
14,246,673
$
14,324,927
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,
2017
2016
2017
2016
Net revenues
$
1,159,912
$ 945,144
$
3,380,888
$
2,779,125
Cost of sales
433,492
366,651
1,281,204
1,073,593
Gross profit
726,420
578,493
2,099,684
1,705,532
Selling, general and administrative expenses
415,673
311,103
1,236,423
940,073
Income from operations
310,747
267,390
863,261
765,459
Interest expense, net
45,523
26,800
137,201
81,076
Other income/(expense), net
(659
)
(534
)
5,263
(1,997
)
Earnings before income taxes
264,565
240,056
731,323
682,386
Income taxes
74,292
72,977
203,423
205,822
Net earnings
$
190,273
$ 167,079
$
527,900
$
476,564
Net earnings per share:
Basic
$
1.86
$ 1.65
$
5.17
$
4.71
Diluted
1.84
1.63
5.11
4.65
Weighted average common shares outstanding:
Basic
102,303
101,372
102,091
101,231
Diluted
103,680
102,522
103,397
102,424
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,
2017
2016
2017
2016
Amount
%
Amount
%
Amount
%
Amount
%
Net revenues:
RF Technology
$
480,572
$
303,565
$
1,370,688
$
872,536
Medical & Scientific Imaging
343,639
338,027
1,042,638
1,010,826
Industrial Technology
200,442
178,317
576,713
528,179
Energy Systems & Controls
135,259
125,235
390,849
367,584
Total
$
1,159,912
$
945,144
$
3,380,888
$
2,779,125
Gross profit:
RF Technology
$
298,883
62.2
%
$
169,123
55.7
%
$
830,096
60.6
%
$
492,493
56.4
%
Medical & Scientific Imaging
247,138
71.9
%
247,432
73.2
%
753,096
72.2
%
740,725
73.3
%
Industrial Technology
102,092
50.9
%
90,950
51.0
%
293,410
50.9
%
266,679
50.5
%
Energy Systems & Controls
78,307
57.9
%
70,988
56.7
%
223,082
57.1
%
205,635
55.9
%
Total
$
726,420
62.6
%
$
578,493
61.2
%
$
2,099,684
62.1
%
$
1,705,532
61.4
%
Operating profit*:
RF Technology
$
134,148
27.9
%
$
94,785
31.2
%
$
342,690
25.0
%
$
272,905
31.3
%
Medical & Scientific Imaging
115,506
33.6
%
118,979
35.2
%
356,614
34.2
%
347,706
34.4
%
Industrial Technology
62,255
31.1
%
52,800
29.6
%
174,117
30.2
%
150,850
28.6
%
Energy Systems & Controls
36,351
26.9
%
31,777
25.4
%
99,454
25.4
%
83,728
22.8
%
Total
$
348,260
30.0
%
$
298,341
31.6
%
$
972,875
28.8
%
$
855,189
30.8
%
Net Orders:
RF Technology
$
475,003
$
300,303
$
1,404,768
$
899,659
Medical & Scientific Imaging
351,455
332,624
1,054,254
1,014,910
Industrial Technology
210,110
173,757
607,081
528,629
Energy Systems & Controls
134,197
121,818
390,434
368,292
Total
$
1,170,765
$
928,502
$
3,456,537
$
2,811,490
*Segment operating profit is before unallocated corporate general and administrative expenses. These expenses were $37,513 and $30,951 for the three months ended September 30, 2017 and 2016, respectively, and $109,614 and $89,730 for the nine months ended September 30, 2017 and 2016, respectively.
Roper Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
Nine months ended September 30,
2017
2016
Cash flows from operating activities:
Net earnings
$
527,900
$
476,564
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation and amortization of property, plant and equipment
36,776
27,954
Amortization of intangible assets
221,518
149,149
Amortization of deferred financing costs
5,463
4,080
Non-cash stock compensation
67,598
60,480
Gain on sale of assets
(9,393
)
--
Changes in operating assets and liabilities, net of acquired businesses:
Accounts receivable
30,074
(1,660
)
Unbilled receivables
(27,186
)
3,684
Inventories
(19,577
)
(5,916
)
Accounts payable and accrued liabilities
48,276
17,273
Deferred revenue
50,554
19,692
Income taxes
(48,370
)
(52,728
)
Other, net
(17,900
)
(5,199
)
Cash provided by operating activities
865,733
693,373
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired
(88,070
)
(277,587 )
Capital expenditures
(35,898
)
(26,933
)
Capitalized software expenditures
(8,043
)
(1,528
)
Proceeds from sale of assets
10,614
866
Other, net
(6,932
)
1,564
Cash used in investing activities
(128,329 )
(303,618 )
Cash flows from financing activities:
Payments under revolving line of credit, net
(880,000 )
(180,000 )
Principal payments on convertible notes
--
(4,010
)
Cash premiums paid on convertible note conversions
--
(13,308
)
Cash dividends to stockholders
(106,480 )
(90,632
)
Proceeds from stock based compensation, net
32,932
13,895
Treasury stock sales
3,194
2,576
Other
179
(7,816
)
Cash used in financing activities
(950,175 )
(279,295 )
Effect of foreign currency exchange rate changes on cash
61,187
(6,701
)
Net (decrease)/increase in cash and cash equivalents
(151,584 )
103,759
Cash and cash equivalents, beginning of period
757,200
778,511
Cash and cash equivalents, end of period
$
605,616
$
882,270
Contact Information:
Investor Relations
941-556-2601
investor-relations@ropertech.com

<img src="http://www.globenewswire.com/newsroom/ti?ndecode=MTUwIzY5ODU2ODA=" alt="" width="1" height="1"/>