• Roper Technologies Announces Record First Quarter Results and Increases Full Year Guidance

    Source: Nasdaq GlobeNewswire / 27 Apr 2021 06:00:01   America/New_York

    SARASOTA, Fla., April 27, 2021 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (NYSE: ROP), a leading diversified technology company, reported financial results for the first quarter ended March 31, 2021.

    First quarter GAAP and adjusted revenue increased 13% to $1.53 billion, while organic revenue decreased 1% (compared to 4% growth in the first quarter of 2020). GAAP and adjusted gross margin were 65.0%, expanding 160 basis points and 150 basis points, respectively. GAAP diluted earnings per share (“DEPS”) was $2.73, a 20% increase, and adjusted DEPS was $3.60, an 18% increase.

    EBITDA increased 20% to $561 million and EBITDA margin expanded 220 basis points to 36.7%. Operating cash flow increased 54% to $560 million, representing 37% of revenue, and free cash flow increased 54% to $543 million.

    “We are very pleased with the strong performance by our businesses in the first quarter,” said Neil Hunn, Roper’s President and CEO. “We grew revenue, EBITDA, DEPS, and cash flow double-digits. Our 2020 software acquisitions, led by Vertafore, continue to perform very well. We also reduced our debt by approximately $500 million in the quarter, once again demonstrating our ability to quickly de-lever after acquisitions.”

    “The quality of our enterprise continues to improve as we see meaningful growth in our recurring revenue base,” said Mr. Hunn. “We are also encouraged by signs of recovery across end-markets that were impacted by the pandemic. As a result, we are very well positioned for continued double-digit compounding.”

    Increasing 2021 Guidance

    The Company now expects full year adjusted DEPS of $14.75 - $15.00, compared to previous guidance of $14.35 - $14.75.

    For the second quarter of 2021, the Company expects adjusted DEPS of $3.61 - $3.65.

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

    Conference Call to be Held at 7:30 AM (ET) Today

    A conference call to discuss these results has been scheduled for 7:30 AM ET on Tuesday, April 27, 2021. The call can be accessed via webcast or by dialing +1 844-750-4898 (US/Canada) or +1 412-317-5294 and referencing Roper Technologies. 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 dialing +1 412-317-0088 with access code 10154556.

    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, Gross Profit and EBITDA Reconciliation ($M)
          
     Q1 2020 Q1 2021 V %
    Adjusted Revenue Reconciliation     
    GAAP Revenue$1,351  $1,529   13 %
    Purchase accounting adjustment to acquired deferred revenue2  1   A  
    Adjusted Revenue$1,353  $1,530   13 %
          
    Components of Adjusted Revenue Growth     
    Organic    (1)%
    Acquisitions/Divestitures    12 %
    Foreign Exchange    1 %
    Rounding    1 %
    Total Adjusted Revenue Growth    13 %
          
    Adjusted Gross Profit Reconciliation     
    GAAP Gross Profit$857  $994    
    Purchase accounting adjustment to acquired deferred revenue2  1   A 
    Adjusted Gross Profit$859  $995   16 %
          
    GAAP Gross Margin63.4% 65.0 % +160 bps
    Adjusted Gross Margin63.5% 65.0 % +150 bps
          
    Adjusted EBITDA Reconciliation     
    GAAP Net Earnings$240  $289    
    Taxes64  78    
    Interest Expense45  61    
    Depreciation13  15    
    Amortization102  147    
    EBITDA$465  $589   27 %
          
    Purchase accounting adjustment to acquired deferred revenue and commission expense2  —   A  
    Gain on sale related to minority investment in Sedaru—  (28)   
    Adjusted EBITDA$467  $561   20 %
    % of Adjusted Revenue34.5% 36.7 % +220 bps


    Table 2: Adjusted DEPS Reconciliation B
          
     Q1 2020 Q1 2021 V %
    GAAP DEPS$2.28  $2.73   20 %
    Purchase accounting adjustment to acquired deferred revenue and commission expense0.02  —  A  
    Amortization of acquisition-related intangible assets C0.75  1.08    
    Gain on sale related to minority investment in Sedaru—  (0.21)   
    Adjusted DEPS$3.05  $3.60   18 %
                 


    Table 3: Free Cash Flow Reconciliation ($M)
          
     Q1 2020 Q1 2021 V %
    Operating Cash Flow$364    $560    54 %
    Capital Expenditures(8)  (9)   
    Capitalized Software Expenditures(3)  (7)   
    Free Cash Flow$353    $543    54 %
                 


    Table 4: Forecasted Adjusted DEPS Reconciliation B
            
     Q2 2021 FY 2021
     Low End High End Low End High End
    GAAP DEPS$2.54   $2.58   $10.70   $10.95  
    Purchase accounting adjustment to acquired deferred revenue and commission expense A(0.01)  (0.01)  (0.04)  (0.04) 
    Amortization of acquisition-related intangible assets C1.08   1.08   4.30   4.30  
    Gain on sale related to minority investment in Sedaru—   —   (0.21)  (0.21) 
    Adjusted DEPS$3.61   $3.65   $14.75   $15.00  
                        


    A.2021 actual results and forecast of estimated acquisition-related fair value adjustments to deferred revenue and commission expense related to the acquisition of Vertafore as shown below ($M except per share data).
      Q1 2020A Q1 2021A  Q2 2021E FY 2021E
     Pretax$2   $—    $(1)  $(5)  
     After-tax$2   $—    $(1)  $(4)  
     Per Share$0.02   $—    $(0.01)  $(0.04)  
              
    B.All 2020 and 2021 adjustments taxed at 21%.
              
    C.Actual results and forecast of estimated amortization of acquisition-related intangible assets as shown below ($M, except per share data).
      Q1 2020A Q1 2021A  Q2 2021E FY 2021E
     Pretax$101   $145    $145    $578    
     After-tax$79   $115    $114    $457    
     Per share$0.75   $1.08    $1.08    $4.30    

    Note: Numbers may not foot due to rounding.

    About Roper Technologies

    Roper Technologies is a constituent of the S&P 500, Fortune 1000, and the Russell 1000 indices. Roper operates businesses that design and develop software (both license and software-as-a-service) and engineered products and solutions for a variety of niche end markets. 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 the effects of the COVID-19 pandemic on our business, operations, financial results and liquidity, including the duration and magnitude of such effects, which will depend on numerous evolving factors which we cannot accurately predict or assess, including: the duration and scope of the pandemic; the negative impact on global and regional markets, economies and economic activity; actions governments, businesses and individuals take in response to the pandemic; the effects of the pandemic, including all of the foregoing, on our customers, suppliers, and business partners, and how quickly economies and demand for our products and services recover after the pandemic subsides. Such risks and uncertainties also 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, cybersecurity and data privacy risks, including litigation resulting therefrom, risks related to political instability, armed hostilities, incidents of terrorism, public health crises (such as the COVID-19 pandemic) or natural disasters, 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 litigation, including 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 millions)   
        
     March 31, 2021 December 31, 2020
    ASSETS:   
        
    Cash and cash equivalents$331.0    $308.3   
    Accounts receivable, net792.0    863.0   
    Inventories, net206.0    198.4   
    Income taxes receivable13.2    21.9   
    Unbilled receivables268.0    241.7   
    Other current assets129.2    119.0   
    Total current assets1,739.4    1,752.3   
        
    Property, plant and equipment, net134.6    140.6   
    Goodwill14,405.3    14,395.2   
    Other intangible assets, net7,066.8    7,206.9   
    Deferred taxes102.3    104.0   
    Other assets422.7    425.8   
    Total assets$23,871.1    $24,024.8   
        
    LIABILITIES AND STOCKHOLDERS' EQUITY:   
        
    Accounts payable$190.9    $177.8   
    Accrued compensation234.0    286.1   
    Deferred revenue1,023.4    994.6   
    Other accrued liabilities448.5    457.0   
    Income taxes payable64.0    26.9   
    Current portion of long-term debt, net502.1    502.0   
    Total current liabilities2,462.9    2,444.4   
        
    Long-term debt, net of current portion8,571.8    9,064.5   
    Deferred taxes1,571.6    1,562.5   
    Other liabilities499.1    473.6   
    Total liabilities13,105.4    13,545.0   
        
    Common stock1.1    1.1   
    Additional paid-in capital2,138.9    2,097.5   
    Retained earnings8,776.0    8,546.2   
    Accumulated other comprehensive loss(132.4)  (147.0) 
    Treasury stock(17.9)  (18.0) 
    Total stockholders' equity10,765.7    10,479.8   
        
    Total liabilities and stockholders' equity$23,871.1    $24,024.8   


    Roper Technologies, Inc. and Subsidiaries 
    Condensed Consolidated Statements of Earnings (unaudited)
    (Amounts in millions, except per share data)
        
     Three months ended March 31,
     2021 2020
    Net revenues$1,528.6    $1,350.7   
    Cost of sales534.8    493.9   
    Gross profit993.8    856.8   
        
    Selling, general and administrative expenses593.3    507.6   
    Income from operations400.5    349.2   
        
    Interest expense, net60.6    45.4   
    Other income (expense), net27.0    0.8   
        
    Earnings before income taxes366.9    304.6   
        
    Income taxes77.9    64.3   
        
    Net earnings$289.0    $240.3   
        
    Net earnings per share:   
    Basic$2.75    $2.30   
    Diluted$2.73    $2.28   
        
    Weighted average common shares outstanding:   
    Basic105.0    104.3   
    Diluted106.0    105.3   


    Roper Technologies, Inc. and Subsidiaries
    Selected Segment Financial Data (unaudited)
    (Amounts in millions; percentages of net revenues)
            
            
     Three Months Ended March 31,
     2021 2020
     Amount % Amount %
    Net revenues:       
    Application Software$576.6     $405.1    
    Network Software & Systems440.2     438.2    
    Measurement & Analytical Solutions381.0     365.2    
    Process Technologies130.8     142.2    
    Total$1,528.6     $1,350.7    
            
            
    Gross profit:       
    Application Software$398.7   69.1 % $270.4   66.7 %
    Network Software & Systems299.4   68.0 % 293.2   66.9 %
    Measurement & Analytical Solutions224.7   59.0 % 214.6   58.8 %
    Process Technologies71.0   54.3 % 78.6   55.3 %
    Total$993.8   65.0 % $856.8   63.4 %
            
            
    Operating profit*:       
    Application Software$153.7   26.7 % $97.6   24.1 %
    Network Software & Systems135.5   30.8 % 138.7   31.7 %
    Measurement & Analytical Solutions124.1   32.6 % 114.0   31.2 %
    Process Technologies38.3   29.3 % 43.3   30.5 %
    Total$451.6   29.5 % $393.6   29.1 %
            
            
    *Segment operating profit is before unallocated corporate general and administrative expenses. These expenses were $51.1 and $44.4 for the three months ended March 31, 2021 and 2020, respectively.


    Roper Technologies, Inc. and Subsidiaries 
    Condensed Consolidated Statements of Cash Flows (unaudited)
    (Amounts in millions)
        
     Three months ended March 31,
     2021 2020
    Cash flows from operating activities:   
    Net earnings$289.0    $240.3   
    Adjustments to reconcile net earnings to cash flows from operating activities:   
    Depreciation and amortization of property, plant and equipment14.7    12.8   
    Amortization of intangible assets146.6    101.8   
    Amortization of deferred financing costs3.4    2.1   
    Non-cash stock compensation32.9    27.7   
    Gain on sale of assets, net of tax(21.6)  —   
    Income tax provision, excluding tax associated with gain on sale of assets 72.4    64.3  
    Changes in operating assets and liabilities, net of acquired businesses:   
    Accounts receivable70.3    69.1   
    Unbilled receivables(22.2)  (43.1) 
    Inventories(8.2)  (10.3) 
    Accounts payable and accrued liabilities(46.4)  (70.2) 
    Deferred revenue60.5    3.6   
    Cash income taxes paid(17.8)  (24.1) 
    Other, net(14.0)  (10.1) 
    Cash provided by operating activities559.6    363.9   
        
    Cash flows from (used in) investing activities:   
    Acquisitions of businesses, net of cash acquired—    (2.8) 
    Capital expenditures(9.1)  (7.9) 
    Capitalized software expenditures(7.2)  (2.6) 
    Proceeds from (used in) disposal of businesses(0.1)  (3.7) 
    Proceeds from sale of assets27.1    —   
    Cash from (used in) investing activities10.7    (17.0) 
        
    Cash flows from (used in) financing activities:   
    Borrowings (payments) under revolving line of credit, net(495.0)  —   
    Cash dividends to stockholders(58.8)  (53.1) 
    Proceeds from stock-based compensation, net4.4    12.1   
    Treasury stock sales4.7    2.8   
    Other(0.5)  (0.5) 
    Cash flows used in financing activities(545.2)  (38.7) 
        
    Effect of foreign currency exchange rate changes on cash(2.4)  (18.1) 
        
    Net increase in cash and cash equivalents22.7    290.1   
        
    Cash and cash equivalents, beginning of period308.3    709.7   
        
    Cash and cash equivalents, end of period$331.0    $999.8   
              

    Contact Information:
    Investor Relations
    941-556-2601
    investor-relations@ropertech.com


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