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Contact Information: Investor Relations 941-556-2601 investor-relations@ropertech.com | ![]() Roper Technologies, Inc. |
Table 1: Adjusted Revenue Reconciliation and Growth Detail ($M) | ||||||||||
Q3 2017 | Q3 2018 | V % | ||||||||
GAAP Revenue | $ | 1,160 | $ | 1,319 | 14 | % | ||||
Purchase accounting adjustment to acquired deferred revenue | 12 | 2 | A | |||||||
Adjusted Revenue | $ | 1,171 | $ | 1,321 | 13 | % | ||||
Components of Adjusted Revenue Growth | ||||||||||
Organic | 9 | % | ||||||||
Acquisitions | 5 | % | ||||||||
Rounding | (1 | )% | ||||||||
Total Adjusted Revenue Growth | 13 | % | ||||||||
Table 2: Adjusted Gross Margin Reconciliation ($M) | ||||||||||
Q3 2017 | Q3 2018 | V% / Bps | ||||||||
GAAP Revenue | $ | 1,160 | $ | 1,319 | 14 | % | ||||
Purchase accounting adjustment to acquired deferred revenue | 12 | 2 | A | |||||||
Adjusted Revenue | $ | 1,171 | $ | 1,321 | 13 | % | ||||
GAAP Gross Profit | $ | 726 | $ | 840 | ||||||
Purchase accounting adjustment to acquired deferred revenue | 12 | 2 | A | |||||||
Adjusted Gross Profit | $ | 738 | $ | 842 | 14 | % | ||||
GAAP Gross Margin | 62.6 | % | 63.7 | % | +110 bps | |||||
Adjusted Gross Margin | 63.0 | % | 63.8 | % | +80 bps | |||||
Table 3: Adjusted EBITDA Reconciliation ($M) | ||||||||||
Q3 2017 | Q3 2018 | V% / Bps | ||||||||
GAAP Revenue | $ | 1,160 | $ | 1,319 | 14 | % | ||||
Purchase accounting adjustment to acquired deferred revenue | 12 | 2 | A | |||||||
Adjusted Revenue | $ | 1,171 | $ | 1,321 | 13 | % | ||||
GAAP Net Earnings | 190 | 248 | ||||||||
Taxes | 74 | 64 | ||||||||
Interest Expense | 46 | 48 | ||||||||
Depreciation | 12 | 12 | ||||||||
Amortization | 74 | 83 | ||||||||
EBITDA | $ | 397 | $ | 455 | 15 | % | ||||
Purchase accounting adjustment to acquired deferred revenue | 12 | 2 | A | |||||||
Purchase accounting adjustment for commission expense | (1 | ) | — | |||||||
Debt extinguishment charge B | — | 16 | ||||||||
Adjusted EBITDA | $ | 407 | $ | 473 | 16 | % | ||||
% of Adjusted Revenue | 34.8 | % | 35.8 | % | +100 bps |
Table 4: Adjusted Earnings Before Taxes Reconciliation ($M) | ||||||||||
Q3 2017 | Q3 2018 | V % | ||||||||
GAAP Earnings Before Taxes | $ | 265 | $ | 312 | 18 | % | ||||
Purchase accounting adjustment to acquired deferred revenue | 12 | 2 | A | |||||||
Purchase accounting adjustment for commission expense | (1 | ) | — | |||||||
Amortization of acquisition-related intangible assets C | 73 | 82 | ||||||||
Debt extinguishment charge B | — | 16 | ||||||||
Adjusted Earnings Before Taxes | $ | 348 | $ | 411 | 18 | % |
Table 5: Adjusted DEPS Reconciliation D | ||||||||||
Q3 2017 | Q3 2018 | V % | ||||||||
GAAP DEPS | $ | 1.84 | $ | 2.37 | 29 | % | ||||
Purchase accounting adjustment to acquired deferred revenue | 0.07 | 0.02 | A | |||||||
Purchase accounting adjustment for commission expense | (0.01 | ) | — | |||||||
Amortization of acquisition-related intangible assets C | 0.46 | 0.62 | ||||||||
Measurement period adjustment to 2017 provisional income tax amounts resulting from the Tax Cuts and Jobs Act E | — | (0.03 | ) | |||||||
Debt extinguishment charge B | — | 0.12 | ||||||||
Rounding | — | (0.01 | ) | |||||||
Adjusted DEPS | $ | 2.36 | $ | 3.09 | 31 | % |
Table 6: Free Cash Flow Reconciliation ($M) | ||||||||||
Q3 2017 | Q3 2018 | V % | ||||||||
Operating Cash Flow | $ | 316 | $ | 418 | 32 | % | ||||
Capital Expenditures | (11 | ) | (11 | ) | ||||||
Capitalized Software Expenditures | (2 | ) | (3 | ) | ||||||
Free Cash Flow | $ | 302 | $ | 404 | 34 | % |
Table 7: Forecasted Adjusted DEPS Reconciliation D | |||||||||||||||
Q4 2018 | Full Year 2018 | ||||||||||||||
Low End | High End | Low End | High End | ||||||||||||
GAAP DEPS | $ | 2.48 | $ | 2.52 | $ | 9.06 | $ | 9.10 | |||||||
Purchase accounting adjustments to acquired deferred revenue and commissions F | 0.01 | 0.01 | 0.06 | 0.06 | |||||||||||
Amortization of acquisition-related intangible assets C | 0.61 | 0.61 | 2.37 | 2.37 | |||||||||||
Debt extinguishment charge B | — | — | 0.12 | 0.12 | |||||||||||
Recognition of deferred tax expense due to held-for-sale classification of Gatan G | — | — | 0.10 | 0.10 | |||||||||||
Measurement period adjustment to 2017 provisional income tax amounts resulting from the Tax Cuts and Jobs Act E | — | — | (0.02 | ) | (0.02 | ) | |||||||||
Adjustments to 2017 provisional income tax amounts resulting from the Tax Cuts and Jobs Act | TBD | TBD | TBD | TBD | |||||||||||
Adjusted DEPS | $ | 3.10 | $ | 3.14 | $ | 11.69 | $ | 11.73 |
A. | Acquisition-related fair value adjustment to deferred revenue related to the acquisitions of Onvia and PowerPlan ($2M pretax, $2M after-tax). |
B. | Debt extinguishment charge ($16M pretax, $13M after-tax) related to the early redemption of 2019 Senior Notes. |
C. | Actual results and forecast of estimated amortization of acquisition-related intangible assets ($M, except per share data); for comparison purposes, prior period amounts are also shown below. Tax rate of 35% applied to amortization in 2017, and tax rate of 21% applied to amortization in 2018. |
Q3 2017A | Q3 2018A | Q4 2018E | FY 2018E | ||||||||||||
Pretax | $ | 73 | $ | 82 | $ | 81 | $ | 314 | |||||||
After-tax | $ | 48 | $ | 65 | $ | 64 | $ | 248 | |||||||
Per share | $ | 0.46 | $ | 0.62 | $ | 0.61 | $ | 2.37 |
D. | All 2017 adjustments taxed at 35%, all 2018 adjustments taxed at 21%. |
E. | Measurement period adjustment of $3 million for Q3 2018 and $2 million for the full year 2018 to 2017 provisional income tax amounts resulting from the Tax Cuts and Jobs Act. |
F. | Forecasted acquisition-related fair value adjustments to acquired deferred revenue and commissions of Onvia and PowerPlan, as shown below ($M, except per share data). |
Q4 2018E | FY 2018E | ||||||
Pretax | $ | 1 | $ | 7 | |||
After-tax | $ | 1 | $ | 6 | |||
Per Share | $ | 0.01 | $ | 0.06 |
G. | Recognition of $10 million deferred tax expense due to held-for-sale classification of Gatan. |
Roper Technologies, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets (unaudited) | |||||||
(Amounts in millions) | |||||||
September 30, 2018 | December 31, 2017 | ||||||
ASSETS: | |||||||
Cash and cash equivalents | $ | 363.4 | $ | 671.3 | |||
Accounts receivable, net | 671.7 | 641.7 | |||||
Inventories, net | 212.2 | 204.9 | |||||
Income taxes receivable | 48.8 | 24.4 | |||||
Unbilled receivables | 176.1 | 143.6 | |||||
Other current assets | 83.3 | 73.5 | |||||
Current assets held for sale | 52.5 | — | |||||
Total current assets | 1,608.0 | 1,759.4 | |||||
Property, plant and equipment, net | 130.2 | 142.5 | |||||
Goodwill | 9,401.3 | 8,820.3 | |||||
Other intangible assets, net | 3,887.0 | 3,475.2 | |||||
Deferred taxes | 27.4 | 30.7 | |||||
Other assets | 102.0 | 88.3 | |||||
Assets held for sale | 89.2 | — | |||||
Total assets | $ | 15,245.1 | $ | 14,316.4 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||
Accounts payable | $ | 163.7 | $ | 171.1 | |||
Accrued compensation | 203.3 | 198.0 | |||||
Deferred revenue | 613.8 | 566.4 | |||||
Other accrued liabilities | 259.7 | 266.6 | |||||
Income taxes payable | 45.0 | 26.4 | |||||
Current portion of long-term debt, net | 801.6 | 800.9 | |||||
Current liabilities held for sale | 32.2 | — | |||||
Total current liabilities | 2,119.3 | 2,029.4 | |||||
Long-term debt, net of current portion | 4,414.3 | 4,354.6 | |||||
Deferred taxes | 958.2 | 829.6 | |||||
Other liabilities | 196.8 | 239.2 | |||||
Liabilities held for sale | 1.6 | — | |||||
Total liabilities | 7,690.2 | 7,452.8 | |||||
Common stock | 1.1 | 1.0 | |||||
Additional paid-in capital | 1,733.6 | 1,602.9 | |||||
Retained earnings | 6,038.4 | 5,464.6 | |||||
Accumulated other comprehensive loss | (199.6 | ) | (186.2 | ) | |||
Treasury stock | (18.6 | ) | (18.7 | ) | |||
Total stockholders' equity | 7,554.9 | 6,863.6 | |||||
Total liabilities and stockholders' equity | $ | 15,245.1 | $ | 14,316.4 |
Roper Technologies, Inc. and Subsidiaries | ||||||||||||||||
Condensed Consolidated Statements of Earnings (unaudited) | ||||||||||||||||
(Amounts in millions, except per share data) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net revenues | $ | 1,318.7 | $ | 1,159.9 | $ | 3,814.9 | $ | 3,380.9 | ||||||||
Cost of sales | 478.7 | 433.5 | 1,408.5 | 1,281.2 | ||||||||||||
Gross profit | 840.0 | 726.4 | 2,406.4 | 2,099.7 | ||||||||||||
Selling, general and administrative expenses | 462.5 | 415.6 | 1,374.4 | 1,236.4 | ||||||||||||
Income from operations | 377.5 | 310.8 | 1,032.0 | 863.3 | ||||||||||||
Interest expense, net | 48.4 | 45.5 | 134.8 | 137.2 | ||||||||||||
Loss on debt extinguishment | 15.9 | — | 15.9 | — | ||||||||||||
Other income/(expense), net | (1.6 | ) | (0.7 | ) | (1.0 | ) | 5.2 | |||||||||
Earnings before income taxes | 311.6 | 264.6 | 880.3 | 731.3 | ||||||||||||
Income taxes | 64.0 | 74.3 | $ | 193.0 | 203.4 | |||||||||||
Net earnings | $ | 247.6 | $ | 190.3 | $ | 687.3 | $ | 527.9 | ||||||||
Net earnings per share: | ||||||||||||||||
Basic | $ | 2.39 | $ | 1.86 | $ | 6.66 | $ | 5.17 | ||||||||
Diluted | $ | 2.37 | $ | 1.84 | $ | 6.58 | $ | 5.11 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 103.4 | 102.3 | 103.2 | 102.1 | ||||||||||||
Diluted | 104.6 | 103.7 | 104.4 | 103.4 |
Roper Technologies, Inc. and Subsidiaries | |||||||||||||||||||||||||||
Selected Segment Financial Data (unaudited) | |||||||||||||||||||||||||||
(Amounts in millions and percents of net revenues) | |||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||
RF Technology | $ | 560.4 | $ | 480.6 | $ | 1,579.4 | $ | 1,370.7 | |||||||||||||||||||
Medical & Scientific Imaging | 380.0 | 343.6 | 1,120.0 | 1,042.6 | |||||||||||||||||||||||
Industrial Technology | 229.5 | 200.4 | 677.2 | 576.7 | |||||||||||||||||||||||
Energy Systems & Controls | 148.8 | 135.3 | 438.3 | 390.9 | |||||||||||||||||||||||
Total | $ | 1,318.7 | $ | 1,159.9 | $ | 3,814.9 | $ | 3,380.9 | |||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||
RF Technology | $ | 363.5 | 64.9 | % | $ | 298.9 | 62.2 | % | $ | 1,009.6 | 63.9 | % | $ | 830.1 | 60.6 | % | |||||||||||
Medical & Scientific Imaging | 273.2 | 71.9 | % | 247.1 | 71.9 | % | 799.8 | 71.4 | % | 753.1 | 72.2 | % | |||||||||||||||
Industrial Technology | 117.0 | 51.0 | % | 102.1 | 50.9 | % | 344.4 | 50.9 | % | 293.4 | 50.9 | % | |||||||||||||||
Energy Systems & Controls | 86.3 | 58.0 | % | 78.3 | 57.9 | % | 252.6 | 57.6 | % | 223.1 | 57.1 | % | |||||||||||||||
Total | $ | 840.0 | 63.7 | % | $ | 726.4 | 62.6 | % | $ | 2,406.4 | 63.1 | % | $ | 2,099.7 | 62.1 | % | |||||||||||
Operating profit*: | |||||||||||||||||||||||||||
RF Technology | $ | 165.6 | 29.6 | % | $ | 134.2 | 27.9 | % | $ | 443.5 | 28.1 | % | $ | 342.7 | 25.0 | % | |||||||||||
Medical & Scientific Imaging | 132.8 | 34.9 | % | 115.5 | 33.6 | % | 379.1 | 33.8 | % | 356.6 | 34.2 | % | |||||||||||||||
Industrial Technology | 74.2 | 32.3 | % | 62.2 | 31.0 | % | 214.0 | 31.6 | % | 174.1 | 30.2 | % | |||||||||||||||
Energy Systems & Controls | 46.3 | 31.1 | % | 36.4 | 26.9 | % | 123.4 | 28.2 | % | 99.5 | 25.5 | % | |||||||||||||||
Total | $ | 418.9 | 31.8 | % | $ | 348.3 | 30.0 | % | $ | 1,160.0 | 30.4 | % | $ | 972.9 | 28.8 | % | |||||||||||
*Segment operating profit is before unallocated corporate general and administrative expenses. These expenses were $41.4 and $37.5 for the three months ended September 30, 2018 and 2017, respectively, and $128.0 and $109.6 for the nine months ended September 30, 2018 and 2017, respectively. |
Roper Technologies, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||
(Amounts in millions) | ||||||||
Nine months ended September 30, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 687.3 | $ | 527.9 | ||||
Adjustments to reconcile net earnings to cash flows from operating activities: | ||||||||
Depreciation and amortization of property, plant and equipment | 37.3 | 36.8 | ||||||
Amortization of intangible assets | 235.6 | 221.5 | ||||||
Amortization of deferred financing costs | 4.6 | 5.4 | ||||||
Non-cash stock compensation | 81.1 | 67.6 | ||||||
Loss on debt extinguishment | 15.9 | — | ||||||
Gain on sale of assets | — | (9.4 | ) | |||||
Changes in operating assets and liabilities, net of acquired businesses: | ||||||||
Accounts receivable | (30.1 | ) | 30.1 | |||||
Unbilled receivables | (20.1 | ) | (27.2 | ) | ||||
Inventories | (30.4 | ) | (19.6 | ) | ||||
Accounts payable and accrued liabilities | 17.6 | 48.3 | ||||||
Deferred revenue | 32.4 | 50.6 | ||||||
Income taxes | (59.3 | ) | (48.4 | ) | ||||
Other, net | (5.9 | ) | (17.9 | ) | ||||
Cash provided by operating activities | 966.0 | 865.7 | ||||||
Cash flows from investing activities: | ||||||||
Acquisitions of businesses, net of cash acquired | (1,188.3 | ) | (88.1 | ) | ||||
Capital expenditures | (34.2 | ) | (35.9 | ) | ||||
Capitalized software expenditures | (7.2 | ) | (8.0 | ) | ||||
Proceeds from sale of assets | — | 10.6 | ||||||
Other, net | (0.7 | ) | (6.9 | ) | ||||
Cash used in investing activities | (1,230.4 | ) | (128.3 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from senior notes | 1,500.0 | — | ||||||
Payment of senior notes | (500.0 | ) | — | |||||
Payments under revolving line of credit, net | (930.0 | ) | (880.0 | ) | ||||
Debt issuance costs | (12.8 | ) | — | |||||
Redemption premium for debt extinguishment | (15.5 | ) | — | |||||
Cash dividends to stockholders | (126.7 | ) | (106.5 | ) | ||||
Proceeds from stock-based compensation, net | 46.6 | 32.9 | ||||||
Treasury stock sales | 4.1 | 3.2 | ||||||
Other | (6.5 | ) | 0.2 | |||||
Cash used in financing activities | (40.8 | ) | (950.2 | ) | ||||
Effect of foreign currency exchange rate changes on cash | (2.7 | ) | 61.2 | |||||
Net decrease in cash and cash equivalents | (307.9 | ) | (151.6 | ) | ||||
Cash and cash equivalents, beginning of period | 671.3 | 757.2 | ||||||
Cash and cash equivalents, end of period | $ | 363.4 | $ | 605.6 |
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