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 Roper Technologies Announces 2016 Financial Results
   Thursday, February 09, 2017 6:55:00 AM ET

Roper Technologies, Inc. (ROP ), a diversified technology company, reported financial results for the fourth quarter and full year ended December 31, 2016.

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

Fourth quarter GAAP diluted earnings per share (DEPS) were $1.78 and adjusted diluted earnings per share were $1.86. GAAP revenue and adjusted revenue each increased 7% to $1.011 billion and $1.018 billion, respectively. Orders increased 17% to $1.085 billion. Compared to the prior year, GAAP gross margin increased 60 basis points to 62.0% and adjusted gross margin increased 50 basis points to 62.3%. Operating cash flow in the quarter was $270 million.

"We are very pleased with our fourth quarter performance," said Brian Jellison, Roper’s Chairman, President and CEO. "The execution of our strategies continued to deliver impressive cash flow results as full year adjusted operating cash flow exceeded $1 billion for the first time. Revenue increased 7%, including 2% organic growth, and we delivered a record $365 million of EBITDA in the quarter, representing 36% of revenue. Importantly, fourth quarter orders increased 17% to a record $1.1 billion and our book-to-bill ratio was 1.07, giving us confidence as we enter 2017."

Full year GAAP diluted earnings per share were $6.43, a 6% decrease, and adjusted diluted earnings per share were $6.57, a 2% decrease. GAAP revenue increased 6% to $3.79 billion and adjusted revenue increased 6% to $3.81 billion. Full year EBITDA was $1.31 billion, or 34.6% of adjusted revenue. Operating cash flow increased 4% to $964 million and adjusted operating cash flow increased 8% to $1.001 billion, representing 26% of revenue.

"This was a transformational year for Roper on many levels," said Mr. Jellison. "We invested $3.7 billion in software acquisitions during the year, of which $3.4 billion was deployed during the fourth quarter to acquire two exceptional software companies: ConstructConnect and Deltek. Both businesses have favorable end market dynamics, terrific cash characteristics, substantial recurring revenue and outstanding leadership teams. Like many of our software businesses, ConstructConnect and Deltek operate with negative working capital, further accelerating our transformation as an asset-light, diversified technology company. Including these acquisitions, our software and network businesses are expected to contribute 50% of our EBITDA in 2017."

2017 Outlook and Guidance

Beginning in 2017, the Company’s adjusted DEPS results and guidance will also exclude after-tax acquisition-related intangible amortization. The Company believes reporting adjusted DEPS in this manner better reflects its core operating results and offers greater consistency and transparency. A full reconciliation between GAAP and adjusted measures is included at the end of this release.

Roper expects 2017 full year adjusted DEPS between $8.82 and $9.22 with first quarter adjusted DEPS between $1.92 and $2.00. Full year adjusted revenue is expected to increase between 20% and 22% including organic revenue growth between 3% and 5%.

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

Conference Call to be Held at 8:30 AM (ET) Today

A conference call to discuss these results and 2017 guidance has been scheduled for 8:30 AM ET on Thursday, February 9, 2017. The call can be accessed via webcast or by dialing +1 719-457-2604 (US/Canada) or +1 888-293-6979, using confirmation code 3201363. 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 by using the following URL https://www.webcaster4.com/Webcast/Page/866/19414. Telephonic replays will be available for up to two weeks and can be accessed by using the following URL https://event.replay with access code 3201363.

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:  Revenue Growth Detail ($M)
                                      Q4 2016   Q4 2015   V %
GAAP Revenue                          $ 1,011   $ 944     7%
Purchase accounting adjustment to     7       A 4       B
acquired deferred revenueA,B
Adjusted Revenue                      $ 1,018   $ 948     7%
Components of Adjusted Revenue Growth
Organic                                                   2%
Acquisitions                                              7%
Foreign Exchange                                          (1%)
Rounding                                                  (1%)
Total Adjusted Revenue Growth                             7%
Table 2:  Reconciliation of Q4 2016 GAAP DEPS to Adjusted DEPS
                                                    Q4 2016        Q4 2015
GAAP Diluted Earnings Per Share (DEPS)              $ 1.78         $ 2.05
Purchase accounting adjustment to acquired deferred 0.05         A 0.03         B
revenueA,B
Gain on sale of divested businessC                  -              (0.33)       C
Impairment charge on minority investmentD           -              0.06         D
Acquisition-related inventory step-up chargeE       -              0.02         E
Acquisition-related expenses deemed significantF    0.04         F
Rounding                                            (0.01)         (0.01)
Adjusted DEPS                                       $ 1.86         $ 1.82
Table 3:  Reconciliation of Full Year 2016 GAAP DEPS to Adjusted DEPS ($M)
                                                    FY 2016        FY 2015        V%
GAAP Diluted Earnings Per Share (DEPS)              $ 6.43         $ 6.85         (6%)
Gain on sale of divested businessC                  -              (0.33)       C
Impairment charge on minority investmentD           -              0.06         D
Acquisition-related expenses deemed significantF    0.04         F
Purchase accounting adjustment to acquired deferred 0.10         G 0.07         H
revenueG,H
Acquisition-related inventory step-up chargeI,J     0.00         I 0.03         J
Debt extinguishment chargeK                         0.01         K -
Rounding                                            (0.01)         -
Adjusted DEPS                                       $ 6.57         $ 6.68         (2%)
Table 4:  Free Cash Flow Reconciliation ($M)
                                        2016     2015     V %
GAAP Operating Cash Flow                $ 964    $ 929    + 4%
Cash taxes related to 2015 sale of Abel 37       -
Pump
Adjusted Operating Cash Flow            $ 1,001  $ 929    + 8%
Capital expenditures                    (37)     (36)
Capitalized software expenditures       (3)      (2)
Rounding                                -        (1)
Adjusted Free Cash Flow                 $ 961    $ 890    + 8%
Table 5:  Adjusted Gross Margin Reconciliation (M)
                                              Q4 2016    Q4 2015    V %
GAAP Revenue                                  $ 1,011    $ 944      7%
Purchase accounting adjustment to             7        A 4        B
acquired deferred revenueA,B
Adjusted Revenue                              $ 1,018    $ 948      7%
GAAP Gross Margin                             $ 627      $ 579
Purchase accounting adjustment to             7        A 4        B
acquired deferred revenueA,B
Acquisition-related inventory step-up chargeE -          3        E
Adjusted Gross Margin                         $ 634      $ 586
GAAP Gross Margin                             62.0%      61.4%      + 60 bps
Adjusted Gross Margin                         62.3%      61.8%      + 50 bps
Table 6:  Q4 and Full Year EBITDA Reconciliation ($M)
                                                      Q4 2016      FY 2016
GAAP Revenue                                          $1,011       $ 3,790
Purchase accounting adjustment to acquired deferred   7          A 15         G
revenueA,G
Adjusted Revenue                                      $1,018       $ 3,805
GAAP Net Earnings                                     $ 182.1      $ 658.6
Taxes                                                 76.2         282.0
Interest expense                                      30.5         111.6
Depreciation                                          9.3          37.3
Amortization                                          54.0         203.2
Acquisition-related expenses deemed significantF      6.1          6.1        F
Purchase accounting adjustment to acquired deferred   7.1        A 15.1       G
revenue, pretaxA,G
Acquisition-related inventory step-up charge, pretaxI -            0.3        I
Debt extinguishment chargeK                           -            0.9        K
Rounding                                              -            (0.1)
Adjusted EBITDA                                       $ 365.3      $ 1,315.0
% of Adjusted Revenue                                 35.9%        34.6%
Table 7:  Forecasted Diluted Earnings Per Share (DEPS)
                                    Q1 2017              Full Year 2017
                                    Low End   High End   Low End   High End
GAAP DEPS                           $ 1.34    $ 1.42     $ 6.68    $ 7.08
Purchase accounting adjustments to  0.13    L 0.13     L 0.32    L 0.32     L
acquired deferred revenue and
commissionsL
Amortization of acquisition-related 0.45    M 0.45     M 1.82    M 1.82     M
intangible assets, after-taxM
Adjusted DEPS                       $ 1.92    $ 2.00     $ 8.82    $ 9.22
A Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of Atlas
  Medical ($30k pretax, $20k after-tax), CliniSys ($0.2M pretax, $0.1M after-tax), ConstructConnect
  ($5.9M pretax, $3.9M after-tax) and Deltek ($1.1M pretax, $0.7M after-tax).
B Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of Strata
  ($0.7M pretax, $0.4M after-tax), Softwriters ($0.1M pretax, $0.0M after-tax), Data Innovations ($1.0m
  pre-tax, $0.7M after-tax), On Center Software ($0.4M pretax, $0.3M after-tax), Aderant ($1.8M pretax,
  $1.2M after-tax) and Atlas Medical ($0.1M pretax, $0.0M after-tax)
C Gain on sale of Abel Pumps, LP ($70.9M pretax, $33.4M after-tax)
D Impairment charge on minority investment ($9.5M pretax, $6.2M after-tax)
E Acquisition-related inventory step-up charge related to the acquisition of RFIdeas ($2.6M pretax,
  $1.7M after-tax)
F Acquisition-related expenses deemed significant, primarily related to the acquisitions of
  ConstructConnect and Deltek ($6.1M pretax, $4.0M after-tax)
G Acquisition-related fair value adjustments to acquired deferred revenue of Strata ($0.2M pretax,
  $0.1M after-tax), Data Innovations ($0.7M pretax, $0.4M after-tax), On Center Software ($0.9M
  pretax, $0.6M after-tax), Aderant ($5.4M pretax, $3.5M after-tax), Atlas Medical ($0.3M pretax, $0.2M
  after-tax), CliniSys ($0.7M pretax, $0.4M after-tax), ConstructConnect ($5.9M pretax, $3.9M after-tax)
  and Deltek ($1.1M pretax, $0.7M after-tax).
H Acquisition-related fair value adjustments to acquired deferred revenue of SHP ($1.7M pretax, $1.1M
  after-tax), FoodLink ($0.4M pretax, $0.2M after-tax), Strata ($2.5M pretax, $1.6M after-tax),
  Softwriters ($0.2M pretax, $0.2M after-tax), Data Innovations ($3.4M pretax, $2.2M after-tax), On
  Center Software ($0.6M pretax, $0.4M after-tax), Aderant ($1.8M pretax, $1.2M after-tax) and Atlas
  Medical ($0.1M pretax, $0.0M after-tax)
I Acquisition-related inventory step-up charge related to the acquisition of PCI Medical ($0.3M pretax,
  $0.2M after-tax)
J Acquisition related inventory step-up charge related to the acquisition of RFIdeas ($4.6M pretax,
  $3.0M after-tax)
K Debt extinguishment charge from the early replacement of the Company’s credit agreement in
  September, 2016 ($0.9M pretax, $0.6M after-tax)
L Forecasted acquisition-related fair value adjustments to acquired deferred revenue and commissions
  of ConstructConnect and Deltek, as shown below ($M, except per share data)
            Q1 2017  FY 2017
  Pretax    $ 20     $ 52
  After-tax $ 13     $ 33
  Per Share $ 0.13   $ 0.32
M Forecast of estimated amortization of acquisition-related intangible assets in the following periods
  ($M). For comparison purposes, prior period amounts are also shown below.
            Q1 2016  FY 2016  Q1 2017  FY 2017
  Pretax    $ 49     $ 201    $ 72     $ 288
  After-tax $ 32     $ 131    $ 47     $ 187
  Per share $ 0.31   $ 1.27   $ 0.45   $ 1.82

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 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, 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, 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)
                                                  December 31,      December 31,
ASSETS                                            2016              2015
CURRENT ASSETS:
Cash and cash equivalents                         $        757,200  $        778,511
Accounts receivable                               619,854           488,271
Inventories                                       181,952           189,868
Unbilled receivable                               129,965           122,042
Other current assets                              87,530            39,355
Total current assets                              1,776,501         1,618,047
PROPERTY, PLANT AND EQUIPMENT, NET                141,318           105,510
OTHER ASSETS:
Goodwill and other intangible assets, net         12,302,985        8,353,722
Deferred taxes                                    30,620            31,532
Other assets                                      73,503            59,554
Total other assets                                12,407,108        8,444,808
TOTAL ASSETS                                      $    14,324,927   $    10,168,365
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable                                  $        152,067  $        139,737
Accrued compensation                              161,730           119,511
Deferred revenue                                  488,399           267,030
Other accrued liabilities                         219,339           168,513
Income taxes payable                              22,762            18,532
Current portion of long-term debt                 400,975           6,805
Total current liabilities                         1,445,272         720,128
NONCURRENT LIABILITIES:
Long-term debt                                    5,808,561         3,264,417
Deferred taxes                                    1,178,205         810,856
Other liabilities                                 104,024           74,017
Total liabilities                                 8,536,062         4,869,418
STOCKHOLDERS’ EQUITY:
Common stock                                      1,036             1,028
Additional paid-in capital                        1,489,067         1,419,262
Retained earnings                                 4,642,402         4,110,530
Accumulated other comprehensive earnings          (324,739)         (212,779)
Treasury stock                                    (18,901)          (19,094)
Total stockholders’ equity                        5,788,865         5,298,947
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY        $    14,324,927   $    10,168,365
Roper Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in thousands, except per share data)
                                               Three months ended           Twelve months ended
                                               December 31,                 December 31,
                                               2016           2015          2016              2015
Net sales                                      $1,010,800     $  943,640    $   3,789,925     $  3,582,395
Cost of sales                                  383,922        364,549       1,457,515         1,417,749
Gross profit                                   626,878        579,091       2,332,410         2,164,646
Selling, general and administrative expenses   337,774        300,414       1,277,847         1,136,728
Income from operations                         289,104        278,677       1,054,563         1,027,918
Interest expense                               30,483         23,843        111,559           84,225
Other income/(expense)                         (355)          60,600        (2,352)           58,652
Earnings from continuing operations before
income taxes                                   258,266        315,434       940,652           1,002,345
Income taxes                                   76,185         106,837       282,007           306,278
Net Earnings                                   $   182,081    $  208,597    $     658,645     $     696,067
Earnings per share:
Basic                                          $        1.79  $       2.07  $           6.50  $          6.92
Diluted                                        $        1.78  $       2.05  $           6.43  $          6.85
Weighted average common and common
equivalent shares outstanding:
Basic                                          101,469        100,829       101,291           100,616
Diluted                                        102,580        101,833       102,464           101,597
Roper Technologies, Inc. and Subsidiaries
Selected Segment Financial Data (unaudited)
(Amounts in thousands and percents of net sales)
                              Three months ended December 31,          Twelve months ended December 31,
                              2016                 2015                2016                 2015
                              Amount       %       Amount      %       Amount       %       Amount       %
Net sales:
Medical & Scientific Imaging  $   351,987          $  321,735          $1,362,813           $1,215,318
RF Technology                 337,728              281,883             1,210,264            1,033,951
Industrial Technology         178,446              182,039             706,625              745,381
Energy Systems & Controls     142,639              157,983             510,223              587,745
Total                         $1,010,800           $  943,640          $3,789,925           $3,582,395
Gross profit:
Medical & Scientific Imaging  $   256,941  73.0%   $  238,804  74.2%   $   997,666  73.2%   $   899,775  74.0%
RF Technology                 193,430      57.3%   154,731     54.9%   685,923      56.7%   552,605      53.4%
Industrial Technology         90,683       50.8%   89,842      49.4%   357,362      50.6%   370,894      49.8%
Energy Systems & Controls     85,824       60.2%   95,714      60.6%   291,459      57.1%   341,372      58.1%
Total                         $   626,878  62.0%   $  579,091  61.4%   $2,332,410   61.5%   $2,164,646   60.4%
Operating profit*:
Medical & Scientific Imaging  $   129,842  36.9%   $  116,492  36.2%   $   477,548  35.0%   $   441,931  36.4%
RF Technology                 99,562       29.5%   83,591      29.7%   372,467      30.8%   312,112      30.2%
Industrial Technology         51,601       28.9%   52,155      28.7%   202,451      28.7%   214,538      28.8%
Energy Systems & Controls     45,874       32.2%   51,704      32.7%   129,602      25.4%   162,128      27.6%
Total                         $   326,879  32.3%   $  303,942  32.2%   $1,182,068   31.2%   $1,130,709   31.6%
Net Orders:
Medical & Scientific Imaging  $   384,097          $  334,967          $1,399,007           $1,235,143
RF Technology                 378,587              273,856             1,278,246            1,024,999
Industrial Technology         175,993              176,379             704,622              731,810
Energy Systems & Controls     146,008              138,869             514,300              555,672
Total                         $1,084,685           $  924,071          $3,896,175           $3,547,624
*  Operating profit is before unallocated corporate general and administrative expenses.  These expenses
were $37,775 and $25,265 for the three months ended December 31, 2016 and 2015, respectively, and
$127,505 and $102,791 for the twelve months ended December 31, 2016 and 2015, respectively.
Roper Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
                                                 Twelve months ended
                                                 December 31,
                                                 2016          2015
Net earnings                                     $    658,645  $    696,067
Non-cash items:
Depreciation                                     37,299        38,185
Amortization                                     203,154       166,076
Stock-based compensation expense                 78,827        61,766
Gain on disposal of a business                   -             (70,860)
Income taxes                                     (47,589)      3,069
Changes in assets and liabilities:
Receivables                                      (21,936)      30,753
Inventory                                        6,353         (1,150)
Accounts payable                                 6,393         (6,554)
Accrued liabilities                              38,973        6,401
Other, net                                       3,666         5,072
Cash provided by operating activities            963,785       928,825
Business acquisitions, net of cash acquired      (3,721,758)   (1,762,883)
Capital expenditures                             (37,305)      (36,260)
Capitalized software expenditures                (2,801)       (2,439)
Proceeds from disposal of a business             -             105,624
Other, net                                       9,008         (2,374)
Cash used by investing activities                (3,752,856)   (1,698,332)
Principal debt borrowings                        1,200,000     900,000
Principal debt payments                          (4,284)       (4,006)
Revolver borrowings, net                         1,750,000     180,000
Debt issuance costs                              (17,266)      (8,044)
Dividends                                        (121,130)     (100,334)
Excess tax benefit from share-based payment      -             22,228
Proceeds from stock-based compensation, net      9,998         18,312
Redemption premium on convertible debt           (14,166)      (13,126)
Other, net                                       2,111         1,212
Cash provided by financing activities            2,805,263     996,242
Effect of exchange rate changes on cash          (37,503)      (58,654)
Net increase/(decrease) in cash and equivalents  (21,311)      168,081
Cash and equivalents, beginning of year          778,511       610,430
Cash and equivalents, end of year                $    757,200  $    778,511

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/roper-technologies-announces-2016-financial-results-300404672.html

SOURCE Roper Technologies, Inc.

https://rt.prnewswire.com/rt.gif?NewsItemId=CL07897&Transmission_Id=201702090655PR_NEWS_USPR_____CL07897&DateId=20170209



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