(COMMISSION FILE NUMBER) | (IRS EMPLOYER IDENTIFICATION NO.) | ||||||||||
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) | (ZIP CODE) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange On Which Registered | ||||||||||||
99.1 | |||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Roper Technologies, Inc. | |||||||||||||||||||||||
(Registrant) | |||||||||||||||||||||||
By: | /s/ Jason P. Conley | Date: | October 25, 2023 | ||||||||||||||||||||
Jason P. Conley, Executive Vice President and Chief Financial Officer |
Table 1: Revenue and adjusted EBITDA reconciliation ($M) (from continuing operations) | |||||||||||||||||
Q3 2022 | Q3 2023 | V % | |||||||||||||||
GAAP revenue | $ | 1,350 | $ | 1,563 | 16 | % | |||||||||||
Components of revenue growth | |||||||||||||||||
Organic | 6 | % | |||||||||||||||
Acquisitions/divestitures | 9 | % | |||||||||||||||
Foreign exchange | — | % | |||||||||||||||
Revenue growth | 16 | % | |||||||||||||||
Adjusted EBITDA reconciliation | |||||||||||||||||
GAAP net earnings | $ | 277 | $ | 346 | |||||||||||||
Taxes | 78 | 97 | |||||||||||||||
Interest expense | 41 | 42 | |||||||||||||||
Depreciation | 9 | 9 | |||||||||||||||
Amortization | 147 | 182 | |||||||||||||||
EBITDA | $ | 553 | $ | 676 | 22 | % | |||||||||||
Purchase accounting adjustment to acquired commission expense | (1) | — | |||||||||||||||
Restructuring-related expenses associated with the Syntellis acquisition | — | 9 | |||||||||||||||
Transaction-related expenses for completed acquisitions | 3 | 5 | |||||||||||||||
Financial impacts associated with the minority investment in Indicor | — | (34) | A | ||||||||||||||
Gain on sale of non-operating assets | — | (3) | |||||||||||||||
Adjusted EBITDA | $ | 555 | $ | 652 | 18 | % | |||||||||||
% of revenue | 41.1 | % | 41.7 | % | +60 bps |
Table 2: Adjusted DEPS reconciliation (from continuing operations) | |||||||||||||||||
Q3 2022 | Q3 2023 | V % | |||||||||||||||
GAAP DEPS | $ | 2.59 | $ | 3.21 | 24 | % | |||||||||||
Purchase accounting adjustment to acquired commission expense | (0.01) | — | |||||||||||||||
Restructuring-related expenses associated with the Syntellis acquisition | — | 0.06 | |||||||||||||||
Transaction-related expenses for completed acquisitions | 0.02 | 0.03 | |||||||||||||||
Financial impacts associated with the minority investment in Indicor | — | (0.26) | A | ||||||||||||||
Gain on sale of non-operating assets | — | (0.02) | |||||||||||||||
Amortization of acquisition-related intangible assets | 1.06 | 1.30 | B | ||||||||||||||
Adjusted DEPS | $ | 3.67 | $ | 4.32 | 18 | % |
Table 3: Adjusted cash flow reconciliation ($M) (from continuing operations) | ||||||||||||||||||||||||||
Q3 2022 | Q3 2023 | V % | TTM 2023 | |||||||||||||||||||||||
Operating cash flow | $ | 219 | $ | 631 | 188 | % | $ | 1,472 | ||||||||||||||||||
Taxes paid in period related to divestitures | 157 | 16 | C | 435 | ||||||||||||||||||||||
Adjusted operating cash flow | $ | 376 | $ | 647 | 72 | % | $ | 1,908 | ||||||||||||||||||
Capital expenditures | (16) | (13) | (48) | |||||||||||||||||||||||
Capitalized software expenditures | (7) | (9) | (37) | |||||||||||||||||||||||
Adjusted free cash flow | $ | 353 | $ | 625 | 77 | % | $ | 1,823 | ||||||||||||||||||
Table 4: Forecasted adjusted DEPS reconciliation (from continuing operations) | |||||||||||||||||||||||
Q4 2023 | FY 2023 | ||||||||||||||||||||||
Low end | High end | Low end | High end | ||||||||||||||||||||
GAAP DEPS | $ | 2.95 | $ | 2.99 | $ | 12.20 | $ | 12.24 | |||||||||||||||
Restructuring-related expenses associated with the Syntellis acquisition | — | — | 0.06 | 0.06 | |||||||||||||||||||
Transaction-related expenses for completed acquisitions | — | — | 0.03 | 0.03 | |||||||||||||||||||
Financial impacts associated with the minority investment in Indicor A | TBD | TBD | (0.78) | (0.78) | |||||||||||||||||||
Gain on sale of non-operating assets | — | — | (0.02) | (0.02) | |||||||||||||||||||
Amortization of acquisition-related intangible assets B | 1.33 | 1.33 | 5.13 | 5.13 | |||||||||||||||||||
Adjusted DEPS | $ | 4.28 | $ | 4.32 | $ | 16.62 | $ | 16.66 | |||||||||||||||
A. | Adjustments related to the financial impacts associated with the minority investment in Indicor as shown below ($M, except per share data). Forecasted results do not include any potential impacts associated with our minority investments in Indicor nor Certinia as these potential impacts cannot be reasonably predicted, and will be adjusted out of all GAAP results in future periods. | |||||||||||||||||||||||||||||||||||||
Q3 2022A | Q3 2023A | Q4 2023E | FY 2023E | YTD 2023A | ||||||||||||||||||||||||||||||||||
Pretax | $ | — | $ | (34) | TBD | TBD | $ | (99) | ||||||||||||||||||||||||||||||
After-tax | $ | — | $ | (28) | TBD | TBD | $ | (83) | ||||||||||||||||||||||||||||||
Per share | $ | — | $ | (0.26) | TBD | TBD | $ | (0.78) | ||||||||||||||||||||||||||||||
B. | Actual results and forecast of estimated amortization of acquisition-related intangible assets as shown below ($M, except per share data). These adjustments are taxed at 21%. | |||||||||||||||||||||||||||||||||||||
Q3 2022A | Q3 2023A | Q4 2023E | FY 2023E | |||||||||||||||||||||||||||||||||||
Pretax | $ | 144 | $ | 177 | $ | 181 | $ | 698 | ||||||||||||||||||||||||||||||
After-tax | $ | 114 | $ | 140 | $ | 143 | $ | 552 | ||||||||||||||||||||||||||||||
Per share | $ | 1.06 | $ | 1.30 | $ | 1.33 | $ | 5.13 | ||||||||||||||||||||||||||||||
C. | Cash taxes paid in the quarter were associated with Roper's portion of Indicor's gain on the sale of its Compressor Controls business ("CCC") to Honeywell. Roper expects to make the final cash tax payment associated with this transaction in the fourth quarter. |
Roper Technologies, Inc. | |||||||||||
Condensed Consolidated Balance Sheets (unaudited) | |||||||||||
(Amounts in millions) | |||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS: | |||||||||||
Cash and cash equivalents | $ | 299.5 | $ | 792.8 | |||||||
Accounts receivable, net | 746.4 | 724.5 | |||||||||
Inventories, net | 122.5 | 111.3 | |||||||||
Income taxes receivable | 55.2 | 61.0 | |||||||||
Unbilled receivables | 112.1 | 91.5 | |||||||||
Other current assets | 168.8 | 151.3 | |||||||||
Total current assets | 1,504.5 | 1,932.4 | |||||||||
Property, plant and equipment, net | 98.3 | 85.3 | |||||||||
Goodwill | 17,047.6 | 15,946.1 | |||||||||
Other intangible assets, net | 8,343.6 | 8,030.7 | |||||||||
Deferred taxes | 52.1 | 55.9 | |||||||||
Equity investments | 736.4 | 535.0 | |||||||||
Other assets | 405.5 | 395.4 | |||||||||
Total assets | $ | 28,188.0 | $ | 26,980.8 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||||||||
Accounts payable | $ | 135.8 | $ | 122.6 | |||||||
Accrued compensation | 225.3 | 228.8 | |||||||||
Deferred revenue | 1,496.7 | 1,370.7 | |||||||||
Other accrued liabilities | 389.5 | 454.6 | |||||||||
Income taxes payable | 66.1 | 16.6 | |||||||||
Current portion of long-term debt, net | 499.3 | 699.2 | |||||||||
Total current liabilities | 2,812.7 | 2,892.5 | |||||||||
Long-term debt, net of current portion | 6,379.0 | 5,962.5 | |||||||||
Deferred taxes | 1,546.0 | 1,676.8 | |||||||||
Other liabilities | 411.6 | 411.2 | |||||||||
Total liabilities | 11,149.3 | 10,943.0 | |||||||||
Common stock | 1.1 | 1.1 | |||||||||
Additional paid-in capital | 2,723.8 | 2,510.2 | |||||||||
Retained earnings | 14,507.5 | 13,730.7 | |||||||||
Accumulated other comprehensive loss | (176.8) | (187.0) | |||||||||
Treasury stock | (16.9) | (17.2) | |||||||||
Total stockholders’ equity | 17,038.7 | 16,037.8 | |||||||||
Total liabilities and stockholders’ equity | $ | 28,188.0 | $ | 26,980.8 |
Roper Technologies, Inc. | |||||||||||||||||||||||
Condensed Consolidated Statements of Earnings (unaudited) | |||||||||||||||||||||||
(Amounts in millions, except per share data) | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net revenues | $ | 1,563.4 | $ | 1,350.3 | $ | 4,564.3 | $ | 3,940.9 | |||||||||||||||
Cost of sales | 467.1 | 408.5 | 1,382.3 | 1,190.4 | |||||||||||||||||||
Gross profit | 1,096.3 | 941.8 | 3,182.0 | 2,750.5 | |||||||||||||||||||
Selling, general and administrative expenses | 650.2 | 548.6 | 1,899.6 | 1,638.5 | |||||||||||||||||||
Income from operations | 446.1 | 393.2 | 1,282.4 | 1,112.0 | |||||||||||||||||||
Interest expense, net | 42.4 | 41.3 | 114.6 | 138.6 | |||||||||||||||||||
Equity investment activity, net | 33.9 | — | 98.7 | — | |||||||||||||||||||
Other income (expense), net | 5.0 | 3.6 | (0.1) | 0.2 | |||||||||||||||||||
Earnings before income taxes | 442.6 | 355.5 | 1,266.4 | 973.6 | |||||||||||||||||||
Income taxes | 97.0 | 78.6 | 275.5 | 235.3 | |||||||||||||||||||
Net earnings from continuing operations | 345.6 | 276.9 | 990.9 | 738.3 | |||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax | (2.9) | 49.0 | (4.1) | 170.3 | |||||||||||||||||||
Gain on disposition of discontinued operations, net of tax | 4.5 | 1.1 | 8.4 | 1,707.7 | |||||||||||||||||||
Net earnings from discontinued operations | 1.6 | 50.1 | 4.3 | 1,878.0 | |||||||||||||||||||
Net earnings | $ | 347.2 | $ | 327.0 | $ | 995.2 | $ | 2,616.3 | |||||||||||||||
Net earnings per share from continuing operations: | |||||||||||||||||||||||
Basic | $ | 3.23 | $ | 2.61 | $ | 9.30 | $ | 6.97 | |||||||||||||||
Diluted | $ | 3.21 | $ | 2.59 | $ | 9.23 | $ | 6.91 | |||||||||||||||
Net earnings per share from discontinued operations: | |||||||||||||||||||||||
Basic | $ | 0.02 | $ | 0.47 | $ | 0.04 | $ | 17.74 | |||||||||||||||
Diluted | $ | 0.02 | $ | 0.47 | $ | 0.04 | $ | 17.59 | |||||||||||||||
Net earnings per share: | |||||||||||||||||||||||
Basic | $ | 3.25 | $ | 3.08 | $ | 9.34 | $ | 24.71 | |||||||||||||||
Diluted | $ | 3.23 | $ | 3.06 | $ | 9.27 | $ | 24.50 | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 106.7 | 106.0 | 106.5 | 105.9 | |||||||||||||||||||
Diluted | 107.6 | 106.8 | 107.3 | 106.8 |
Roper Technologies, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||
Selected Segment Financial Data (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
(Amounts in millions; percentages of net revenues) | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||
Net revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Application Software | $ | 803.4 | $ | 644.0 | $ | 2,335.1 | $ | 1,899.7 | |||||||||||||||||||||||||||||||||||||||
Network Software | 364.1 | 346.6 | 1,076.7 | 1,028.0 | |||||||||||||||||||||||||||||||||||||||||||
Technology Enabled Products | 395.9 | 359.7 | 1,152.5 | 1,013.2 | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,563.4 | $ | 1,350.3 | $ | 4,564.3 | $ | 3,940.9 | |||||||||||||||||||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||||||||||||||
Application Software | $ | 557.7 | 69.4% | $ | 440.2 | 68.4% | $ | 1,609.2 | 68.9% | $ | 1,306.5 | 68.8% | |||||||||||||||||||||||||||||||||||
Network Software | 310.7 | 85.3% | 293.9 | 84.8% | 914.0 | 84.9% | 867.9 | 84.4% | |||||||||||||||||||||||||||||||||||||||
Technology Enabled Products | 227.9 | 57.6% | 207.7 | 57.7% | 658.8 | 57.2% | 576.1 | 56.9% | |||||||||||||||||||||||||||||||||||||||
Total | $ | 1,096.3 | 70.1% | $ | 941.8 | 69.7% | $ | 3,182.0 | 69.7% | $ | 2,750.5 | 69.8% | |||||||||||||||||||||||||||||||||||
Operating profit*: | |||||||||||||||||||||||||||||||||||||||||||||||
Application Software | $ | 206.9 | 25.8% | $ | 173.8 | 27.0% | $ | 601.3 | 25.8% | $ | 511.4 | 26.9% | |||||||||||||||||||||||||||||||||||
Network Software | 164.4 | 45.2% | 148.1 | 42.7% | 465.0 | 43.2% | 422.0 | 41.1% | |||||||||||||||||||||||||||||||||||||||
Technology Enabled Products | 137.1 | 34.6% | 126.5 | 35.2% | 391.7 | 34.0% | 337.6 | 33.3% | |||||||||||||||||||||||||||||||||||||||
Total | $ | 508.4 | 32.5% | $ | 448.4 | 33.2% | $ | 1,458.0 | 31.9% | $ | 1,271.0 | 32.3% | |||||||||||||||||||||||||||||||||||
* Segment operating profit is before unallocated corporate general and administrative expenses and enterprise-wide stock-based compensation. These expenses were $62.3 and $55.2 for the three months ended September 30, 2023 and 2022, respectively, and $175.6 and $159.0 for the nine months ended September 30, 2023 and 2022, respectively. |
Roper Technologies, Inc. | |||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | |||||||||||
(Amounts in millions) | |||||||||||
Nine months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings from continuing operations | $ | 990.9 | $ | 738.3 | |||||||
Adjustments to reconcile net earnings from continuing operations to cash flows from operating activities: | |||||||||||
Depreciation and amortization of property, plant and equipment | 26.3 | 28.0 | |||||||||
Amortization of intangible assets | 532.8 | 438.4 | |||||||||
Amortization of deferred financing costs | 7.7 | 9.2 | |||||||||
Non-cash stock compensation | 99.2 | 90.8 | |||||||||
Equity investment activity, net | (98.7) | — | |||||||||
Income tax provision | 275.5 | 235.3 | |||||||||
Changes in operating assets and liabilities, net of acquired businesses: | |||||||||||
Accounts receivable | 25.8 | 48.3 | |||||||||
Unbilled receivables | (15.3) | (21.7) | |||||||||
Inventories | (11.2) | (33.6) | |||||||||
Accounts payable | 12.1 | 24.7 | |||||||||
Other accrued liabilities | (72.0) | (59.0) | |||||||||
Deferred revenue | 18.6 | (15.2) | |||||||||
Cash taxes paid for gain on disposal of businesses | (16.4) | (534.6) | |||||||||
Cash income taxes paid, excluding tax associated with gain on disposal of businesses | (335.6) | (397.5) | |||||||||
Other, net | (24.0) | (1.2) | |||||||||
Cash provided by operating activities from continuing operations | 1,415.7 | 550.2 | |||||||||
Cash provided by (used in) operating activities from discontinued operations | (2.4) | 112.7 | |||||||||
Cash provided by operating activities | 1,413.3 | 662.9 | |||||||||
Cash flows from (used in) investing activities: | |||||||||||
Acquisitions of businesses, net of cash acquired | (1,970.1) | (580.9) | |||||||||
Capital expenditures | (37.8) | (30.0) | |||||||||
Capitalized software expenditures | (28.7) | (21.9) | |||||||||
Distributions from equity investment | 25.3 | — | |||||||||
Other, net | 0.6 | (1.8) | |||||||||
Cash used in investing activities from continuing operations | (2,010.7) | (634.6) | |||||||||
Proceeds from disposition of discontinued operations | 2.0 | 2,997.1 | |||||||||
Cash used in investing activities from discontinued operations | — | (4.9) | |||||||||
Cash provided by (used in) investing activities | (2,008.7) | 2,357.6 | |||||||||
Cash flows from (used in) financing activities: | |||||||||||
Payments of senior notes | (700.0) | (800.0) | |||||||||
Borrowings (payments) under revolving line of credit, net | 910.0 | (470.0) | |||||||||
Debt issuance costs | — | (3.9) | |||||||||
Cash dividends to stockholders | (217.5) | (196.2) | |||||||||
Proceeds from stock-based compensation, net | 99.3 | 57.0 | |||||||||
Treasury stock sales | 11.6 | 11.6 | |||||||||
Other | (0.1) | (0.3) | |||||||||
Cash provided by (used in) financing activities from continuing operations | 103.3 | (1,401.8) | |||||||||
Cash used in financing activities from discontinued operations | — | (11.3) | |||||||||
Cash provided by (used in) financing activities | 103.3 | (1,413.1) | |||||||||
(Continued) |
Roper Technologies, Inc. | |||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) - Continued | |||||||||||
(Amounts in millions) | |||||||||||
Nine months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Effect of exchange rate changes on cash | (1.2) | (64.4) | |||||||||
Net increase (decrease) in cash and cash equivalents | (493.3) | 1,543.0 | |||||||||
Cash and cash equivalents, beginning of period | 792.8 | 351.5 | |||||||||
Cash and cash equivalents, end of period | $ | 299.5 | $ | 1,894.5 |