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SARASOTA, Fla., April 26, 2022 (GLOBE NEWSWIRE) — Roper Technologies, Inc. (NYSE: ROP) reported financial results for the first quarter ended March 31, 2022. Unless otherwise noted, the results and guidance in this press release are presented on a continuing operations basis.

First quarter GAAP and adjusted revenue increased 11% to $1.53 billion, with organic revenue also increasing 11%. GAAP diluted earnings per share (“DEPS”) was $2.70, a 6% increase, and adjusted DEPS was $3.77, a 10% increase.

Adjusted EBITDA increased 8% to $577 million and adjusted EBITDA margin was 37.8%. Operating cash flow was $474 million and free cash flow was $459 million.

“We are very pleased with the great start to 2022,” said Neil Hunn, Roper Technologies’ President and CEO. “Organic revenue grew 11% in the quarter with broad-based strength across our portfolio of niche-leading businesses. Our enterprise continues to exhibit strong momentum fueled by double-digit software recurring revenue growth and robust product demand. As a result, we are increasing our full year guidance.”

“Also in the quarter, the quality of our portfolio and business mix improved as we completed the divestiture of our project-based TransCore business. The proceeds from this transaction further enhance our ability to capitalize on our large pipeline of high-quality acquisition candidates,” concluded Mr. Hunn.

Increasing 2022 Guidance

Roper now expects full year 2022 adjusted DEPS of $15.50 – $15.75, compared to previous guidance of $15.25 – $15.55.

For the second quarter of 2022, the Company expects adjusted DEPS of $3.80 – $3.84.

The Company’s guidance excludes the impact of unannounced future acquisitions or divestitures, as well as any redeployment of proceeds from completed divestitures.

Discontinued Operations

Roper has completed the divestitures of the TransCore, Zetec, and CIVCO Radiotherapy businesses. The financial results for these businesses are reported as discontinued operations for all periods presented.

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 Tuesday, April 26, 2022. 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 6309734.

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 and EBITDA Reconciliation ($M)
(From Continuing Operations)
           
  Q1 2021   Q1 2022   V %
Adjusted Revenue Reconciliation          
GAAP Revenue $ 1,376     $ 1,527     11 %
Purchase accounting adjustment to acquired deferred revenue   1            
Adjusted Revenue $ 1,377     $ 1,527     11 %
           
Components of Adjusted Revenue Growth          
Organic         11 %
Acquisitions/Divestitures         1 %
Foreign Exchange         (1)%
Adjusted Revenue Growth         11 %
           
Adjusted EBITDA Reconciliation          
GAAP Net Earnings $ 270     $ 288      
Taxes   71       79      
Interest Expense   61       53      
Depreciation   13       11      
Amortization   146       148      
EBITDA $ 561     $ 578     3 %
           
Purchase accounting adjustment to acquired deferred revenue and commission expense         (1 ) A  
Gain on sale related to minority investment in Sedaru   (28 )          
Adjusted EBITDA $ 533     $ 577     8 %
% of Adjusted Revenue   38.7 %     37.8 %   (90 bps)

Table 2: Adjusted DEPS ReconciliationB
(From Continuing Operations)
         
           
  Q1 2021   Q1 2022   V %
GAAP DEPS $ 2.55     $ 2.70     6 %
Purchase accounting adjustment to acquired deferred revenue and commission expense         (0.01 ) A  
Amortization of acquisition-related intangible assetsC   1.08       1.08      
Gain on sale related to minority investment in Sedaru   (0.21 )          
Adjusted DEPS $ 3.42     $ 3.77     10 %

Table 3: Free Cash Flow Reconciliation ($M)
(From Continuing Operations)
             
  Q1 2021   Q1 2022   V %  
Operating Cash Flow $ 526     $ 474     (10) %
Capital Expenditures   (7 )     (7 )      
Capitalized Software Expenditures   (7 )     (8 )      
Free Cash Flow $ 512     $ 459     (10) %

Table 4: Forecasted Adjusted DEPS ReconciliationB
(From Continuing Operations)
               
  Q2 2022   FY 2022
  Low End   High End   Low End   High End
GAAP DEPS $ 2.74     $ 2.78     $ 11.24     $ 11.49  
Purchase accounting adjustment to acquired commission expenseA   (0.01 )     (0.01 )     (0.03 )     (0.03 )
Amortization of acquisition-related intangible assetsC   1.07       1.07       4.29       4.29  
Adjusted DEPS $ 3.80     $ 3.84     $ 15.50     $ 15.75  

A. 2022 actual results and 2022 forecast of estimated acquisition-related fair value adjustments to commission expense related to the acquisition of Vertafore as shown below ($M, except per share data).
    Q1 2021A   Q1 2022A     Q2 2022E   FY 2022E
  Pretax $   $ (1 )     $ (1 )   $ (5 )
  After-tax $   $ (1 )     $ (1 )   $ (4 )
  Per Share $   $ (0.01 )     $ (0.01 )   $ (0.03 )
                   
B. All 2021 and 2022 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 2021A   Q1 2022A     Q2 2022E   FY 2022E
  Pretax $ 145   $ 146       $ 145     $ 582  
  After-tax $ 115   $ 115       $ 115     $ 459  
  Per share $ 1.08   $ 1.08       $ 1.07     $ 4.29  

Note: Numbers may not foot due to rounding.

About Roper Technologies

Roper Technologies is a constituent of the S&P 500 and Fortune 500. Roper has a proven, long-term track record of compounding cash flow and shareholder value. The Company operates market leading businesses that design and develop vertical software and application-specific products for a variety of defensible niche markets. Roper utilizes a disciplined, analytical, and process-driven approach to redeploy its excess free cash flow toward high-quality acquisitions. Additional information about Roper is available on the Company’s website at www.ropertech.com.

Contact Information:
Investor Relations
941-556-2601
[email protected]

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 any ongoing impacts of the COVID-19 pandemic on our business, operations, financial results and liquidity, which will depend on numerous evolving factors which we cannot accurately predict or assess, including: the duration and scope of the pandemic, new variants of the virus and the distribution and efficacy of vaccines; any 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, as well as complete any announced divestitures, including obtaining any required regulatory approvals with respect thereto. 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, including as a result of the current inflationary environment and ongoing supply chain constraints environmental compliance costs and liabilities, risks and cost associated with 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, 2022   December 31, 2021
ASSETS:      
       
Cash and cash equivalents $ 3,237.5     $ 351.5  
Accounts receivable, net   755.3       839.4  
Inventories, net   202.7       176.1  
Income taxes receivable   19.2       27.7  
Unbilled receivables   110.0       95.3  
Other current assets   160.9       142.5  
Current assets held for sale         788.6  
Total current assets   4,485.6       2,421.1  
       
Property, plant and equipment, net   98.9       102.8  
Goodwill   14,094.9       14,094.5  
Other intangible assets, net   6,454.1       6,588.5  
Deferred taxes   101.4       101.1  
Other assets   400.9       405.9  
Total assets $ 25,635.8     $ 23,713.9  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY:      
       
Accounts payable $ 167.8     $ 150.8  
Accrued compensation   208.2       309.8  
Deferred revenue   1,120.3       1,130.2  
Other accrued liabilities   413.0       440.7  
Income taxes payable   793.0       132.0  
Current portion of long-term debt, net   799.5       799.2  
Current liabilities held for sale         159.1  
Total current liabilities   3,501.8       3,121.8  
       
Long-term debt, net of current portion   6,654.8       7,122.6  
Deferred taxes   1,476.1       1,479.5  
Other liabilities   451.2       426.2  
Total liabilities   12,083.9       12,150.1  
       
Common stock   1.1       1.1  
Additional paid-in capital   2,363.9       2,307.8  
Retained earnings   11,410.4       9,455.6  
Accumulated other comprehensive loss   (206.0 )     (183.1 )
Treasury stock   (17.5 )     (17.6 )
Total stockholders’ equity   13,551.9       11,563.8  
       
Total liabilities and stockholders’ equity $ 25,635.8     $ 23,713.9  

Roper Technologies, Inc. and Subsidiaries        
Condensed Consolidated Statements of Earnings (unaudited)        
(Amounts in millions, except per share data)        
         
    Three months ended March 31,
     2022     2021
Net revenues   $ 1,526.6     $ 1,376.1  
Cost of sales     496.5       440.1  
Gross profit     1,030.1       936.0  
         
Selling, general and administrative expenses     609.0       561.4  
Income from operations     421.1       374.6  
         
Interest expense, net     52.6       60.6  
Other income (expense), net     (1.9 )     27.1  
         
Earnings before income taxes     366.6       341.1  
         
Income taxes     79.0       71.2  
         
Net earnings from continuing operations     287.6       269.9  
         
Earnings from discontinued operations, net of tax     15.6       19.1  
Gain on disposition of discontinued operations, net of tax     1,717.3        
Net earnings from discontinued operations     1,732.9       19.1  
         
Net earnings   $ 2,020.5     $ 289.0  
         
Net earnings per share from continuing operations:        
Basic   $ 2.72     $ 2.57  
Diluted   $ 2.70     $ 2.55  
         
Net earnings per share from discontinued operations:        
Basic   $ 16.41     $ 0.18  
Diluted   $ 16.24     $ 0.18  
         
Net earnings per share:        
Basic   $ 19.13     $ 2.75  
Diluted   $ 18.94     $ 2.73  
         
Weighted average common shares outstanding:        
Basic     105.6       105.0  
Diluted     106.7       106.0  

Roper Technologies, Inc. and Subsidiaries                
Selected Segment Financial Data (unaudited)                
(Amounts in millions; percentages of net revenues)                
                 
    Three Months Ended March 31,
      2022       2021  
    Amount   %   Amount   %
Net revenues:                
Application Software   $ 631.5       $ 576.6    
Network Software & Systems     368.7         314.2    
Measurement & Analytical Solutions     392.4         369.6    
Process Technologies     134.0         115.7    
Total   $ 1,526.6       $ 1,376.1    
                 
                 
Gross profit:                
Application Software   $ 437.8   69.3 %   $ 398.7   69.1 %
Network Software & Systems     302.4   82.0 %     256.4   81.6 %
Measurement & Analytical Solutions     217.6   55.5 %     218.2   59.0 %
Process Technologies     72.3   54.0 %     62.7   54.2 %
Total   $ 1,030.1   67.5 %   $ 936.0   68.0 %
                 
                 
Operating profit*:                
Application Software   $ 173.8   27.5 %   $ 153.7   26.7 %
Network Software & Systems     145.4   39.4 %     114.1   36.3 %
Measurement & Analytical Solutions     115.9   29.5 %     121.5   32.9 %
Process Technologies     41.8   31.2 %     35.1   30.3 %
Total   $ 476.9   31.2 %   $ 424.4   30.8 %
                 
*Segment operating profit is before unallocated corporate general and administrative expenses. These expenses were $55.8 and $49.8 for the three months ended March 31, 2022 and 2021, respectively.

Roper Technologies, Inc. and Subsidiaries  
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in millions)
       
  Three months ended March 31,
    2022       2021  
Cash flows from operating activities:      
Net earnings from continuing operations $ 287.6     $ 269.9  
Adjustments to reconcile net earnings from continuing operations to cash flows from operating activities:      
Depreciation and amortization of property, plant and equipment   11.0       13.1  
Amortization of intangible assets   148.1       146.3  
Amortization of deferred financing costs   3.1       3.4  
Non-cash stock compensation   35.9       31.6  
Gain on sale of assets, net of tax         (21.6 )
Income tax provision, excluding tax associated with gain on sale of assets   79.0       65.7  
Changes in operating assets and liabilities, net of acquired businesses:      
Accounts receivable   82.0       54.3  
Unbilled receivables   (15.4 )     (17.8 )
Inventories   (27.7 )     (2.1 )
Accounts payable   17.9       13.3  
Other accrued liabilities   (125.1 )     (59.0 )
Deferred revenue   29.4       60.9  
Cash income taxes paid   (27.4 )     (17.2 )
Other, net   (24.6 )     (14.9 )
Cash provided by operating activities from continuing operations   473.8       525.9  
Cash provided by operating activities from discontinued operations   1.5       33.7  
Cash provided by operating activities   475.3       559.6  
       
       
Cash flows from (used in) investing activities:      
Acquisitions of businesses, net of cash acquired   (53.2 )      
Capital expenditures   (7.1 )     (7.1 )
Capitalized software expenditures   (7.5 )     (7.2 )
Proceeds from sale of assets         27.1  
Other, net         (0.1 )
Cash (used in) provided by investing activities from continuing operations   (67.8 )     12.7  
Proceeds from disposition of discontinued operations   3,006.2        
Cash used in investing activities from discontinued operations   (0.2 )     (2.0 )
Cash provided by investing activities   2,938.2       10.7  
       
       
       
Cash flows from (used in) financing activities:      
Borrowings (payments) under revolving line of credit, net   (470.0 )     (495.0 )
Cash dividends to stockholders   (65.3 )     (58.8 )
Proceeds from stock-based compensation, net   21.0       4.4  
Treasury stock sales   5.5       4.7  
Other         (0.1 )
Cash flows used in financing activities from continuing operations   (508.8 )     (544.8 )
Cash flows used in financing activities from discontinued operations   (11.4 )     (0.4 )
Cash flows used in financing activities   (520.2 )     (545.2 )
(Continued)
Roper Technologies, Inc. and Subsidiaries  
Condensed Consolidated Statements of Cash Flows (unaudited) – (Continued)
(Amounts in millions)
       
  Three months ended March 31,
    2022       2021  
       
Effect of foreign currency exchange rate changes on cash   (7.3 )     (2.4 )
       
Net increase in cash and cash equivalents   2,886.0       22.7  
       
Cash and cash equivalents, beginning of period   351.5       308.3  
       
Cash and cash equivalents, end of period $ 3,237.5     $ 331.0  

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