ROPER TECHNOLOGIES, INC. SARASOTA, Fla., Feb. 1, 2016 /PRNewswire/ -- Roper Technologies, Inc. (NYSE: ROP), a diversified technology company, reported financial results for the fourth quarter and full year ended December 31, 2015.
Roper reports results - including revenue, operating margin, net income and diluted earnings per share - on a GAAP and adjusted basis. Adjusted measures are reconciled to the corresponding GAAP measures at the end of this release.
Fourth Quarter 2015
Fourth quarter GAAP diluted earnings per share (DEPS) were $2.05 and adjusted diluted earnings per share were $1.82. GAAP revenue was $944 million and adjusted revenue was $948 million. GAAP gross margin was 61.4% and adjusted gross margin increased 190 basis points to 61.8%.
GAAP operating margin was 29.5% and adjusted operating margin was 30.1%. EBITDA margin was 35.9% for the quarter, a 60 basis point increase over last year. Operating cash flow in the quarter was $269 million.
Full Year 2015
Full year GAAP diluted earnings per share increased 7% to $6.85 and adjusted diluted earnings per share were $6.68, a 4% increase over the prior year. GAAP revenue was $3.58 billion and adjusted revenue was $3.59 billion, a 1% increase. GAAP operating margin increased 50 basis points to 28.7% and adjusted operating margin was 29.0%, an 80 basis point increase over the prior year. Full year EBITDA was $1.24 billion, or 34.6% of adjusted revenue.
Operating cash flow increased 11% to $929 million. Free cash flow was $893 million, representing 25% of revenue.
"2015 was a record year for Roper," said Brian Jellison, Roper's Chairman, President and CEO. "Growth in our medical, software and RF businesses offset a significant decline in energy markets and negative foreign exchange. Our businesses executed well, driving an 11% increase in free cash flow. We successfully deployed $1.8 billion in strategic acquisitions during the year and are excited about our robust pipeline for 2016. We expect to deploy over $1 billion in 2016, including the January acquisition of CliniSys Group, Ltd. which expands our global presence in software for hospital laboratories."
2016 Outlook and Guidance
Roper expects operating cash flow of approximately $1.0 billion. "Our medical and software businesses will continue to lead our growth in 2016 and we expect an overall revenue increase of 8 - 10%, including 2 - 4 % organic growth, with strong operating leverage," Mr. Jellison added.
Roper expects 2016 full year adjusted diluted earnings per share (DEPS) between $6.85 and $7.15 with first quarter DEPS between $1.42 and $1.47.
The company's guidance excludes future acquisitions or divestitures.
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 Monday, February 1, 2016. The call can be accessed via webcast or by dialing +1 888-452-4023 (US/Canada) or +1 719-325-2420, using confirmation code 429015. 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://www.webcaster4.com/Webcast/Page/866/12793. Telephonic replays will be available for up to two weeks by calling +1 719-457-0820 and using the access code 429015.
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
2015 2014 V%
---- ---- ---
Q4 GAAP Revenue $943.6 $946.1 (0.3%)
Add: Purchase Accounting Adjustment
to Acquired Deferred Revenue 4.0 1.4
--- ---
Q4 Adjusted Revenue $947.6 $947.5 0.0%
====== ======
Components of Adjusted Revenue Growth
Organic (3.6%)
Acquisitions 6.0%
Foreign Exchange (2.4%)
-----
Total Growth 0.0%
===
Table 2: Reconciliation of Q4 2015 GAAP DEPS
to Adjusted DEPS
Q4 2015 Q4 2014 V%
------- ------- ---
GAAP Diluted Earnings
Per Share (DEPS) $2.05 $1.84 11%
Minus: Gain on Sale
of Divested Business $(0.33) --
Add: Impairment
Charge on Minority
Investment $0.06 --
Add: Purchase
Accounting Adjustment
to Acquired Deferred
Revenue $0.03 $0.01
Add: Acquisition-
Related Inventory
Step-up Charge $0.02 $0.00
Rounding $(0.01) --
Adjusted DEPS $1.82 $1.85 (2%)
===== =====
Table 3: Reconciliation of Full Year GAAP
DEPS to Adjusted DEPS
FY 2015 FY 2014 V%
------- ------- ---
GAAP Diluted
Earnings Per Share
(DEPS) $6.85 $6.40 7%
Minus: Gain on
Sale of Divested
Business ($0.33)
Add: Impairment
Charge on Minority
Investment $0.06
Add: Purchase
Accounting
Adjustment to
Acquired Deferred
Revenue $0.07 $0.02
Add: Acquisition-
Related Inventory
Step-up Charge $0.03 $0.01
Rounding -- ($0.01)
Adjusted DEPS $6.68 $6.42 4%
===== =====
Table 4: 2015 Full Year Adjusted Revenue and Adjusted Operating Margin Reconciliation
2015 2014 V% / V Bps
---- ---- ----------
Full Year GAAP
Revenue $3,582 $3,549 +1%
Add: Purchase
Accounting
Adjustment to
Acquired Deferred
Revenue 11 2
Rounding -- 1
Adjusted Revenue (A) $3,593 $3,552 +1%
GAAP Operating
Profit $1,028 $999
Add: Purchase
Accounting
Adjustment to
Acquired Deferred
Revenue 11 2
Add: Acquisition-
Related Inventory
Step-up Charge 5 1
Rounding (1) 1
--- ---
Adjusted Operating
(B) 1,043 1,003
GAAP Operating
Margin 28.7% 28.2% +50 bps
Adjusted Operating
Margin (B) /(A) 29.0% 28.2% +80 bps
Table 5: FY 2015 EBITDA and EBITDA Margin Reconciliation
FY 2015
-------
GAAP Revenue $3,582.4
Add: Purchase Accounting Adjustment to
Acquired Deferred Revenue 10.6
Rounding --
Adjusted Revenue (A) $3,593.0
GAAP Net Earnings $696.1
Add: Taxes 306.3
Add: Amortization 166.1
Add: Interest Expense 84.2
Add: Depreciation 38.2
Add: Purchase Accounting Adjustment to
Acquired Deferred Revenue 10.6
Add: Acquisition-Related Inventory
Step-up Charge 4.6
Add: Impairment Charge on Minority
Investment 9.5
Less: Gain on Disposal of a Business (70.9)
-----
EBITDA (B) 1,244.7
EBITDA Margin (B) / (A) 34.6%
Table 6: Fourth Quarter Adjusted Revenue and Adjusted Operating Margin
Reconciliation
2015 2014
---- ----
Q4 GAAP Revenue $944 $946
Add: Purchase
Accounting
Adjustment to
Acquired Deferred
Revenue 4 1
Rounding -- 1
Q4 Adjusted Revenue
(A) $948 $948
Q4 GAAP Operating
Profit $278.7 $283.7
Add: Purchase
Accounting
Adjustment to
Acquired Deferred
Revenue 4.0 1.4
Add: Acquisition-
Related Inventory
Step-up Charge 2.6 0.4
Rounding -- 0.1
--- ---
Adjusted Operating
Profit (B) $285.3 $285.6
GAAP Operating
Margin 29.5% 30.0%
Adjusted Operating
Margin (B) /(A) 30.1% 30.1%
Table 7: Fourth Quarter Adjusted Revenue and Adjusted Gross Margin Reconciliation
2015 2014 V bps
---- ---- -----
Q4 GAAP Revenue $944 $946
Add: Purchase
Accounting Adjustment
to Acquired Deferred
Revenue 4 1
Rounding -- 1
Q4 Adjusted Revenue (A) $948 $948
Q4 GAAP Gross Profit $579.1 $565.7
Add: Purchase
Accounting Adjustment
to Acquired Deferred
Revenue 4.0 1.4
Add: Acquisition-
Related Inventory Step-
up Charge 2.6 0.4
Rounding -- 0.1
--- ---
Adjusted Gross Profit
(B) $585.7 $567.6
GAAP Gross Margin 61.4% 59.8% +160 bps
Adjusted Gross Margin
(B) /(A) 61.8% 59.9% +190 bps
Table 8: Free Cash Flow Reconciliation
2015 2014 V%
---- ---- ---
Operating Cash Flow $929 $840 11%
Less: Capital Expenditures (36) (38)
Rounding 1
---
Free Cash Flow $893 $803 11%
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 2015 2014
------ ---- ----
CURRENT ASSETS:
Cash and cash equivalents $778,511 $610,430
Accounts receivable 488,271 511,538
Inventories 189,868 193,766
Unbilled receivable 122,042 96,409
Deferred taxes* - 54,199
Other current assets 39,355 45,763
Total current assets 1,618,047 1,512,105
-------------------- --------- ---------
PROPERTY, PLANT AND
EQUIPMENT, NET 105,510 110,876
------------------- ------- -------
OTHER ASSETS:
Goodwill 5,824,726 4,710,691
Other intangible assets, net 2,528,996 1,978,729
Deferred taxes* 31,532 27,496
Other assets 59,554 60,288
Total other assets 8,444,808 6,777,204
------------------ --------- ---------
TOTAL ASSETS $10,168,365 $8,400,185
============ =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $139,737 $143,847
Accrued compensation 119,511 117,374
Deferred revenue 267,030 190,953
Other accrued liabilities 168,513 160,738
Income taxes payable 18,532 -
Deferred taxes* - 3,943
Current portion of long-
term debt 6,805 11,092
------------------------ ----- ------
Total current liabilities 720,128 627,947
------------------------- ------- -------
NONCURRENT LIABILITIES:
Long-term debt 3,264,417 2,190,282
Deferred taxes* 810,856 735,826
Other liabilities 74,017 90,770
Total liabilities 4,869,418 3,644,825
----------------- --------- ---------
STOCKHOLDERS' EQUITY:
Common stock 1,028 1,021
Additional paid-in capital 1,419,262 1,325,338
Retained earnings 4,110,530 3,520,201
Accumulated other
comprehensive earnings (212,779) (71,927)
Treasury stock (19,094) (19,273)
-------------- ------- -------
Total stockholders' equity 5,298,947 4,755,360
-------------------------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $10,168,365 $8,400,185
===================== =========== ==========
*In the fourth quarter of 2015, the Company adopted ASU 2015-17, which requires that deferred tax
liabilities
and assets be classified as non-current in the consolidated balance sheet. The Company has chosen
to
adopt this ASU on a prospective basis, therefore prior periods were not retrospectively adjusted.
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,
2015 2014 2015 2014
---- ---- ---- ----
Net sales $943,640 $946,145 $3,582,395 $3,549,494
Cost of sales 364,549 380,404 1,417,749 1,447,595
------------- ------- ------- --------- ---------
Gross profit 579,091 565,741 2,164,646 2,101,899
Selling, general and administrative expenses 300,414 281,992 1,136,728 1,102,426
-------------------------------------------- ------- ------- --------- ---------
Income from operations 278,677 283,749 1,027,918 999,473
Interest expense 23,843 19,285 84,225 78,637
Other income/(expense) 60,600 (422) 58,652 620
---------------------- ------ ---- ------ ---
Earnings from continuing operations before
income taxes 315,434 264,042 1,002,345 921,456
Income taxes 106,837 78,106 306,278 275,423
------------ ------- ------ ------- -------
Net Earnings $208,597 $185,936 $696,067 $646,033
============ ======== ======== ======== ========
Earnings per share:
Basic $2.07 $1.86 $6.92 $6.47
Diluted $2.05 $1.84 $6.85 $6.40
Weighted average common and common
equivalent shares outstanding:
Basic 100,829 100,151 100,616 99,916
Diluted 101,833 101,122 101,597 100,884
======= ======= ======= ======= =======
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,
------------------------------- --------------------------------
2015 2014 2015 2014
---- ---- ---- ----
Amount % Amount % Amount % Amount %
------ --- ------ --- ------ --- ------ ---
Net sales:
Medical & Scientific Imaging $321,735 $286,410 $1,215,318 $1,080,309
RF Technology 281,883 240,084 1,033,951 950,227
Industrial Technology 182,039 219,642 745,381 827,145
Energy Systems & Controls 157,983 200,009 587,745 691,813
Total $943,640 $946,145 $3,582,395 $3,549,494
===== ======== ======== ========== ==========
Gross profit:
Medical & Scientific Imaging $238,804 74.2% $206,669 72.2% $899,775 74.0% $779,407 72.1%
RF Technology 154,731 54.9% 125,736 52.4% 552,605 53.4% 501,637 52.8%
Industrial Technology 89,842 49.4% 111,104 50.6% 370,894 49.8% 417,568 50.5%
Energy Systems & Controls 95,714 60.6% 122,232 61.1% 341,372 58.1% 403,287 58.3%
Total $579,091 61.4% $565,741 59.8% $2,164,646 60.4% $2,101,899 59.2%
===== ======== ==== ======== ==== ========== ==== ========== ====
Operating profit*:
Medical & Scientific Imaging $116,492 36.2% $100,488 35.1% $441,931 36.4% $375,867 34.8%
RF Technology 83,591 29.7% 67,994 28.3% 312,112 30.2% 271,177 28.5%
Industrial Technology 52,155 28.7% 69,056 31.4% 214,538 28.8% 247,596 29.9%
Energy Systems & Controls 51,704 32.7% 72,177 36.1% 162,128 27.6% 203,021 29.3%
------ ------ ------- -------
Total $303,942 32.2% $309,715 32.7% $1,130,709 31.6% $1,097,661 30.9%
===== ======== ==== ======== ==== ========== ==== ========== ====
Net Orders:
Medical & Scientific Imaging $334,967 $282,169 $1,235,143 $1,081,190
RF Technology 273,856 242,295 1,024,999 955,831
Industrial Technology 176,379 197,847 731,810 808,921
Energy Systems & Controls 138,869 202,030 555,672 692,136
------- ------- ------- -------
Total $924,071 $924,341 $3,547,624 $3,538,078
===== ======== ======== ========== ==========
* Operating profit is before unallocated corporate general and administrative expenses. These expenses
were $25,265 and $25,966 for the three months ended December 31, 2015 and 2014, respectively, and
$102,791 and $98,188 for the twelve months ended December 31, 2015 and 2014, respectively.
Roper Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in thousands)
Twelve months ended
December 31,
------------
2015 2014
---- ----
Net earnings $696,067 $646,033
Non-cash items:
Depreciation 38,185 40,890
Amortization 166,076 156,394
Stock-based compensation expense 61,766 63,027
Gain on disposal of a business (70,860) -
Income taxes 3,069 (46,619)
Changes in assets and liabilities:
Receivables 30,753 (10,709)
Inventory (1,150) 6,349
Accounts payable (6,554) (5,070)
Accrued liabilities 6,401 (15,385)
Other, net 5,072 5,531
---------- ----- -----
Cash provided by operating activities 928,825 840,441
Business acquisitions, net of cash acquired (1,762,883) (305,379)
Capital expenditures (36,260) (37,644)
Proceeds from disposal of a business 105,624 -
Other, net (4,813) (5,082)
---------- ------ ------
Cash used by investing activities (1,698,332) (348,105)
Principal debt borrowings 900,000 -
Principal debt payments (4,006) (561)
Revolver borrowings (payments), net 180,000 (250,000)
Debt issuance costs (8,044) -
Dividends (100,334) (79,859)
Excess tax benefit from share-based payment 22,228 21,081
Proceeds from stock-based compensation, net 18,312 10,463
Redemption premium on convertible debt (13,126) (1,518)
Other, net 1,212 2,290
---------- ----- -----
Cash provided by (used in) financing activities 996,242 (298,104)
Effect of exchange rate changes on cash (58,654) (43,522)
--------------------------------------- ------- -------
Net increase in cash and equivalents 168,081 150,710
Cash and equivalents, beginning of period 610,430 459,720
----------------------------------------- ------- -------
Cash and equivalents, end of period $778,511 $610,430
=================================== ======== ========
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SOURCE Roper Technologies, Inc.
