GlobeNewswire Inc | Jul 28, 2020 06:55AM EDT

July 28, 2020

SARASOTA, Fla., July 28, 2020 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (NYSE: ROP), a leading diversified technology company, reported financial results for the second quarter ended June 30, 2020.

Second quarter GAAP and adjusted revenue each decreased 2% to $1.30 billion and $1.31 billion, respectively. Organic revenue decreased 3%. GAAP and adjusted gross margin were 64.7%, expanding 80 basis points and 70 basis points, respectively. GAAP diluted earnings per share (DEPS) was $2.08 and adjusted DEPS was $2.94.

I am extremely proud of our business leaders for prioritizing the health and safety of our employees while executing at a high level during these challenging times, said Neil Hunn, Ropers President and CEO. Despite the complexities associated with operating in the COVID-19 environment, we continued to invest for durable organic growth while generating outstanding cash flow. All-in-all, this was a very strong quarter for Roper.

EBITDA decreased 2% to $461 million and EBITDA margin was 35.3%, flat versus the prior year. GAAP operating cash flow increased 49% to $449 million. Excluding $124 million of income tax payments deferred due to COVID-19, adjusted operating cash flow increased 8% to $325 million and adjusted free cash flow increased 10% to $315 million.

Given our consistent cash flow generation, exceptionally strong balance sheet, and active pipeline of high-quality acquisition opportunities, we remain confident in our ability to continue executing our proven cash compounding strategy, concluded Mr. Hunn.

Updating 2020 Guidance

The Company now expects full year adjusted DEPS of $11.90 - $12.40, compared to previous guidance of $11.60 - $12.60.

For the third quarter of 2020, the Company expects adjusted DEPS of $2.90 - $3.00.

The Companys guidance excludes the impact of unannounced future acquisitions or divestitures.

Conference Call to be Held at 8:00 AM (ET) Today

A conference call to discuss these results has been scheduled for 8:00 AM ET on Tuesday, July 28, 2020. The call can be accessed via webcast or by dialing +1 877-870-4263 (US/Canada) or +1 412-317-0790 and referencing Roper Technologies. Webcast information and conference call materials will be made available in the Investors section of Ropers 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 10145430.

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, Gross Profit and EBITDA Reconciliation ($M) Q2 2019 Q2 2020 V %Adjusted Revenue Reconciliation GAAP Revenue $ 1,330 $ 1,305 (2 ) %Purchase accounting adjustment to acquired 2 1 ^ deferred revenue AAdjusted Revenue $ 1,332 $ 1,306 (2 ) % Components of Adjusted Revenue Growth Organic (3 ) %Acquisitions/Divestitures 1 %Foreign Exchange (1 ) %Rounding 1 %Total Adjusted Revenue Growth (2 ) % Adjusted Gross Profit Reconciliation GAAP Gross Profit $ 850 $ 844 Purchase accounting adjustment to acquired 2 1 ^ deferred revenue AAdjusted Gross Profit $ 852 $ 845 (1 ) % GAAP Gross Margin 63.9 % 64.7 % +80 bpsAdjusted Gross Margin 64.0 % 64.7 % +70 bps Adjusted EBITDA Reconciliation GAAP Net Earnings $ 250 $ 219 Taxes 73 65 Interest Expense 45 47 Depreciation 12 12 Amortization 87 101 EBITDA $ 466 $ 445 (4 ) % Purchase accounting adjustment to acquired 2 1 ^ deferred revenue ARestructuring charge associated with certain ? 14 Process Technologies businessesTransaction-related expenses for completed 3 1 ^ acquisitions BAdjusted EBITDA $ 471 $ 461 (2 ) %% of Adjusted Revenue 35.3 % 35.3 % 0 bps

Table 2: Adjusted DEPS Reconciliation ^C Q2 2019 Q2 2020 V %GAAP DEPS $ 2.38 $ 2.08 (13 ) %Purchase accounting adjustment to acquired 0.01 0.01 ^ deferred revenue ARestructuring charge associated with certain ? 0.10 Process Technologies businessesTransaction-related expenses for completed 0.03 0.01 ^ acquisitions BAmortization of acquisition-related 0.65 0.75 intangible assets ^DAdjustment to income tax expense related tothe gain on sale of Scientific Imaging 0.01 ? businessesRounding (0.01 ) (0.01 ) Adjusted DEPS $ 3.07 $ 2.94 (4 ) %

Table 3: Adjusted Cash Flow Reconciliation ($M) Q2 2019 Q2 2020 V %Operating Cash Flow $ 301 $ 449 49 %Deferred tax payments ^E ? (124 ) Adjusted Operating Cash Flow 301 325 8 %Capital Expenditures (12 ) (8 ) Capitalized Software Expenditures (3 ) (3 ) Adjusted Free Cash Flow $ 286 $ 315 10 %

Table 4: Forecasted Adjusted DEPS Reconciliation ^C Q3 2020 FY 2020 Low End High End Low End High EndGAAP DEPS $ 2.15 $ 2.25 $ 8.76 $ 9.26 Purchase accounting adjustment to ? ? 0.03 0.03 acquired deferred revenue ^ARestructuring charge associatedwith certain Process Technologies ? ? 0.10 0.10 businessesTransaction-related expenses for ? ? 0.01 0.01 completed acquisitions ^BAmortization of acquisition-related 0.75 0.75 3.00 3.00 intangible assets ^DAdjusted DEPS $ 2.90 $ 3.00 $ 11.90 $ 12.40

2020 actual results and forecast of estimated acquisition-related fairA. value adjustments to deferred revenue related to the acquisitions of Foundry and iPipeline as shown below ($M, except per share data). Q2 2019A Q2 2020A Q3 2020E FY 2020E Pretax $ 2 $ 1 $ ? $ 4 After-tax $ 1 $ 1 $ ? $ 3 Per Share $ 0.01 $ 0.01 $ ? $ 0.03 B. Transaction-related expenses for the FMIC and Team TSI acquisitions ($1M pretax, $1M after-tax). C. All Q2'19 and 2020 adjustments taxed at 21%. Actual results and forecast of estimated amortization ofD. acquisition-related intangible assets ($M, except per share data); for comparison purposes, prior period amounts are also shown below. Tax rate of 21% applied to amortization. Q2 2019A Q2 2020A Q3 2020E FY 2020E Pretax $ 86 $ 100 $ 101 $ 401 After-tax $ 68 $ 79 $ 80 $ 317 Per share $ 0.65 $ 0.75 $ 0.75 $ 3.00 E. $124M of income tax payments that were deferred into the third quarter of 2020.

Note: Numbers may not foot due to rounding.

About Roper Technologies

Roper Technologies is a constituent of the S&P 500, Fortune 1000, and the Russell 1000 indices. Roper operates businesses that design and develop software (both license and software-as-a-service) and engineered products and solutions for a variety of niche end markets. Additional information about Roper is available on the Companys 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, the prospects for newly acquired businesses to be integrated and contribute to future growth, and 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 the effects of the COVID-19 pandemic on our business, operations, financial results and liquidity, including the duration and magnitude of such effects, which will depend on numerous evolving factors which we cannot accurately predict or assess, including: the duration and scope of the pandemic; the 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. 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, risks related to political instability, armed hostilities, incidents of terrorism, public health crisis (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, 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 millions) June 30, 2020 December 31, 2019ASSETS: Cash and cash equivalents $ 1,870.8 $ 709.7 Accounts receivable, net 738.8 791.6 Inventories, net 216.6 198.6 Income taxes receivable 23.7 18.5 Unbilled receivables 225.1 183.5 Other current assets 104.2 97.6 Total current assets 3,179.2 1,999.5 Property, plant and equipment, net 129.6 139.9 Goodwill 10,846.6 10,815.4 Other intangible assets, net 4,511.8 4,667.7 Deferred taxes 92.6 95.6 Other assets 382.5 390.8 Total assets $ 19,142.3 $ 18,108.9 LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable $ 185.4 $ 162.0 Accrued compensation 207.4 240.1 Deferred revenue 828.3 831.8 Other accrued liabilities 354.8 346.2 Income taxes payable 320.1 215.1 Current portion of long-term debt, net 602.6 602.2 Total current liabilities 2,498.6 2,397.4 Long-term debt, net of current portion 5,263.8 4,673.1 Deferred taxes 1,070.3 1,108.1 Other liabilities 429.9 438.4 Total liabilities 9,262.6 8,617.0 Common stock 1.1 1.1 Additional paid-in capital 2,012.9 1,903.9 Retained earnings 8,168.7 7,818.0 Accumulated other comprehensive loss (284.8 ) (212.8 )Treasury stock (18.2 ) (18.3 )Total stockholders' equity 9,879.7 9,491.9 Total liabilities and stockholders' equity $ 19,142.3 $ 18,108.9

Roper Technologies, Inc. and SubsidiariesCondensed Consolidated Statements of Earnings (unaudited)(Amounts in millions, except per share data) Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019Net revenues $ 1,305.0 $ 1,330.3 $ 2,655.7 $ 2,617.5 Cost of sales 461.3 480.3 955.2 956.9 Gross profit 843.7 850.0 1,700.5 1,660.6 Selling, generaland administrative 510.1 481.6 1,017.7 945.8 expensesIncome from 333.6 368.4 682.8 714.8 operations Interest expense, 47.5 45.1 92.9 88.8 netOther income (2.0 ) (1.0 ) (1.2 ) (4.1 )(expense), netGain on disposal of ? ? ? 119.6 business Earnings before 284.1 322.3 588.7 741.5 income taxes Income taxes 64.9 72.6 129.2 122.2 Net earnings $ 219.2 $ 249.7 $ 459.5 $ 619.3 Net earnings per share:Basic $ 2.10 $ 2.40 $ 4.40 $ 5.97 Diluted $ 2.08 $ 2.38 $ 4.36 $ 5.90 Weighted averagecommon shares outstanding:Basic 104.5 103.9 104.4 103.7 Diluted 105.5 105.1 105.4 104.9

Roper Technologies, Inc. and SubsidiariesSelected Segment Financial Data (unaudited)(Amounts in millions; percentages of net revenues) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Amount % Amount % Amount % Amount %Net revenues: Application Software $ 398.4 $ 390.6 $ 803.5 $ 771.8 Network Software & 422.0 366.8 860.2 712.5 SystemsMeasurement & Analytical 363.9 408.4 729.1 810.2 SolutionsProcess Technologies 120.7 164.5 262.9 323.0 Total $ 1,305.0 $ 1,330.3 $ 2,655.7 $ 2,617.5 Gross profit: Application Software $ 273.8 68.7 % $ 262.7 67.3 % $ 544.2 67.7 % $ 516.1 66.9 %Network Software & 284.8 67.5 % 252.7 68.9 % 578.0 67.2 % 491.7 69.0 %SystemsMeasurement & Analytical 221.5 60.9 % 240.2 58.8 % 436.1 59.8 % 471.4 58.2 %SolutionsProcess Technologies 63.6 52.7 % 94.4 57.4 % 142.2 54.1 % 181.4 56.2 %Total $ 843.7 64.7 % $ 850.0 63.9 % $ 1,700.5 64.0 % $ 1,660.6 63.4 % Operating profit*: Application Software $ 113.4 28.5 % $ 98.4 25.2 % $ 211.0 26.3 % $ 189.8 24.6 %Network Software & 130.6 30.9 % 129.2 35.2 % 269.3 31.3 % 254.5 35.7 %SystemsMeasurement & Analytical 123.0 33.8 % 130.3 31.9 % 237.0 32.5 % 248.4 30.7 %SolutionsProcess Technologies 16.9 14.0 % 57.2 34.8 % 60.2 22.9 % 107.3 33.2 %Total $ 383.9 29.4 % $ 415.1 31.2 % $ 777.5 29.3 % $ 800.0 30.6 % *Segment operating profit is before unallocated corporate general andadministrative expenses; these expenses were $50.3 and $46.7 for the threemonths ended June30, 2020 and 2019, respectively, and $94.7 and $85.2 for thesix months ended June30, 2020 and 2019, respectively.

Roper Technologies, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited)(Amounts in millions) Six months ended June 30, 2020 2019Cash flows from operating activities: Net earnings $ 459.5 $ 619.3 Adjustments to reconcile net earnings to cash flows from operating activities:Depreciation and amortization of property, plant and 25.1 23.4 equipmentAmortization of intangible assets 203.0 169.4 Amortization of deferred financing costs 4.3 3.3 Non-cash stock compensation 58.2 54.3 Gain on disposal of business, net of associated income ? (88.5 )taxChanges in operating assets and liabilities, net of acquired businesses:Accounts receivable 49.6 38.5 Unbilled receivables (42.3 ) (37.0 )Inventories (19.1 ) (18.4 )Accounts payable and accrued liabilities 18.8 (94.0 )Deferred revenue (4.3 ) 51.2 Income taxes, excluding tax associated with gain on 76.7 (77.6 )disposal of businessesCash tax paid for gain on disposal of businesses (10.0 ) (39.4 )Other, net (6.5 ) (13.4 )Cash provided by operating activities 813.0 591.1 Cash flows from (used in) investing activities: Acquisitions of businesses, net of cash acquired (153.0 ) (539.2 )Capital expenditures (15.5 ) (27.9 )Capitalized software expenditures (5.2 ) (4.9 )Proceeds from (used in) disposal of businesses (3.8 ) 220.5 Other, net ? (2.6 )Cash used in investing activities (177.5 ) (354.1 ) Cash flows from (used in) financing activities: Proceeds from senior notes 600.0 ? Borrowings (payments) under revolving line of credit, ? (225.0 )netDebt issuance costs (12.0 ) ? Cash dividends to stockholders (106.6 ) (95.6 )Proceeds from stock-based compensation, net 47.7 33.0 Treasury stock sales 4.5 3.6 Other (0.7 ) 1.1 Cash flows from (used in) financing activities 532.9 (282.9 ) Effect of foreign currency exchange rate changes on (7.3 ) 2.3 cash Net increase in cash and cash equivalents 1,161.1 (43.6 ) Cash and cash equivalents, beginning of period 709.7 364.4 Cash and cash equivalents, end of period $ 1,870.8 $ 320.8

Contact Information:Investor Relations941-556-2601 investor-relations@ropertech.com