GlobeNewswire Inc | Oct 27, 2020 06:55AM EDT

October 27, 2020

SARASOTA, Fla., Oct. 27, 2020 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (NYSE: ROP), a leading diversified technology company, reported financial results for the third quarter ended September 30, 2020.

Third quarter GAAP and adjusted revenue increased 1% to $1.37 billion and organic revenue decreased 3%. GAAP gross margin was 64.1% while adjusted gross margin was 64.2%. GAAP diluted earnings per share (DEPS) was $2.21 and adjusted DEPS was $3.17.

EBITDA increased 1% to $501 million and EBITDA margin decreased 10 basis points to 36.6%. GAAP operating cash flow decreased 66% to $138 million. Adjusted operating cash flow increased 12% to $454 million and adjusted free cash flow increased 14% to $442 million.

"We are very pleased with the continued strong execution by our business leaders this quarter," said Neil Hunn, Ropers President and CEO. "We once again benefited from our diverse and resilient portfolio, and saw improvement across many businesses. Importantly, we have seen an accelerated shift towards SaaS solutions and an expansion of our software networks. Notably, our laboratory software businesses and Verathons video intubation solutions have been on the front lines of the battle against COVID-19.

"We successfully deployed $5.8 billion over the past few months, led by our acquisition of Vertafore last month. These niche software acquisitions continue Ropers long-term transformation by enhancing the quality and resilience of our portfolio, increasing our mix of recurring revenue, and further strengthening our ability to consistently compound cash flow. We are well positioned for a strong fourth quarter and a great 2021," concluded Mr. Hunn.

Increasing 2020 Guidance

The Company now expects full year adjusted DEPS of $12.55 - $12.65, compared to previous guidance of $11.90 - $12.40.

For the fourth quarter of 2020, the Company expects adjusted DEPS of $3.39 - $3.49.

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, October 27, 2020. 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 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 10148216.

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) Q3 2019 Q3 2020 V %Adjusted Revenue Reconciliation GAAP Revenue $ 1,354 $ 1,366 1 %Purchase accounting adjustment to acquired 3 3 ^ deferred revenue AAdjusted Revenue $ 1,358 $ 1,369 1 % Components of Adjusted Revenue Growth Organic (3 ) %Acquisitions/Divestitures 3 %Foreign Exchange ? %Rounding 1 %Total Adjusted Revenue Growth 1 % Adjusted Gross Profit Reconciliation GAAP Gross Profit $ 874 $ 876 Purchase accounting adjustment to acquired 3 3 ^ deferred revenue AAdjusted Gross Profit $ 877 $ 879 ? % GAAP Gross Margin 64.5 % 64.1 % (40 bps)Adjusted Gross Margin 64.6 % 64.2 % (40 bps) Adjusted EBITDA Reconciliation GAAP Net Earnings $ 278 $ 234 Taxes 60 69 Interest Expense 49 62 Depreciation 12 13 Amortization 94 117 EBITDA $ 493 $ 495 ? % Purchase accounting adjustment to acquired 3 3 ^ deferred revenue and commission expense ATransaction-related expenses for completed 2 3 ^ acquisitions and divestiture BAdjusted EBITDA $ 498 $ 501 1 %% of Adjusted Revenue 36.7 % 36.6 % (10 bps)

Table 2: Adjusted DEPS Reconciliation ^C Q3 2019 Q3 2020 V %GAAP DEPS $ 2.64 $ 2.21 (16 ) %Purchase accounting adjustment to acquired 0.02 0.02 ^ deferred revenue and commission expense ATransaction-related expenses for completed 0.02 0.08 ^ acquisitions and divestiture BAmortization of acquisition-related intangible 0.70 0.86 assets ^DAdjustment to income tax expense related to the 0.01 ? gain on sale of Scientific Imaging businessesAdjustment to previously recognized deferredtax expense related to new deal structure for (0.10 ) ? divestiture of GatanAdjusted DEPS $ 3.29 $ 3.17 (4 ) %

Table 3: Adjusted Cash Flow Reconciliation ($M) Q3 2019 Q3 2020 V %Operating Cash Flow $ 404 $ 138 (66 ) %Cash taxes paid on sale of Gatan ? 192 Deferred tax payments ^E ? 124 Adjusted Operating Cash Flow 404 454 12 %Capital Expenditures (14 ) (8 ) Capitalized Software Expenditures (3 ) (5 ) Adjusted Free Cash Flow $ 387 $ 442 14 %

Table 4: Forecasted Adjusted DEPS Reconciliation ^C Q4 2020 FY 2020 Low End High End Low End High EndGAAP DEPS $ 2.36 $ 2.46 $ 8.92 $ 9.02 Purchase accounting adjustment toacquired deferred revenue and 0.03 0.03 0.07 0.07 commission expense ^ARestructuring charge associatedwith certain Process Technologies ? ? 0.10 0.10 businessesTransaction-related expenses for ? ? 0.09 0.09 completed acquisitions ^BAmortization of acquisition-related 1.00 1.00 3.37 3.37 intangible assets ^DAdjusted DEPS $ 3.39 $ 3.49 $ 12.55 $ 12.65

2020 actual results and forecast of estimated acquisition-related fairA. value adjustments to deferred revenue and commission expense related to the acquisitions of Foundry, iPipeline, and Vertafore as shown below ($M, except per share data). Q3 2019A Q3 2020A Q4 2020E FY 2020E Pretax $ 3 $ 3 $ 3 $ 10 After-tax $ 2 $ 2 $ 3 $ 8 Per Share $ 0.02 $ 0.02 $ 0.03 $ 0.07 Transaction-related expenses for the Vertafore, IFS, and WELIS acquisitionsB. ($3M pretax, $2M after-tax), and associated bridge financing origination fee ($7M pretax, $6M after-tax). C. All Q3'19 and 2020 adjustments taxed at 21%. Actual results and forecast of estimated amortization ofD. acquisition-related intangible assets ($M, except per share data); for comparison purposes, prior period amounts are also shown below. Tax rate of 21% applied to amortization. Q3 2019A Q3 2020A Q4 2020E FY 2020E Pretax $ 93 $ 116 $ 134 $ 450 After-tax $ 73 $ 91 $ 106 $ 356 Per share $ 0.70 $ 0.86 $ 1.00 $ 3.37 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 litigation, including 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 SubsidiariesCondensed Consolidated Balance Sheets (unaudited)(Amounts in millions) September 30, December 31, 2020 2019ASSETS: Cash and cash equivalents $ 302.1 $ 709.7 Accounts receivable, net 773.4 791.6 Inventories, net 214.9 198.6 Income taxes receivable 43.1 18.5 Unbilled receivables 249.9 183.5 Other current assets 122.8 97.6 Total current assets 1,706.2 1,999.5 Property, plant and equipment, net 146.6 139.9 Goodwill 14,158.6 10,815.4 Other intangible assets, net 7,122.5 4,667.7 Deferred taxes 95.1 95.6 Other assets 423.0 390.8 Total assets $ 23,652.0 $ 18,108.9 LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable $ 173.1 $ 162.0 Accrued compensation 251.5 240.1 Deferred revenue 868.1 831.8 Other accrued liabilities 409.3 346.2 Income taxes payable 35.1 215.1 Current portion of long-term debt, net 602.8 602.2 Total current liabilities 2,339.9 2,397.4 Long-term debt, net of current portion 9,101.2 4,673.1 Deferred taxes 1,563.9 1,108.1 Other liabilities 486.1 438.4 Total liabilities 13,491.1 8,617.0 Common stock 1.1 1.1 Additional paid-in capital 2,069.9 1,903.9 Retained earnings 8,349.4 7,818.0 Accumulated other comprehensive loss (241.4 ) (212.8 ) Treasury stock (18.1 ) (18.3 ) Total stockholders' equity 10,160.9 9,491.9 Total liabilities and stockholders' $ 23,652.0 $ 18,108.9 equity

Roper Technologies, Inc. and SubsidiariesCondensed Consolidated Statements of Earnings (unaudited)(Amounts in millions, except per share data) Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019Net revenues $ 1,366.1 $ 1,354.5 $ 4,021.8 $ 3,972.0 Cost of sales 490.2 480.9 1,445.4 1,437.8 Gross profit 875.9 873.6 2,576.4 2,534.2 Selling, generaland administrative 508.3 488.4 1,526.0 1,434.2 expensesIncome from 367.6 385.2 1,050.4 1,100.0 operations Interest expense, 62.3 48.8 155.2 137.6 netOther income (2.2 ) 1.5 (3.4 ) (2.6 ) (expense), netGain on disposal of ? ? ? 119.6 business Earnings before 303.1 337.9 891.8 1,079.4 income taxes Income taxes 68.7 60.4 197.9 182.6 Net earnings $ 234.4 $ 277.5 $ 693.9 $ 896.8 Net earnings per share:Basic $ 2.24 $ 2.67 $ 6.64 $ 8.64 Diluted $ 2.21 $ 2.64 $ 6.57 $ 8.54 Weighted averagecommon shares outstanding:Basic 104.7 104.0 104.5 103.8 Diluted 105.9 105.2 105.6 105.0

Roper Technologies, Inc. and SubsidiariesSelected Segment Financial Data (unaudited)(Amounts in millions; percentages of net revenues) Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Amount % Amount % Amount % Amount %Net revenues: Application $ 447.9 $ 405.4 $ 1,251.4 $ 1,177.2 SoftwareNetwork Software & 430.2 391.2 1,290.4 1,103.7 SystemsMeasurement &Analytical 367.9 398.3 1,097.0 1,208.5 SolutionsProcess 120.1 159.6 383.0 482.6 TechnologiesTotal $ 1,366.1 $ 1,354.5 $ 4,021.8 $ 3,972.0 Gross profit: Application $ 307.6 68.7 % $ 275.4 67.9 % $ 851.8 68.1 % $ 791.5 67.2 %SoftwareNetwork Software & 287.1 66.7 % 271.9 69.5 % 865.1 67.0 % 763.6 69.2 %SystemsMeasurement &Analytical 218.4 59.4 % 234.7 58.9 % 654.5 59.7 % 706.1 58.4 %SolutionsProcess 62.8 52.3 % 91.6 57.4 % 205.0 53.5 % 273.0 56.6 %TechnologiesTotal $ 875.9 64.1 % $ 873.6 64.5 % $ 2,576.4 64.1 % $ 2,534.2 63.8 % Operating profit*: Application $ 125.6 28.0 % $ 110.1 27.2 % $ 336.6 26.9 % $ 299.9 25.5 %SoftwareNetwork Software & 134.3 31.2 % 137.5 35.1 % 403.6 31.3 % 392.0 35.5 %SystemsMeasurement &Analytical 122.5 33.3 % 127.0 31.9 % 359.5 32.8 % 375.4 31.1 %SolutionsProcess 31.5 26.2 % 55.5 34.8 % 91.7 23.9 % 162.8 33.7 %TechnologiesTotal $ 413.9 30.3 % $ 430.1 31.8 % $ 1,191.4 29.6 % $ 1,230.1 31.0 % *Segment operating profit is before unallocated corporate general andadministrative expenses; these expenses were $46.3 and $44.9 for the threemonths ended September30, 2020 and 2019, respectively, and $141.0 and $130.1for the nine months ended September30, 2020 and 2019, respectively.

Roper Technologies, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows (unaudited)(Amounts in millions) Nine months ended September 30, 2020 2019Cash flows from operating activities: Net earnings $ 693.9 $ 896.8 Adjustments to reconcile net earnings to cash flows from operating activities:Depreciation and amortization of property, plant 38.3 35.9 and equipmentAmortization of intangible assets 319.8 263.2 Amortization of deferred financing costs 7.4 5.2 Non-cash stock compensation 88.4 80.4 Gain on disposal of business, net of associated ? (87.4 ) income taxIncome tax provision, excluding tax associated withgain on disposal of 197.9 150.4 businessesChanges in operating assets and liabilities, net of acquired businesses: Accounts receivable 126.1 52.1 Unbilled receivables (49.1 ) (26.6 ) Inventories (15.2 ) (25.2 ) Accounts payable and accrued liabilities 53.3 (59.2 ) Deferred revenue (57.5 ) 26.5 Cash tax paid for gain on disposal of businesses (201.9 ) (39.4 ) Cash income taxes paid, excluding tax associatedwith gain on disposal (236.1 ) (255.0 ) of businessesOther, net (14.4 ) (22.1 ) Cash provided by operating activities 950.9 995.6 Cash flows from (used in) investing activities: Acquisitions of businesses, net of cash acquired (5,653.3 ) (2,351.9 ) Capital expenditures (23.0 ) (42.2 ) Capitalized software expenditures (9.8 ) (7.7 ) Proceeds from (used in) disposal of businesses (4.2 ) 220.5 Other, net (2.7 ) (2.5 ) Cash used in investing activities (5,693.0 ) (2,183.8 ) Cash flows from (used in) financing activities: Proceeds from senior notes 3,300.0 1,200.0 Borrowings (payments) under revolving line of 1,160.0 60.0 credit, netDebt issuance costs (42.0 ) (12.0 ) Cash dividends to stockholders (160.0 ) (143.5 ) Proceeds from stock-based compensation, net 72.5 38.8 Treasury stock sales 7.3 5.2 Other (1.4 ) 3.6 Cash flows from financing activities 4,336.4 1,152.1 Effect of foreign currency exchange rate changes on (1.9 ) (5.3 ) cash Net decrease in cash and cash equivalents (407.6 ) (41.4 ) Cash and cash equivalents, beginning of period 709.7 364.4 Cash and cash equivalents, end of period $ 302.1 $ 323.0

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