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Roper Technologies Announces Record Third Quarter Results

The following excerpt is from the company's SEC filing.

GAAP DEPS of $1.58; Adjusted DEPS of $1.61

YTD Free Cash Flow Increased 15% to $632 million

reported financial results for the third quarter ended September 30, 2015.

Roper reports results, including revenue, gross margin, 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.

Third quarter GAAP diluted earnings per share (DEPS) were $1.58, a 3% increase over the prior year , and adjusted DEPS were $1.61, a 4% increase. GAAP revenue was $884 million and adjusted revenue increased to $886 million. GAAP operating profit increased 2% to $250 million, representing 28.3% of revenue. Adjusted operating profit increased to $255 million and adjusted operating margin increased 80 basis points to 28.7%. Orders increased to $894 million and enterprise book-to-bill was 1.01x for the quarter.

GAAP gross margin increased 110 basis points over the prior year to 60.4% and adjusted gross margin increased to 60.7%, a 130 basis point gain. Operating cash flow increased to $227 million, or 25.6% of adjusted revenue, and free cash flow increased to $220 million. Year to date free cash flow increased to $632 million, 15% higher than the prior year.

"Our businesses executed very well in the quarter despite continued headwinds in some energy markets and foreign currency translation," said Brian Jellison, Roper's Chairman, President and CEO. "Margin performance continued to be exceptional across the enterprise. EBITDA margins increased to a record 34.4% in the quarter. Our medical, software and toll and traffic businesses continued to grow organically."


On October 21, 2015, Roper completed the acquisition of Aderant Holdings, Inc. and on October 2, 2015, Roper completed the sale of ABEL Pumps LP to Hillenbrand, Inc.

"We have now deployed over $1.7 billion in acquisitions in 2015. We continue to execute on our disciplined acquisition strategy focused on companies with leadership positions in niche markets with high recurring revenue, strong cash returns and excellent management teams," said Mr. Jellison.

Roper also announced that it has signed a definitive agreement to acquire CliniSys Group Ltd., a leading European provider of laboratory information management systems, for £170 million. CliniSys expands Roper's suite of diagnostic-related software. Roper expects the acquisition to be completed in the first quarter of 2016, following the completion of customary merger control review.

2015 Outlook and Guidance

Roper is updating its full year adjusted diluted earnings per share guidance to $6.69 – $6.75, from its previous range of $6.61 - $6.75, and establishing fourth quarter adjusted diluted earnings per share guidance of $1.83 - $1.89. The company's guidance excludes the impact of any future acquisitions or divestitures.

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: Q3 Revenue Growth Detail

Q3 2015

Q3 2014

Q3 GAAP Revenue

Add: Purchase Accounting Adjustment to Acquired Deferred Revenue (FoodLink, SHP, Strata, SoftWriters, Data Innovations, On Center)

Q3 Adjusted Revenue

Components of Adjusted Revenue Growth


Acquisitions / Divestitures

Foreign Exchange