Fourth Quarter 2022 Highlights
- Revenue increased 14% to
$1.43 billion ; organic revenue increased 7% - GAAP DEPS increased 48% to
$2.32 ; adjusted DEPS increased 17% to$3.92 - GAAP net earnings were
$247 million - Adjusted EBITDA was
$592 million - GAAP operating cash flow of
$56 million included$419 million of tax payments associated with divestiture transactions; adjusted operating cash flow was$476 million
Full Year 2022 Highlights
- Revenue increased 11% to
$5.37 billion ; organic revenue increased 9% - GAAP DEPS increased 22% to
$9.23 ; adjusted DEPS increased 15% to$14.28 - GAAP net earnings were
$986 million - Adjusted EBITDA was
$2.17 billion - GAAP operating cash flow of
$607 million included$954 million of tax payments associated with divestiture transactions; adjusted operating cash flow was$1.56 billion
“I am delighted with the team’s strategic and operational accomplishments achieved throughout 2022,” said
2023 Outlook and Guidance
“Roper is entering 2023 with continued positive momentum. The enhanced quality of our portfolio, increased recurring revenue mix, and sustained demand for our mission critical software and product solutions serve as durable tailwinds for the enterprise. The combination of a strong organic growth outlook, contributions from our 2022 acquisitions, and significant M&A firepower positions us well for double-digit cash flow compounding,” concluded
Roper expects full year 2023 adjusted DEPS of
The Company’s guidance excludes the impact of unannounced future acquisitions or divestitures.
Legal Settlement
GAAP results include a pre-tax charge of
Discontinued Operations
Roper has completed the divestitures of TransCore,
Minority Interest
Following the sale of a majority interest in our industrial businesses to CD&R, Roper now holds a minority interest in Indicor. The fair value of Roper’s equity investment in Indicor will be updated on a quarterly basis and reported as other income (expense). Roper will make a non-GAAP adjustment for the changes in fair value and any tax items related to this investment beginning in the first quarter of 2023.
Conference Call to be Held at
A conference call to discuss these results has been scheduled for
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) | |||||||||||||||||||
Q4 2021 | Q4 2022 | V % | FY 2021 | FY 2022 | V % | ||||||||||||||
Adjusted Revenue Reconciliation | |||||||||||||||||||
GAAP Revenue | $ | 1,257 | $ | 1,431 | 14 % | $ | 4,834 | $ | 5,372 | 11 % | |||||||||
Purchase accounting adjustment to acquired deferred revenue | — | — | 1 | — | |||||||||||||||
Adjusted Revenue | $ | 1,257 | $ | 1,431 | 14 % | $ | 4,835 | $ | 5,372 | 11 % | |||||||||
Components of Adjusted Revenue Growth | |||||||||||||||||||
Organic | 7 % | 9 % | |||||||||||||||||
Acquisitions/Divestitures | 8 % | 3 % | |||||||||||||||||
Foreign Exchange | (2)% | (1)% | |||||||||||||||||
Total Adjusted Revenue Growth | 14 % | 11 % | |||||||||||||||||
Adjusted EBITDA Reconciliation | |||||||||||||||||||
GAAP Net Earnings | $ | 167 | $ | 247 | $ | 805 | $ | 986 | |||||||||||
Taxes | 37 | 61 | 227 | 296 | |||||||||||||||
Interest Expense | 56 | 54 | 234 | 192 | |||||||||||||||
Depreciation | 10 | 9 | 44 | 37 | |||||||||||||||
Amortization | 143 | 174 | 572 | 613 | |||||||||||||||
EBITDA | $ | 413 | $ | 546 | 32 % | $ | 1,882 | $ | 2,124 | 13 % | |||||||||
Purchase accounting adjustment to acquired deferred revenue and commission expense | (1) | (1) | A | (5) | (5) | A | |||||||||||||
Transaction-related expenses for completed acquisitions | — | 3 | B | — | 5 | B | |||||||||||||
Legal settlement charge | — | 45 | C | — | 45 | C | |||||||||||||
Impairment related to merger of CliniSys and Sunquest | 94 | — | 94 | — | |||||||||||||||
Gain on sale related to minority investment in Sedaru | — | — | (28) | — | |||||||||||||||
Adjusted EBITDA | $ | 506 | $ | 592 | 17 % | $ | 1,944 | $ | 2,170 | 12 % | |||||||||
% of Adjusted Revenue | 40.3% | 41.4% | +110 bps | 40.2% | 40.4% | +20 bps | |||||||||||||
Table 2: Adjusted Cash Flow Reconciliation ($M) (From Continuing Operations) | |||||||||||||||
Q4 2021 | Q4 2022 | V % | FY 2021 | FY 2022 | V % | ||||||||||
Operating Cash Flow | $ | 513 | $ | 56 | $ | 1,656 | $ | 607 | |||||||
Taxes paid in period related to divestitures | — | 419 | — | 954 | |||||||||||
Adjusted Operating Cash Flow | $ | 513 | $ | 476 | (7)% | $ | 1,656 | $ | 1,560 | (6)% |
Table 3: Adjusted Diluted Earnings Per Share ("DEPS") Reconciliation (From Continuing Operations) | |||||||||||||||||||||
Q4 2021 | Q4 2022 | V % | FY 2021 | FY 2022 | V % | ||||||||||||||||
GAAP DEPS | $ | 1.57 | $ | 2.32 | 48% | $ | 7.56 | $ | 9.23 | 22% | |||||||||||
Purchase accounting adjustment to acquired deferred revenue and commission expense | (0.01 | ) | (0.01 | ) | A | (0.04 | ) | (0.04 | ) | A | |||||||||||
Transaction-related expenses for completed acquisitions | — | 0.02 | B | — | 0.04 | B | |||||||||||||||
Legal settlement charge | — | 0.33 | C | — | 0.33 | C | |||||||||||||||
Amortization of acquisition-related intangible assets | 1.04 | 1.26 | D | 4.19 | 4.44 | D | |||||||||||||||
Income tax restructuring expense associated with discontinued operations | 0.06 | — | 0.17 | 0.27 | |||||||||||||||||
Impairment related to merger of CliniSys and Sunquest | 0.70 | — | 0.70 | — | |||||||||||||||||
Gain on sale related to minority investment in Sedaru | — | — | (0.20 | ) | — | ||||||||||||||||
Adjusted DEPS | $ | 3.36 | $ | 3.92 | 17% | $ | 12.39 | $ | 14.28 | 15% |
Table 4: Forecasted Adjusted DEPS Reconciliation (From Continuing Operations) | |||||||||||
Q1 2023 | FY 2023 | ||||||||||
Low End | High End | Low End | High End | ||||||||
GAAP DEPS E | $ | 2.55 | $ | 2.59 | $ | 10.92 | $ | 11.22 | |||
Amortization of acquisition-related intangible assets D | 1.26 | 1.26 | 4.98 | 4.98 | |||||||
Financial impacts associated with the minority investment in Indicor | TBD | TBD | TBD | TBD | |||||||
Adjusted DEPS | $ | 3.80 | $ | 3.84 | $ | 15.90 | $ | 16.20 | |||
- 2022 actual results of acquisition-related fair value adjustments to commission expense related to the acquisition of
Vertafore . These adjustments are taxed at 21%. - Transaction-related expenses for the Frontline and viGlobal acquisitions. This adjustment is taxed at 21%.
- Related to settlement of the Berall v.
Verathon patent litigation matter. This adjustment is taxed at 21%. - Actual results and forecast of estimated amortization of acquisition-related intangible assets as shown below ($M, except per share data). These adjustments are taxed at 21%.
Q4 2021A | Q4 2022A | FY 2021A | FY 2022A | Q1 2023E | FY 2023E | ||||||||||||||
Pretax | $ | 141 | $ | 171 | $ | 565 | $ | 600 | $ | 170 | $ | 676 | |||||||
After-tax | $ | 111 | $ | 135 | $ | 446 | $ | 474 | $ | 135 | $ | 534 | |||||||
Per share | $ | 1.04 | $ | 1.26 | $ | 4.19 | $ | 4.44 | $ | 1.26 | $ | 4.98 |
E. Forecasted results do not include any potential impact associated with our minority investment in Indicor and will be adjusted out of all GAAP results in future periods.
Note: Numbers may not foot due to rounding.
About
Contact Information:
Investor Relations
941-556-2601
investor-relations@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 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, 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, including risks related to labor shortages and rising interest rates, 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
Condensed Consolidated Balance Sheets (unaudited) | |||||||
(Amounts in millions) | |||||||
ASSETS: | |||||||
Cash and cash equivalents | $ | 792.8 | $ | 351.5 | |||
Accounts receivable, net | 724.5 | 687.6 | |||||
Inventories, net | 111.3 | 69.2 | |||||
Income taxes receivable | 61.0 | 16.8 | |||||
Unbilled receivables | 91.5 | 81.9 | |||||
Other current assets | 151.3 | 136.1 | |||||
Current assets held for sale | — | 1,078.0 | |||||
Total current assets | 1,932.4 | 2,421.1 | |||||
Property, plant and equipment, net | 85.3 | 82.7 | |||||
15,946.1 | 13,476.3 | ||||||
Other intangible assets, net | 8,030.7 | 6,509.1 | |||||
Deferred taxes | 55.9 | 50.0 | |||||
Equity investment | 535.0 | — | |||||
Other assets | 395.4 | 369.8 | |||||
Assets held for sale | — | 804.9 | |||||
Total assets | $ | 26,980.8 | $ | 23,713.9 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||
Accounts payable | $ | 122.6 | $ | 98.3 | |||
Accrued compensation | 228.8 | 261.9 | |||||
Deferred revenue | 1,370.7 | 1,106.3 | |||||
Other accrued liabilities | 454.6 | 398.7 | |||||
Income taxes payable | 16.6 | 117.3 | |||||
Current portion of long-term debt, net | 699.2 | 799.2 | |||||
Current liabilities held for sale | — | 340.1 | |||||
Total current liabilities | 2,892.5 | 3,121.8 | |||||
Long-term debt, net of current portion | 5,962.5 | 7,122.6 | |||||
Deferred taxes | 1,676.8 | 1,466.2 | |||||
Other liabilities | 411.2 | 390.1 | |||||
Liabilities held for sale | — | 49.4 | |||||
Total liabilities | 10,943.0 | 12,150.1 | |||||
Common stock | 1.1 | 1.1 | |||||
Additional paid-in capital | 2,510.2 | 2,307.8 | |||||
Retained earnings | 13,730.7 | 9,455.6 | |||||
Accumulated other comprehensive loss | (187.0 | ) | (183.1 | ) | |||
(17.2 | ) | (17.6 | ) | ||||
Total stockholders' equity | 16,037.8 | 11,563.8 | |||||
Total liabilities and stockholders' equity | $ | 26,980.8 | $ | 23,713.9 |
Condensed Consolidated Statements of Earnings (unaudited) | |||||||||||||||
(Amounts in millions, except per share data) | |||||||||||||||
Three months ended | Year ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net revenues | $ | 1,430.9 | $ | 1,256.6 | $ | 5,371.8 | $ | 4,833.8 | |||||||
Cost of sales | 428.6 | 376.2 | 1,619.0 | 1,426.2 | |||||||||||
Gross profit | 1,002.3 | 880.4 | 3,752.8 | 3,407.6 | |||||||||||
Selling, general and administrative expenses | 589.8 | 525.5 | 2,228.3 | 2,072.0 | |||||||||||
Impairment of intangible assets | — | 94.4 | — | 94.4 | |||||||||||
Income from operations | 412.5 | 260.5 | 1,524.5 | 1,241.2 | |||||||||||
Interest expense, net | 53.8 | 55.7 | 192.4 | 233.9 | |||||||||||
Other income (expense), net | (50.3 | ) | (0.4 | ) | (50.1 | ) | 24.6 | ||||||||
Earnings before income taxes | 308.4 | 204.4 | 1,282.0 | 1,031.9 | |||||||||||
Income taxes | 61.1 | 37.3 | 296.4 | 226.6 | |||||||||||
Net earnings from continuing operations | 247.3 | 167.1 | 985.6 | 805.3 | |||||||||||
Earnings from discontinued operations, net of tax | 32.5 | 64.8 | 202.8 | 291.4 | |||||||||||
Gain on disposition of discontinued operations, net of tax | 1,648.6 | 55.9 | 3,356.3 | 55.9 | |||||||||||
Net earnings from discontinued operations | 1,681.1 | 120.7 | 3,559.1 | 347.3 | |||||||||||
Net earnings | $ | 1,928.4 | $ | 287.8 | $ | 4,544.7 | $ | 1,152.6 | |||||||
Net earnings per share from continuing operations: | |||||||||||||||
Basic | $ | 2.33 | $ | 1.58 | $ | 9.31 | $ | 7.65 | |||||||
Diluted | $ | 2.32 | $ | 1.57 | $ | 9.23 | $ | 7.56 | |||||||
Net earnings per share from discontinued operations: | |||||||||||||||
Basic | $ | 15.85 | $ | 1.15 | $ | 33.61 | $ | 3.30 | |||||||
Diluted | $ | 15.74 | $ | 1.13 | $ | 33.32 | $ | 3.26 | |||||||
Net earnings per share: | |||||||||||||||
Basic | $ | 18.18 | $ | 2.73 | $ | 42.92 | $ | 10.95 | |||||||
Diluted | $ | 18.06 | $ | 2.70 | $ | 42.55 | $ | 10.82 | |||||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | 106.1 | 105.5 | 105.9 | 105.3 | |||||||||||
Diluted | 106.8 | 106.7 | 106.8 | 106.5 |
Selected Segment Financial Data (unaudited) | |||||||||||||||||||||||
(Amounts in millions; percentages of net revenues) | |||||||||||||||||||||||
Three months ended | Year ended | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||
Net revenues: | |||||||||||||||||||||||
Application Software | $ | 739.8 | $ | 605.5 | $ | 2,639.5 | $ | 2,366.7 | |||||||||||||||
350.5 | 322.5 | 1,378.5 | 1,223.8 | ||||||||||||||||||||
Technology Enabled Products | 340.6 | 328.6 | 1,353.8 | 1,243.3 | |||||||||||||||||||
Total | $ | 1,430.9 | $ | 1,256.6 | $ | 5,371.8 | $ | 4,833.8 | |||||||||||||||
Gross profit: | |||||||||||||||||||||||
Application Software | $ | 509.8 | 68.9 | % | $ | 419.9 | 69.3 | % | $ | 1,816.3 | 68.8 | % | $ | 1,642.9 | 69.4 | % | |||||||
297.7 | 84.9 | % | 272.1 | 84.4 | % | 1,165.6 | 84.6 | % | 1,029.2 | 84.1 | % | ||||||||||||
Technology Enabled Products | 194.8 | 57.2 | % | 188.4 | 57.3 | % | 770.9 | 56.9 | % | 735.5 | 59.2 | % | |||||||||||
Total | $ | 1,002.3 | 70.0 | % | $ | 880.4 | 70.1 | % | $ | 3,752.8 | 69.9 | % | $ | 3,407.6 | 70.5 | % | |||||||
Operating profit*: | |||||||||||||||||||||||
Application Software | $ | 202.6 | 27.4 | % | $ | 161.9 | 26.7 | % | $ | 714.0 | 27.1 | % | $ | 633.1 | 26.8 | % | |||||||
148.6 | 42.4 | % | 133.5 | 41.4 | % | 570.6 | 41.4 | % | 476.8 | 39.0 | % | ||||||||||||
Technology Enabled Products | 111.5 | 32.7 | % | 103.6 | 31.5 | % | 449.1 | 33.2 | % | 415.6 | 33.4 | % | |||||||||||
Total | $ | 462.7 | 32.3 | % | $ | 399.0 | 31.8 | % | $ | 1,733.7 | 32.3 | % | $ | 1,525.5 | 31.6 | % | |||||||
*Segment operating profit is before unallocated corporate general and administrative expenses and non-cash impairment charges of intangible assets. Corporate general and administrative expenses were |
Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||
(Amounts in millions) | ||||||||
Year ended | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings from continuing operations | $ | 985.6 | $ | 805.3 | ||||
Adjustments to reconcile net earnings from continuing operations to cash flows from operating activities: | ||||||||
Depreciation and amortization of property, plant and equipment | 37.3 | 44.0 | ||||||
Amortization of intangible assets | 612.8 | 571.9 | ||||||
Amortization of deferred financing costs | 11.8 | 13.5 | ||||||
Non-cash stock compensation | 118.5 | 123.0 | ||||||
Impairment of intangible assets | — | 94.4 | ||||||
Gain on disposal of assets, net of associated income tax | — | (21.6 | ) | |||||
Income tax provision, excluding tax associated with gain on disposal of businesses and assets | 296.4 | 221.1 | ||||||
Changes in operating assets and liabilities, net of acquired businesses: | ||||||||
Accounts receivable | 2.5 | (73.7 | ) | |||||
Unbilled receivables | (11.1 | ) | (16.4 | ) | ||||
Inventories | (43.1 | ) | (0.3 | ) | ||||
Accounts payable | 21.3 | 16.0 | ||||||
Other accrued liabilities | (7.6 | ) | 27.0 | |||||
Deferred revenue | 52.9 | 162.2 | ||||||
Cash tax paid for gain on disposal of businesses | (953.8 | ) | — | |||||
Cash income taxes paid, excluding tax associated with gain on disposal of businesses | (498.9 | ) | (273.9 | ) | ||||
Other, net | (18.0 | ) | (36.7 | ) | ||||
Cash provided by operating activities from continuing operations | 606.6 | 1,655.8 | ||||||
Cash provided by operating activities from discontinued operations | 128.0 | 356.1 | ||||||
Cash provided by operating activities | 734.6 | 2,011.9 | ||||||
Cash flows from (used in) investing activities: | ||||||||
Acquisitions of businesses, net of cash acquired | (4,280.1 | ) | (217.0 | ) | ||||
Capital expenditures | (40.1 | ) | (28.5 | ) | ||||
Capitalized software expenditures | (30.2 | ) | (29.7 | ) | ||||
Proceeds from sale of assets | — | 27.1 | ||||||
Other, net | (1.4 | ) | (1.1 | ) | ||||
Cash used in investing activities from continuing operations | (4,351.8 | ) | (249.2 | ) | ||||
Proceeds from disposition of discontinued operations | 5,561.8 | 115.6 | ||||||
Cash used in investing activities from discontinued operations | (0.5 | ) | (9.3 | ) | ||||
Cash provided by (used in) investing activities | 1,209.5 | (142.9 | ) | |||||
(Continued) | ||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) - Continued | ||||||||
(Amounts in millions) | ||||||||
Year ended | ||||||||
2022 | 2021 | |||||||
Cash flows from (used in) financing activities: | ||||||||
Payment of senior notes | (800.0 | ) | (500.0 | ) | ||||
Payments under revolving line of credit, net | (470.0 | ) | (1,150.0 | ) | ||||
Debt issuance costs | (3.9 | ) | — | |||||
Cash dividends to stockholders | (262.3 | ) | (236.4 | ) | ||||
14.3 | 15.1 | |||||||
Proceeds from stock based compensation, net | 68.2 | 64.3 | ||||||
Other, net | (0.2 | ) | (0.1 | ) | ||||
Cash used in financing activities from continuing operations | (1,453.9 | ) | (1,807.1 | ) | ||||
Cash used in financing activities from discontinued operations | (11.4 | ) | (6.4 | ) | ||||
Cash used in financing activities | (1,465.3 | ) | (1,813.5 | ) | ||||
Effect of exchange rate changes on cash | (37.5 | ) | (12.3 | ) | ||||
Net increase in cash and cash equivalents | 441.3 | 43.2 | ||||||
Cash and cash equivalents, beginning of year | 351.5 | 308.3 | ||||||
Cash and cash equivalents, end of year | $ | 792.8 | $ | 351.5 |
Source:
2023 GlobeNewswire, Inc., source