01—Abstract
Summary
Summary of the 10-K filed February 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Roper Technologies, Inc. reported net revenues of $5,777.8 milliona for 2021, up from $4,854.2 million in 2020, with income from operations of $1,480.2 million and net earnings of $1,152.6 million, compared with $949.7 million in 2020.
Growth was driven by the Vertafore acquisition and organic growth, with the filing citing organic revenue growth of 8.9% for the company overall. Backlog rose to $2,560.8 millionb at December 31, 2021, up 24.2% from $2,061.8 million. Net cash from operating activities was $2,011.9 million in 2021, versus $1,525.1 million in 2020.
The company is in the midst of a portfolio reshaping. It signed agreements in 2021 to divest TransCore, Zetec and CIVCO Radiotherapy for an aggregate of approximately $3.2 billionc in cash. CIVCO Radiotherapy closed in the fourth quarter of 2021 for approximately $120.0 million, and Zetec closed on January 5, 2022 for approximately $350.0 million.
The TransCore sale, for approximately $2,680.0 milliond, is expected to close in the first quarter of 2022. These businesses are reported as discontinued operations for all periods presented, and the company describes the divestitures as enhancing its mix of high-margin, recurring revenue businesses. Balance sheet leverage declined during 2021.
Total debt excluding unamortized issuance costs was $7,970.3 million, or 40.8% of total capital, down from $9,620.5 million (47.9%) a year earlier, after $1,150.0 million of revolver repayments and the redemption of $500.0 million of senior notes. Risk factors highlighted by the filing include pending Texas driver's license data class actions against subsidiary Vertafore, a patent suit against Verathon, and a $94.4 million non-cash impairment of the Sunquest trade name, which is being merged into CliniSys.
02—Key points
Key Highlights
- Net revenues rose to $5,777.8 million in 2021 from $4,854.2 million in 2020, and net earnings increased to $1,152.6 million from $949.7 million.
- Application Software was the largest segment at $2,380.6 million of net revenues, or 41.2% of total, with an organic revenue growth of 8.2% per the filing.
- Backlog increased 24.2% to $2,560.8 million at December 31, 2021, with growth driven primarily by organic growth.
- Total debt fell to $7,970.3 million from $9,620.5 million, and total debt as a percentage of total capital declined to 40.8% from 47.9%.
- Pending divestitures include TransCore for approximately $2,680.0 million in cash, expected to close in the first quarter of 2022, alongside completed sales of Zetec and CIVCO Radiotherapy.
- The quarterly dividend was increased to $0.62 per share from $0.5625, an increase of 10%, marking the twenty-ninth consecutive year of dividend increases.
- A $99.5 million impairment of intangible assets was recorded in 2021, primarily tied to the Sunquest trade name following the planned merger into CliniSys.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Roper Technologies kept $0.24.
- Revenue$4.83B100.0%
- Cost of revenue−$1.43B29.5%
- Gross profit$3.41B70.5%
- Operating costs−$2.17B44.8%
- Operating income$1.24B25.7%
- Interest, other & tax−$88.2M1.8%
- Net income$1.15B23.9%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 22, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $4.83B$4.02B | +20.2% |
| Cost of Revenue | $1.43B$1.19B | +19.4% |
| Gross Profit | $3.41B$2.83B | +20.5% |
| R&D Expenses | $484.80M$382.40M | +26.8% |
| SG&A Expenses | $2.07B$1.75B | +18.7% |
| Operating Income | $1.24B$1.08B | +14.6% |
| Interest Expense | $233.90M$218.50M | +7.0% |
| Net Income | $1.15B$949.70M | +21.4% |
| EPS (Basic) | $10.95$9.08 | +20.6% |
| EPS (Diluted) | $10.82$8.98 | +20.5% |
| Shares Outstanding (Basic) | 105.30M104.60M | +0.7% |
| Shares Outstanding (Diluted) | 106.50M105.70M | +0.8% |
05—Questions
Frequently Asked Questions
What drove revenue growth in 2021?
Net revenues increased 19.0% to $5,777.8 million. The filing attributes $9.0 percentage points of the growth to acquisitions and divestitures and 1.1 points to foreign exchange, leaving organic revenue growth of 8.9%. Application Software, which includes the Vertafore acquisition completed in September 2020, grew 32.3% in total, with 23.1 points from acquisitions and divestitures.
How much debt does Roper carry and how is it changing?
Total consolidated indebtedness was $7,921.8 million on the balance sheet at December 31, 2021, with total debt excluding unamortized debt issuance costs of $7,970.3 million. Debt declined from $9,620.5 million a year earlier, primarily due to $1,150.0 million of revolver repayments and the redemption of $500.0 million of 2.80% senior notes. The company had $470.0 million outstanding on its $3,000.0 million revolving credit facility.
What is the status of the TransCore divestiture?
Roper signed a definitive agreement on October 1, 2021 to sell TransCore to an affiliate of Singapore Technologies Engineering Ltd. for approximately $2,680.0 million in cash. The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including regulatory approvals. TransCore carries $634.2 million of the company's $659.7 million of outstanding surety bonds.
What legal and accounting risks did the company disclose?
Vertafore is a defendant in putative class actions related to a November 2020 incident in which three data files containing Texas driver license information were stored in an unsecured external service. The Allen and Mulvey cases each purport to represent approximately 27.7 million individuals, and the Texas Attorney General is investigating. Management believes the actions should not have a material adverse effect. Separately, a $94.4 million non-cash impairment was recorded on the Sunquest trade name, using a 0.5% royalty rate versus 3.5% the prior year.
How did shareholder returns and cash generation look?
Cash provided by operating activities rose to $2,011.9 million in 2021 from $1,525.1 million in 2020. Cash dividends paid were $236.4 million, and diluted earnings per share were $10.82 versus $8.98 in 2020. The five-year cumulative total return for Roper common stock reached $276.51 on a $100 investment made December 31, 2016, compared with $233.41 for the S&P 500.
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