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Section 1: 8-K

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

July 31, 2017
 
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
 
ROPER TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)

1-12273
51-0263969
 
 
 
 
(COMMISSION FILE NUMBER)
(IRS EMPLOYER IDENTIFICATION NO.)
 
 
 
 
6901 PROFESSIONAL PKWY. EAST, SUITE 200, SARASOTA, FLORIDA
34240
 
 
 
 
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)

(941) 556-2601
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [ ]
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.02. Results of Operations and Financial Condition.

On July 31, 2017, Roper Technologies, Inc. (the "Company") issued a press release containing information about the Company's results of operations for the quarter ended June 30, 2017. A copy of the press release is furnished as Exhibit 99.1.
 
 
 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
 
 
99.1 Press Release of the Company dated July 31, 2017.
 
 
 

 
 
Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
Roper Technologies, Inc.
 
 
 
 
 
 
 
(Registrant)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BY:
/s/ Robert Crisci
 
Date: July 31, 2017
 
 
 
 
 
Robert Crisci,
Vice President and Chief Financial Officer
 
 
 
 

 



EXHIBIT INDEX
 
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
 
99.1
 
Press Release of the Company dated July 31, 2017
 



(Back To Top)

Section 2: EX-99.1

Contact Information:
Investor Relations
941-556-2601
investor-relations@ropertech.com
Roper Technologies, Inc.
 


Roper Technologies Announces Second Quarter Results
GAAP Revenue Increased 22%; Adjusted Revenue Increased 23%
Raising Full Year Adjusted DEPS Guidance

Sarasota, Florida, July 31, 2017 ... Roper Technologies, Inc. (NYSE: ROP), a diversified technology company, reported financial results for the second quarter ended June 30, 2017.

Roper reports results – including revenue, gross margin, operating margin, net income, and diluted earnings per share ("DEPS") – on a GAAP basis and an adjusted basis.

Second quarter GAAP revenue increased 22% to $1.13 billion and adjusted revenue grew 23% to $1.15 billion. GAAP gross margin increased 130 basis points to 62.2% and adjusted gross margin increased 170 basis points to 62.7%.

GAAP DEPS were $1.74, a 13% increase, while adjusted DEPS was $2.24, a 20% increase. Adjusted EBITDA grew 26% to $394 million and adjusted EBITDA margin grew 70 basis points to 34.3%.

"Our businesses continued to deliver excellent revenue and EBITDA growth in the quarter," said Brian Jellison, Roper's Chairman, President and CEO. "Revenue grew organically 6% with broad-based contributions from all four reporting segments. We also benefited significantly from our recent acquisitions, Deltek and ConstructConnect, which continue to perform exceptionally well.

"Outstanding margin and cash flow performance once again demonstrated the ability of our asset-light, niche market businesses to deliver excellent results. EBITDA as a percentage of revenue increased in all segments. Importantly, our year to date operating cash flow grew 33%, allowing us to reduce debt by $570 million. We are very pleased with our strong first half performance and we are well positioned to continue our positive momentum throughout the second half of the year," concluded Mr. Jellison.
 

2017 Guidance

Roper is raising its full year 2017 guidance and now expects adjusted DEPS of $9.12 - $9.30, compared to previous guidance of $8.98 - $9.28.

In the third quarter of 2017, the Company expects adjusted DEPS to be between $2.24 and $2.30.

The Company's guidance excludes the impact of future acquisitions or divestitures.


Conference Call to be Held at 8:30 AM (ET) Today

A conference call to discuss these results has been scheduled for 8:30 AM ET on Monday, July 31, 2017. The call can be accessed via webcast or by dialing +1 888-596-2581 (US/Canada) or +1 719-325-4799, using confirmation code 6827048. Webcast information and conference call materials will be made available in the Investors section of Roper's 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 using the following registration URL https://event.replay with access code 6827048.

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 Reconciliation and Growth Detail ($M)
     
Q2 2017
     
Q2 2016
     
V%
 
GAAP Revenue
 
$
1,135
   
$
932
     
22
%
Purchase accounting adjustment to acquired deferred revenueA,B
   
16
A 
   
2
B 
       
Adjusted Revenue
 
$
1,151
   
$
934
     
23
%
                         
Components of Adjusted Revenue Growth
                       
Organic
                   
6
%
Acquisitions/Divestitures
                   
18
%
Foreign Exchange
                   
(1
)%
Total Adjusted Revenue Growth
                   
23
%


Table 2:  Adjusted DEPS Reconciliation
     
Q2 2017
     
Q2 2016
     
V%
 
GAAP Diluted Earnings Per Share (DEPS)
 
$
1.74
   
$
1.54
     
13
%
Purchase accounting adjustment to acquired deferred revenueA,B
   
0.10
     
0.02
         
Purchase accounting adjustment for commission expenseC
   
(0.01
)
   
-
         
Amortization of Acquisition-related intangible assets, after taxD
   
0.46
     
0.31
         
Gain on Sale of divested energy product lineE
   
(0.06
)
   
-
         
Impairment Charge on minority investmentF
   
0.01
     
-
         
Adjusted DEPS
 
$
2.24
   
$
1.87
     
20
%



Table 3:  Adjusted Gross Margin Reconciliation ($M)
     
Q2 2017
     
Q2 2016
     
 V Bps
 
GAAP Revenue
 
$
1,135
   
$
932
          
Purchase accounting adjustment to acquired deferred revenueA,B
   
16
 A    
2
 B        
Adjusted Revenue
 
$
1,151
   
$
934
          
                              
GAAP Gross Profit
 
$
706
   
$
568
          
Purchase accounting adjustment to acquired deferred revenueA,B
   
16
 A    
2
 B        
Adjusted Gross Profit
 
$
722
   
$
570
          
                              
GAAP Gross Margin
   
62.2
%
   
60.9
%
   
 +130 bps
 
Adjusted Gross Margin
   
62.7
%
   
61.0
%
   
 +170 bps
 


Table 4:  Adjusted EBITDA Reconciliation ($M)
     
Q2 2017
     
Q2 2016
   
V% / Bps
 
GAAP Revenue
 
$
1,135
   
$
932
       
Purchase accounting adjustment to acquired deferred revenueA,B
   
16
 A    
2
 B      
Adjusted Revenue
 
$
1,151
   
$
934
       
                       
GAAP Net Earnings
 
$
180
   
$
158
       
Taxes
   
76
     
67
       
Interest expense
   
46
     
27
       
Depreciation
   
12
     
9
       
Amortization
   
74
     
50
       
Rounding
   
(1
)
             
EBITDA
 
$
387
   
$
311
     
24
%
% of GAAP Revenue
   
34.1
%
   
33.4
%
 
+70 bps
 
                         
Purchase accounting adjustment to acquired deferred revenue, pretaxA,B
   
16
 A    
2
 B        
Purchase accounting adjustment for commission expense, pretaxC
   
(1
)
   
-
         
Gain on sale of divested Energy product lineE
   
(9
)
   
-
         
Impairment charge on minority investmentF
   
2
     
-
         
Rounding
   
(1
)
   
1
         
Adjusted EBITDA
 
$
394
   
$
314
     
26
%
% of Adjusted Revenue
   
34.3
%
   
33.6
%
 
+70bps
 

Table 5:  Adjusted Operating Cash Flow Reconciliation

     
1H 2017
     
1H 2016
     
V%
 
GAAP Operating Cash Flow
 
$
550
   
$
377
     
46
%
Cash paid for taxes on 2015 ABEL sale
   
-
     
37
         
Adjusted Operating Cash Flow
 
$
550
   
$
414
     
33
%



Table 6:  Forecasted Adjusted DEPS Reconciliation

   
Q3 2017
      Full Year 2017      
   
Low End
   
High End
   
Low End
   
High End
 
GAAP DEPS
 
$
1.72
   
$
1.78
   
$
7.03
   
$
7.21
 
Purchase accounting adjustments to acquired deferred revenue and commissionsG
   
0.07
     
0.07
     
0.32
     
0.32
 
Amortization of acquisition-related intangible assets, after-taxD
   
0.45
     
0.45
     
1.82
     
1.82
 
Gain on sale of divested Energy product lineE
                   
(0.06
)
   
(0.06
)
Impairment charge on minority investmentF
                   
0.01
     
0.01
 
Adjusted DEPS
 
$
2.24
   
$
2.30
   
$
9.12
   
$
9.30
 



A
Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of ConstructConnect ($3.0M pretax, $1.9M after-tax), and Deltek ($13.2M pretax, $8.6M after-tax).
B
Acquisition-related fair value adjustments to deferred revenue related to the acquisitions of On Center Software ($0.4M pretax, $0.2M after-tax), Aderant ($1.8M pretax, $1.2M after-tax), Atlas Medical ($0.1M pretax, $0.1M after-tax) and CliniSys ($0.2M pretax, $0.1M after-tax).
C
Purchase Accounting Adjustment for Commission Expense related to the acquisition of Deltek ($1.5M pretax, $1.0M after-tax).
D
Actual results and forecast of estimated amortization of acquisition-related intangible assets ($M); for comparison purposes, prior period amounts are also shown below. Tax Rate of 35% applied to amortization in all periods.
     
Q2 2016A
 
   
Q3 2016A
 
 
FY 2016A
     
Q2 2017A
 
   
Q3 2017E
 
 
FY 2017E
 
Pretax
 
$
50
   
$
49
   
$
201
   
$
73
   
$
72
   
$
289
 
After-tax
 
$
32
   
$
32
   
$
131
   
$
48
   
$
47
   
$
188
 
Per share
 
$
0.31
   
$
0.31
   
$
1.27
   
$
0.46
   
$
0.45
   
$
1.82
 
E
Gain on sale of divested Energy product line ($9.4M pretax, $6.1M after-tax).
F
Impairment charge on minority investment ($1.8M pretax, $1.1M after-tax).
G
Forecasted acquisition-related fair value adjustments to acquired deferred revenue and commissions of ConstructConnect and Deltek, as shown below ($M, except per share data).
 
     
Q3 2017
   
FY 2017E
 
Pretax
 
$
10
   
$
51
 
After-tax
 
$
7
   
$
33
 
Per Share
 
$
0.07
   
$
0.32
 
 

About Roper Technologies

Roper Technologies is a constituent of the S&P 500, Fortune 1000, and the Russell 1000 indices. Roper designs and develops software (both software-as-a-service and licensed), and engineered products and solutions for healthcare, transportation, food, energy, water, education and other niche markets worldwide. Additional information about Roper is available on the Company's 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, 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 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, 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 thousands)
           
             
             
   
June 30,
   
December 31,
 
ASSETS
 
2017
   
2016
 
             
CURRENT ASSETS:
           
  Cash and cash equivalents
 
$
663,344
   
$
757,200
 
  Accounts receivable
   
576,362
     
619,854
 
  Inventories
   
199,842
     
181,952
 
  Unbilled receivable
   
146,944
     
129,965
 
  Other current assets
   
114,619
     
87,530
 
    Total current assets
   
1,701,111
     
1,776,501
 
                 
PROPERTY, PLANT AND EQUIPMENT, NET
   
142,641
     
141,318
 
                 
OTHER ASSETS:
               
  Goodwill and other intangible assets, net
   
12,258,824
     
12,302,985
 
  Deferred taxes
   
31,539
     
30,620
 
  Other assets
   
79,173
     
73,503
 
    Total other assets
   
12,369,536
     
12,407,108
 
                 
TOTAL ASSETS
 
$
14,213,288
   
$
14,324,927
 
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES:
               
  Accounts payable
 
$
155,371
   
$
152,067
 
  Accrued compensation
   
156,665
     
161,730
 
  Deferred revenue
   
516,362
     
488,399
 
  Other accrued liabilities
   
238,975
     
219,339
 
  Income taxes payable
   
29,826
     
22,762
 
  Current portion of long-term debt
   
401,297
     
400,975
 
    Total current liabilities
   
1,498,496
     
1,445,272
 
                 
NONCURRENT LIABILITIES:
               
  Long-term debt
   
5,241,103
     
5,808,561
 
  Deferred taxes
   
1,158,965
     
1,178,205
 
  Other liabilities
   
114,238
     
104,024
 
    Total liabilities
   
8,012,802
     
8,536,062
 
                 
STOCKHOLDERS' EQUITY:
               
  Common stock
   
1,041
     
1,036
 
  Additional paid-in capital
   
1,554,562
     
1,489,067
 
  Retained earnings
   
4,908,492
     
4,642,402
 
  Accumulated other comprehensive earnings
   
(244,812
)
   
(324,739
)
  Treasury stock
   
(18,797
)
   
(18,901
)
    Total stockholders' equity
   
6,200,486
     
5,788,865
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
14,213,288
   
$
14,324,927
 


Roper Technologies, Inc. and Subsidiaries
                       
Condensed Consolidated Statements of Earnings (unaudited)
                   
(Amounts in thousands, except per share data)
                   
                         
                         
   
Three months ended
   
Six months ended
 
   
June 30,
   
June 30,
 
   
2017
   
2016
   
2017
   
2016
 
                         
Net sales
 
$
1,134,671
   
$
931,558
   
$
2,220,976
   
$
1,833,981
 
Cost of sales
   
429,021
     
364,038
     
847,712
     
706,942
 
                                 
Gross profit
   
705,650
     
567,520
     
1,373,264
     
1,127,039
 
                                 
Selling, general and administrative expenses
   
411,392
     
314,442
     
820,750
     
628,970
 
                                 
Income from operations
   
294,258
     
253,078
     
552,514
     
498,069
 
                                 
Interest expense
   
45,813
     
26,863
     
91,678
     
54,276
 
Other income/(expense), net
   
6,969
     
(1,334
)
   
5,922
     
(1,463
)
                                 
Earnings from continuing operations before
                               
   income taxes
   
255,414
     
224,881
     
466,758
     
442,330
 
                                 
Income taxes
   
75,858
     
66,812
     
129,131
     
132,845
 
                                 
Net Earnings
 
$
179,556
   
$
158,069
   
$
337,627
   
$
309,485
 
                                 
                                 
                                 
                                 
                                 
Earnings per share:
                               
  Basic
 
$
1.76
   
$
1.56
   
$
3.31
   
$
3.06
 
  Diluted
 
$
1.74
   
$
1.54
   
$
3.27
   
$
3.02
 
                                 
Weighted average common and common
                               
  equivalent shares outstanding:
                               
    Basic
   
102,081
     
101,249
     
101,983
     
101,160
 
    Diluted
   
103,409
     
102,466
     
103,247
     
102,376
 
 

Roper Technologies, Inc. and Subsidiaries
                                           
Selected Segment Financial Data (unaudited)
                                           
(Amounts in thousands and percents of net sales)
                                           
                                                 
                                                 
   
Three months ended June 30,
   
Six months ended June 30,
 
   
2017
   
2016
   
2017
   
2016
 
   
Amount
   
%
   
Amount
   
%
   
Amount
   
%
   
Amount
   
%
 
Net sales:
                                               
  Medical & Scientific Imaging
 
$
350,764
           
340,585
         
$
698,999
         
$
672,799
       
  RF Technology
   
460,497
           
288,761
           
890,116
           
568,971
       
  Industrial Technology
   
192,867
           
178,627
           
376,271
           
349,862
       
  Energy Systems & Controls
   
130,543
           
123,585
           
255,590
           
242,349
       
    Total
 
$
1,134,671
         
$
931,558
         
$
2,220,976
         
$
1,833,981
       
                                                         
                                                         
Gross profit:
                                                       
  Medical & Scientific Imaging
 
$
254,028
     
72.4
%
 
$
246,396
     
72.3
%
 
$
505,958
     
72.4
%
 
$
493,293
     
73.3
%
  RF Technology
   
279,735
     
60.7
%
   
163,005
     
56.4
%
   
531,213
     
59.7
%
   
323,370
     
56.8
%
  Industrial Technology
   
98,167
     
50.9
%
   
89,709
     
50.2
%
   
191,318
     
50.8
%
   
175,729
     
50.2
%
  Energy Systems & Controls
   
73,720
     
56.5
%
   
68,410
     
55.4
%
   
144,775
     
56.6
%
   
134,647
     
55.6
%
    Total
 
$
705,650
     
62.2
%
 
$
567,520
     
60.9
%
 
$
1,373,264
     
61.8
%
 
$
1,127,039
     
61.5
%
                                                                 
                                                                 
Operating profit*:
                                                               
  Medical & Scientific Imaging
 
$
121,315
     
34.6
%
 
$
114,271
     
33.6
%
 
$
241,108
     
34.5
%
 
$
228,727
     
34.0
%
  RF Technology
   
119,558
     
26.0
%
   
89,354
     
30.9
%
   
208,542
     
23.4
%
   
178,120
     
31.3
%
  Industrial Technology
   
58,249
     
30.2
%
   
51,291
     
28.7
%
   
111,862
     
29.7
%
   
98,050
     
28.0
%
  Energy Systems & Controls
   
32,867
     
25.2
%
   
27,769
     
22.5
%
   
63,103
     
24.7
%
   
51,951
     
21.4
%
    Total
 
$
331,989
     
29.3
%
 
$
282,685
     
30.3
%
 
$
624,615
     
28.1
%
 
$
556,848
     
30.4
%
                                                                 
                                                                 
Net Orders:
                                                               
  Medical & Scientific Imaging
 
$
352,018
           
$
338,436
           
$
702,795
           
$
682,286
         
  RF Technology
   
488,476
             
318,231
             
929,765
             
599,356
         
  Industrial Technology
   
201,655
             
175,967
             
396,971
             
354,872
         
  Energy Systems & Controls
   
129,510
             
123,704
             
256,237
             
246,474
         
    Total
 
$
1,171,659
           
$
956,338
           
$
2,285,768
           
$
1,882,988
         
                                                                 
                                                                 
*Segment operating profit is before unallocated corporate general and administrative expenses.
                                 
These expenses were $37,731 and $29,607 for the three months ended June 30, 2017 and 2016,
                                 
respectively, and $72,101 and $58,779 for the six months ended June 30, 2017 and 2016, respectively.
                                 

Roper Technologies, Inc. and Subsidiaries
           
Condensed Consolidated Statements of Cash Flows (unaudited)
       
(Amounts in thousands)
           
             
             
   
Six months ended
 
   
June 30,
 
   
2017
   
2016
 
             
Net earnings
 
$
337,627
   
$
309,485
 
Non-cash items:
               
Depreciation
   
24,284
     
19,052
 
Amortization
   
147,186
     
99,719
 
Stock-based compensation expense
   
43,864
     
39,092
 
Gain on sale of assets
   
(9,393
)
   
-
 
Income taxes
   
(51,019
)
   
(77,931
)
Changes in assets and liabilities:
               
Receivables
   
33,197
     
(10,202
)
Inventory
   
(13,177
)
   
(104
)
Accounts payable
   
(360
)
   
(5,481
)
Accrued liabilities
   
48,996
     
7,763
 
Other, net
   
(11,113
)
   
(4,561
)
  Cash provided by operating activities
   
550,092
     
376,832
 
                 
Business acquisitions, net of cash acquired
   
(35,515
)
   
(274,968
)
Capital expenditures
   
(24,797
)
   
(18,348
)
Capitalized software expenditures
   
(5,725
)
   
(1,249
)
Proceeds from sale of assets
   
10,506
     
758
 
Other, net
   
(6,531
)
   
570
 
  Cash used in investing activities
   
(62,062
)
   
(293,237
)
                 
Revolver payments, net
   
(570,000
)
   
(180,000
)
Dividends
   
(70,937
)
   
(60,383
)
Proceeds from stock-based compensation, net
   
20,711
     
8,516
 
Other, net
   
1,854
     
(110
)
  Cash used in financing activities
   
(618,372
)
   
(231,977
)
                 
Effect of exchange rate changes on cash
   
36,486
     
(7,835
)
                 
Net decrease in cash and equivalents
   
(93,856
)
   
(156,217
)
Cash and equivalents, beginning of period
   
757,200
     
778,511
 
                 
Cash and equivalents, end of period
 
$
663,344
   
$
622,294
 
 
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