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IDEX Corporation Reports Record Sales, Income and Free Cash Flow; 16 Percent Sales Growth and 19 Percent Increase in Diluted EPS

NORTHBROOK, Ill.--(BUSINESS WIRE)--July 24, 2007--IDEX Corporation (NYSE: IEX) today announced its financial results for the quarter ended June 30, 2007. From continuing operations, orders in the second quarter were up 17 percent, sales increased 16 percent, and income rose 21 percent to $41.8 million compared to the second quarter of 2006. Diluted earnings per share from continuing operations were 51 cents versus 43 cents in the year-ago quarter.


    Second Quarter 2007 Highlights (from Continuing Operations)

    --  Orders in the second quarter of 2007 were $339.3 million, 17
        percent higher than a year ago; excluding foreign currency
        translation and acquisitions, organic orders growth was 7
        percent.

    --  Second quarter sales of $344.5 million rose 16 percent;
        excluding foreign currency translation and acquisitions,
        organic sales growth was 6 percent.

    --  Operating margin at 20 percent was 110 basis points higher
        than a year ago.

    --  Income increased 21 percent to $41.8 million.

    --  Diluted EPS at 51 cents was 8 cents or 19 percent ahead of
        last year.

    --  EBITDA of $78.7 million was 23 percent of sales and covered
        interest expense by 13 times.

    --  Second quarter free cash flow was $58.3 million.

    --  As previously announced, the acquisition of Quadro Engineering
        was completed in a strategic expansion of the company's Fluid
        & Metering Technologies segment.

"We are pleased with our performance in the first six months of 2007.
As we move into the second half of 2007, the markets we serve and our
overall business fundamentals remain solid. We foresee continued
strong global demand for our fluid and metering, fire and safety and
engineered band clamping products. Within health and science, we
believe our core analytical instrumentation, IVD, biotechnology and
the other end market segments remain highly attractive.

"For the second half of 2007, organic growth rates in both Fluid &
Metering Technologies and Fire & Safety Products are projected to
achieve results that are consistent with their respective first half
performance. The third quarter of 2007 for Dispensing Equipment is
expected to result in flat sales versus the prior year and operating
margin rates that are consistent with prior-year levels, due to timing
of retail projects. The second half 2007 growth rate for Health &
Science Technologies will continue to be adversely impacted by the
completion and the exiting of specific, maturing OEM contracts. As we
progress through 2007, we are focused throughout the company on
generating growth and reinvesting in new products, markets and
strategic acquisitions that complement our current capabilities."

Lawrence D. Kingsley
Chairman and Chief Executive Officer
Second Quarter Financial Results
----------------------------------------------------------------------
(Dollars in millions, except per share amounts)



                                        For the Quarter Ended
                                   June 30,               March 31,
                                ---------------        ---------------
                                 2007    2006  Change   2007  Change
                                ------- ------ ------  ------ ------
Orders Written                   $339.3 $289.9     17% $360.0    (6)%
Sales                             344.5  296.6     16   333.3      3
Operating Income                   68.9   56.0     23    61.6     12
Operating Margin                   20.0%  18.9%   110bp  18.5%   150bp
Income from Continuing
 Operations                       $41.8  $34.6     21%  $36.8     14%
Net Income                         41.6   35.0     19    36.7     14
Diluted EPS:
  Income from Continuing
   Operations                       .51    .43     19     .45     13
  Net Income                        .51    .43     19     .45     13

Other Data (from Continuing
 Operations)
  - Income before Taxes           $63.3  $52.2     21%  $55.7     14%
  - Depreciation and
   Amortization                     9.3    7.8     20     9.1      2
  - Interest                        6.1    4.1     49     6.4    (5)
  - EBITDA                         78.7   64.1     23    71.2     10
  - Cash Flow from Operating
   Activities                      63.8   44.7     43    15.7    307
  - Capital Expenditures            7.4    5.7     30     5.4     37
  - Excess Tax Benefit from
   Stock-Based Compensation         1.9    2.1   (11)     1.8      5
  - Free Cash Flow                 58.3   41.1     42    12.1    384

Q2 Orders, Sales, Income and EPS from Continuing Operations Increase Year-over-Year

New orders in the quarter totaled $339.3 million, 17 percent higher than the same period in 2006. Excluding the impact of acquisitions and foreign currency translation, orders were up 7 percent.

Sales in the second quarter of $344.5 million increased 16 percent from the prior-year period. Excluding the impact of acquisitions and foreign currency translation, organic growth was 6 percent. Sales to international customers represented approximately 47 percent of total sales for the second quarter of 2007 versus 45 percent in the same period of 2006.

Second quarter operating margin was 20 percent, 110 basis points higher than the 18.9 percent reported in the prior-year period. Gross margin of 42.8 percent was 130 basis points higher than the second quarter of 2006. Volume leverage, impact from acquisitions, strategic sourcing and operational excellence initiatives drove the gross margin improvement. Selling, general and administrative expenses as a percent of sales were 22.8 percent, slightly higher compared to the prior year as a result of acquisitions and reinvestment in the business to drive organic growth.

Income from continuing operations of $41.8 million increased 21 percent over the second quarter of 2006. Diluted earnings per share from continuing operations of 51 cents improved 8 cents, or 19 percent, from the second quarter of 2006.

Year-to-Date Financial Results
----------------------------------------------------------------------
(Dollars in millions, except per share amounts)


                                             Six Months Ended June 30
                                              2007     2006    Change
                                            -------- -------- --------
Orders Written                                $699.2   $584.0      20%
Sales                                          677.8    563.0       20
Operating Income                               130.4    103.8       26
Operating Margin                               19.2%    18.4%     80bp
Income from Continuing Operations              $78.7    $64.2      23%
Net Income                                      78.3     65.0       20
Diluted EPS:
  Income from Continuing Operations              .96      .79       22
  Net Income                                     .96      .80       20

Other Data
  - Income before Taxes                       $119.1    $97.0      23%
  - Depreciation and Amortization               18.5     14.1       31
  - Interest                                    12.4      7.0       78
  - EBITDA                                     150.0    118.1       27
  - Cash Flow from Operating Activities         79.5     68.8       16
  - Capital Expenditures                        12.8      9.7       32
  - Excess Tax Benefit from Stock-Based
   Compensation                                  3.6      4.6     (21)
  - Free Cash Flow                              70.3     63.7       10

First Half Orders, Sales, Income and EPS from Continuing Operations Ahead of Last Year

New orders for the first six months of 2007 totaled $699.2 million, 20 percent higher than the first six months of last year. Excluding the impact of acquisitions and foreign currency translation, orders in the first six months of 2007 were 7 percent higher than in 2006.

Sales for the first six months of 2007 increased 20 percent to $677.8 million from $563.0 million a year earlier. Excluding the impact of acquisitions and foreign currency translation, organic growth was 7 percent. Sales to international customers from base businesses represented approximately 45 percent of total sales for the first six months of both 2007 and 2006.

First half operating margin was 19.2 percent, 80 basis points higher than the 18.4 percent reported in the prior-year period. Gross margin in first half 2007 improved 100 basis points to 42.4 percent, while selling, general and administrative expenses as a percent of sales of 23.2 percent increased by 20 basis points from the first half of 2006, reflecting acquisitions and reinvestment in the business to drive organic growth.

Year-to-date income from continuing operations of $78.7 million increased 23 percent compared to 2006. Diluted earnings per share from continuing operations of 96 cents rose 17 cents, or 22 percent, from the 79 cents recorded for the first half of 2006.

Segment Results

Fluid & Metering Technologies sales in the second quarter of $141.1 million reflected 31 percent growth (23 percent acquisitions, 7 percent organic and 1 percent foreign currency translation). Strong global demand for infrastructure-related applications, coupled with acquisitions, drove the sales growth within the segment. Operating margin of 21.4 percent represented a 130 basis point improvement compared with the second quarter of 2006.

Health & Science Technologies sales in the second quarter of $82.4 million reflected 1 percent growth. Compared to second quarter 2006, the expected decline from the completion of specific, maturing OEM contracts resulted in approximately 200 basis points of lower sales growth in the quarter. Operating margin of 18.4 percent represented a 50 basis point improvement compared with the second quarter of 2006.

Dispensing Equipment sales of $49.9 million in the second quarter reflected 12 percent growth (7 percent organic and 5 percent foreign currency translation) due primarily to the improved market conditions in Europe. Operating margin of 28.6 percent represented a 230 basis point improvement compared with the second quarter of 2006.

Fire & Safety/Diversified Products sales in the second quarter of $72.8 million reflected 13 percent growth (10 percent organic and 3 percent foreign currency translation) driven by continued innovation and increased global demand. Operating margin of 24.9 percent represented a 30 basis point decline compared with the second quarter of 2006.

For the second quarter of 2007, Fluid & Metering Technologies contributed 41 percent of sales and 39 percent operating income; Health & Science Technologies accounted for 24 percent of sales and 20 percent of operating income; Dispensing Equipment accounted for 14 percent of sales and 18 percent of operating income; and Fire & Safety/Diversified Products represented 21 percent of sales and 23 percent of operating income.

Acquisition of Quadro Engineering

As previously announced, on June 12, 2007, the company acquired Quadro Engineering, a leading provider of particle control solutions for the pharmaceutical and bio-pharmaceutical markets. Headquartered in Waterloo, Ontario, Canada, Quadro Engineering has revenues of approximately $22 million (USD) and is being operated as a standalone unit within the company's Fluid & Metering Technologies segment. The addition of Quadro Engineering is expected to be accretive to IDEX's earnings beginning in 2008.

"We are extremely pleased with Quadro Engineering's decision to become part of IDEX," said IDEX Chairman and Chief Executive Officer Larry Kingsley. "Quadro is a technology leader in customized, critical particle control applications, providing a basis for us to serve selective, higher growth sanitary applications worldwide. Quadro's capabilities expand IDEX's ability to provide customized solutions for the movement, transformation, measurement and dispensing of high value fluids and solids."

Strong Financial Position

IDEX ended the quarter with total assets of $1.7 billion and working capital of $98 million. Total borrowings were $329 million at June 30, 2007. Free cash flow (cash flow from operating activities less capital expenditures plus the excess tax benefit from stock-based compensation) for the first half of 2007 was $70 million. Year-to-date, 2007 EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $150 million (22 percent of sales) and covered interest expense by 12 times. Debt-to-total capitalization at June 30, 2007, was 24 percent.

Progress Continues on Growth Initiatives: Commercial and Operational Excellence

"Commercial and operational excellence remain at the foundation of our business to drive innovation and leveraged earnings growth," Kingsley said. "We continue to reinvest in marketing and sales to expand our served market and deploy new, company-wide best practices in adjacent market identification. Our focus on applied fluidics solutions and other carefully targeted engineered products segments, such as our expansion into critical particle control applications through the recent acquisition of Quadro, continues to serve as the basis for geographic, product and industry segment expansion.

"Our operating mindset, which centers on Mixed Model Lean, enables us to respond flexibly to new market and customer requirements across all four business segments," Kingsley said. "We are focused on reducing plant cycle times and lead times to help customers remain competitive. At the same time, other continuous improvement and strategic sourcing initiatives are improving our operating efficiency. This contributed to the 110 basis point improvement in our operating margin in the second quarter to 20 percent."

Conference Call to be Broadcast over the Internet

IDEX will broadcast its second quarter earnings conference call over the Internet on Tuesday, July 24, 2007 at 1:30 p.m. CDT. Chairman and Chief Executive Officer Larry Kingsley and Vice President and Chief Financial Officer Dominic Romeo will discuss the company's recent financial performance and respond to questions from the financial analyst community. IDEX invites interested investors to listen to the call and view the accompanying slide presentation, which will be carried live on its website at www.idexcorp.com. Those who wish to participate should log on several minutes before the discussion begins. After clicking on the presentation icon, investors should follow the instructions to ensure their systems are set up to hear the event and view the presentation slides, or download the correct applications at no charge. Investors also will be able to hear a replay of the call by dialing 800.642.1687 or 706.645.9291 and using conference ID #5708063.

A Note on EBITDA and Free Cash Flow

EBITDA means earnings before interest, income taxes, depreciation and amortization, while free cash flow means cash flow from operating activities less capital expenditures plus the excess tax benefit from stock-based compensation. Management uses these non-GAAP financial measures as internal operating metrics and for enterprise valuation purposes. Management believes these measures are useful as analytical indicators of leverage capacity and debt servicing ability, and uses them to measure financial performance as well as for planning purposes. However, they should not be considered as alternatives to net income, cash flow from operating activities or any other items calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definitions of EBITDA and free cash flow used here may differ from those used by other companies.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These statements may relate to, among other things, capital expenditures, cost reductions, cash flow, and operating improvements and are indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "management believes," "the company believes," "the company intends," and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this news release. The risks and uncertainties include, but are not limited to, the following: economic and political consequences resulting from terrorist attacks and wars; levels of industrial activity and economic conditions in the U.S. and other countries around the world; pricing pressures and other competitive factors, and levels of capital spending in certain industries - all of which could have a material impact on order rates and IDEX's results, particularly in light of the low levels of order backlogs it typically maintains; its ability to make acquisitions and to integrate and operate acquired businesses on a profitable basis; the relationship of the U.S. dollar to other currencies and its impact on pricing and cost competitiveness; political and economic conditions in foreign countries in which the company operates; interest rates; capacity utilization and the effect this has on costs; labor markets; market conditions and material costs; and developments with respect to contingencies, such as litigation and environmental matters. The forward-looking statements included here are only made as of the date of this news release, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.

About IDEX

IDEX Corporation is an applied solutions company specializing in fluid and metering technologies, health and science technologies, dispensing equipment, and fire, safety and other diversified products built to its customers' exacting specifications. Its products are sold in niche markets to a wide range of industries throughout the world. IDEX shares are traded on the New York Stock Exchange and Chicago Stock Exchange under the symbol "IEX".

For further information on IDEX Corporation and its business units, visit the company's Web site at www.idexcorp.com.

(Tables follow)

                           IDEX CORPORATION
           Condensed Statements of Consolidated Operations
               (in thousands except per share amounts)


                       Second Quarter Ended       Six Months Ended
                             June 30,                 June 30,
                         2007        2006        2007         2006
----------------------------------------------------------------------

Net sales                $344,482    $296,573    $677,750     $562,961
Cost of sales             196,948     173,652     390,552      329,907
----------------------------------------------------------------------
Gross profit              147,534     122,921     287,198      233,054
Selling, general and
 administrative
 expenses                  78,669      66,937     156,781      129,292
----------------------------------------------------------------------
Operating income           68,865      55,984     130,417      103,762
Other income - net            521         258       1,094          269
Interest expense            6,058       4,061      12,437        7,002
----------------------------------------------------------------------
Income from
 continuing
 operations before
 income taxes              63,328      52,181     119,074       97,029
Provision for income
 taxes                     21,493      17,562      40,408       32,829
----------------------------------------------------------------------
Income from
 continuing
 operations                41,835      34,619      78,666       64,200
Income (loss) from
 discontinued
 operations, net of
 tax                        (205)         337       (369)          834
----------------------------------------------------------------------
Net income                $41,630     $34,956     $78,297      $65,034
======================================================================


Basic Earnings per
 Common Share:
Continuing operations       $0.52       $0.44       $0.98        $0.81
Discontinued
 operations                     -           -      (0.01)         0.01
----------------------------------------------------------------------
Net income                  $0.52       $0.44       $0.97        $0.82
======================================================================

Diluted Earnings per
 Common Share:
Continuing operations       $0.51       $0.43       $0.96        $0.79
Discontinued
 operations                     -           -           -         0.01
----------------------------------------------------------------------
Net income                  $0.51       $0.43       $0.96        $0.80
======================================================================


Share Data:

Basic weighted
 average common
 shares outstanding        80,595      79,521      80,429       79,237

Diluted weighted
 average common
 shares outstanding        82,046      81,043      81,855       80,928
======================================================================


                Condensed Consolidated Balance Sheets
                            (in thousands)
                                               June 30,   December 31,
                                                 2007         2006
----------------------------------------------------------------------

Assets
  Current assets
    Cash and cash
     equivalents                                  $52,025      $77,941
    Receivables - net                             199,320      166,485
    Inventories                                   174,054      160,687
    Assets held for
     sale                                             776          829
    Other current
     assets                                        20,093       11,966
----------------------------------------------------------------------
  Total current
   assets                                         446,268      417,908
  Property, plant and
   equipment - net                                169,513      165,949
  Goodwill and
   intangible assets                            1,128,378    1,083,963
  Other noncurrent
   assets                                           4,953        3,001
----------------------------------------------------------------------
      Total assets                             $1,749,112   $1,670,821
======================================================================

Liabilities and
 shareholders' equity
  Current liabilities
    Trade accounts
     payable                                      $90,991      $75,444
    Accrued expenses                               89,371       95,170
    Short-term
     borrowings                                   158,240        8,210
    Liabilities held
     for sale                                         129          373
    Dividends payable                               9,758        8,055
----------------------------------------------------------------------
  Total current
   liabilities                                    348,489      187,252
  Long-term
   borrowings                                     170,404      353,770
  Other noncurrent
   liabilities                                    163,376      150,527
----------------------------------------------------------------------
    Total liabilities                             682,269      691,549
  Shareholders'
   equity                                       1,066,843      979,272
----------------------------------------------------------------------
      Total
       liabilities
       and
       shareholders'
       equity                                  $1,749,112   $1,670,821
======================================================================



                           IDEX CORPORATION
           Company and Business Group Financial Information
                        (dollars in thousands)


                             Second Quarter Ended   Six Months Ended
                                 June 30, (a)         June 30, (a)
                               2007       2006       2007      2006
    ------------------------------------------------------------------


    Fluid & Metering
     Technologies
      Net sales               $141,094   $107,840  $277,800  $209,760
      Operating income (b)      30,133     21,646    59,884    41,405
      Operating margin            21.4%      20.1%     21.6%     19.7%
      Depreciation and
       amortization             $4,269     $2,507    $8,118    $4,740
      Capital expenditures       3,473      1,103     6,109     2,235

    Health & Science
     Technologies
      Net sales                $82,370    $81,299  $163,090  $144,320
      Operating income (b)      15,167     14,513    29,030    26,793
      Operating margin            18.4%      17.9%     17.8%     18.6%
      Depreciation and
       amortization             $2,277     $2,444    $4,846    $3,843
      Capital expenditures       1,129      1,506     2,780     2,383

    Dispensing Equipment
      Net sales                $49,859    $44,415   $97,752   $85,823
      Operating income (b)      14,248     11,688    25,952    22,018
      Operating margin            28.6%      26.3%     26.5%     25.7%
      Depreciation and
       amortization             $1,030     $1,052    $1,577    $2,065
      Capital expenditures       1,462        531     1,754     1,190

    Fire &
     Safety/Diversified
     Products
      Net sales                $72,808    $64,552  $142,004  $125,768
      Operating income (b)      18,117     16,267    33,475    29,922
      Operating margin            24.9%      25.2%     23.6%     23.8%
      Depreciation and
       amortization             $1,529     $1,540    $3,054    $3,078
      Capital expenditures         813      1,628     1,699     2,766

    Company
      Net sales               $344,482   $296,573  $677,750  $562,961
      Operating income          68,865     55,984   130,417   103,762
      Operating margin            20.0%      18.9%     19.2%     18.4%
      Depreciation and
       amortization (c)         $9,340     $7,802   $18,479   $14,095
      Capital expenditures       7,347      5,688    13,130     9,703


    ------------------------------------------------------------------

(a) Second quarter data includes acquisition of Quadro (June 2007) in
     the Fluid & Metering Technologies Group and EPI (May 2006) in the
     Health & Science Technologies Group, while six month data
     includes acquisition of Quadro in the Fluid & Metering
     Technologies Group, JUN-AIR (February 2006) and EPI in the Health
     & Science Technologies Group and Airshore (January 2006) in the
     Fire & Safety/Diversified Products Group from the dates of
     acquisition.

(b) Group operating income excludes unallocated corporate operating
     expenses.

(c) Excludes amortization of debt issuance expenses and unearned
     compensation.

CONTACT:
IDEX Corporation
Investor Contact:
Heath Mitts
Vice President - Corporate Finance
(847) 498-7070
or
Media Contact:
Susan Fisher
Director - Corporate Communications
(847) 498-7070

SOURCE: IDEX Corporation