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IDEX Corporation Reports Third Quarter Results; 16% Sales Growth, 15% Increase in Diluted EPS and Strong Free Cash Flow

NORTHBROOK, Ill.--(BUSINESS WIRE)--Oct. 18, 2007--IDEX Corporation (NYSE: IEX) today announced its financial results for the quarter ended September 30, 2007. From continuing operations, orders in the third quarter were up 15 percent, sales increased 16 percent, and income rose 16 percent to $38.8 million compared to the third quarter of 2006. Diluted earnings per share from continuing operations were 47 cents versus 41 cents in the year-ago quarter.


    Third Quarter 2007 Highlights (from Continuing Operations)

    --  Orders in the third quarter of 2007 were $327.5 million, 15
        percent higher than a year ago; excluding foreign currency
        translation and acquisitions, organic orders growth was 3
        percent.

    --  Third quarter sales of $334.9 million rose 16 percent;
        excluding foreign currency translation and acquisitions,
        organic sales growth was 5 percent.

    --  Operating margin at 18.9 percent was 10 basis points higher
        than a year ago.

    --  Income increased 16 percent to $38.8 million.

    --  Diluted EPS at 47 cents was 6 cents or 15 percent ahead of
        last year.

    --  EBITDA of $73.3 million was 22 percent of sales and covered
        interest expense by 13 times.

    --  Third quarter free cash flow was $52.2 million.

"In the third quarter, we continued to experience strong global demand
 in our process controls, infrastructure and core health and science
 end markets. However, our third quarter results were unfavorably
 impacted by lower demand in the Dispensing Equipment and Fire &
 Safety/Diversified Products segments. In the Dispensing Equipment
 segment, we experienced softer than expected demand in the North
 American small retail channel as well as lower operating margins
 primarily due to reduced volume, in-quarter operational issues and
 unfavorable mix. In the Fire & Safety/Diversified Products segment,
 the results were impacted by lower OEM demand for fire suppression
 equipment.

"For the fourth quarter of 2007, projected organic growth rates in the
 Fluid & Metering Technologies and Health & Science Technologies
 segments are 6-8 percent and 3-5 percent, respectively. In the
 Dispensing Equipment segment, the projected fourth quarter organic
 growth rate of 4-6 percent reflects improvement from the third
 quarter due to planned replenishment orders in the North American
 large retail channel. The projected fourth quarter organic growth
 rate in the Fire & Safety/Diversified Products segment of 4-5 percent
 is consistent with third quarter performance, as we anticipate
 continued softness in the North American fire suppression market.

"Given these trends, current market conditions and the impact from
 currency and recent acquisitions, we expect fourth quarter sales
 growth of 12 to 15 percent and EPS of 46 to 49 cents per diluted
 share. The EPS estimate range as stated includes a projected
 unfavorable impact of one to two cents from estimated severance and
 field service expenses in the fourth quarter."

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


                                        For the Quarter Ended
                               September 30,         June 30,
                               -------------         --------
                                2007   2006  Change    2007   Change
                               ------ ------ ------  -------- ------
Orders Written                 $327.5 $285.6     15%   $339.3    (3)%
Sales                           334.9  289.8     16     344.5    (3)
Operating Income                 63.1   54.4     16      68.9    (8)
Operating Margin                 18.9%  18.8%    10bp    20.0% (110)bp
Income from Continuing
 Operations                     $38.8  $33.3     16%    $41.8    (7)%
Net Income                       38.4   46.0   (16)      41.6    (8)
Diluted EPS:
  Income from Continuing
   Operations                     .47    .41     15       .51    (8)
  Net Income                      .47    .57   (18)       .51    (8)

Other Data (from Continuing
 Operations)
    - Income before Taxes       $58.0  $51.5     13%    $63.3    (8)%
    - Depreciation and
     Amortization                 9.8    6.6     49       9.3      5
    - Interest                    5.5    3.4     64       6.1    (9)
    - EBITDA                     73.3   61.5     19      78.7    (7)
    - Cash Flow from Operating
     Activities                  58.6   40.8     44      63.8    (8)
    - Capital Expenditures        7.4    6.3     17       7.4      -
    - Excess Tax Benefit from
     Stock-Based Compensation     1.0     .3    302       1.9   (45)
    - Free Cash Flow             52.2   34.8     50      58.3   (10)

Q3 Orders, Sales, Income and EPS from Continuing Operations Increase Year-over-Year

New orders in the quarter totaled $327.5 million, 15 percent higher than the same period in 2006. Excluding the impact of acquisitions and foreign currency translation, orders were up 3 percent. The organic order growth rate in the third quarter was unfavorably impacted by timing of anticipated OEM orders.

Sales in the third quarter of $334.9 million increased 16 percent from the prior-year period. Excluding the impact of acquisitions and foreign currency translation, organic growth was 5 percent. Sales to international customers represented approximately 46 percent of total sales for the third quarter of 2007 versus 45 percent in the same period of 2006.

Third quarter operating margin was 18.9 percent, 10 basis points higher than the 18.8 percent reported in the prior-year period. Gross margin of 41.1 percent was 10 basis points higher than the third quarter of 2006. Selling, general and administrative expenses as a percent of sales were 22.2 percent, flat compared to the prior year. Margin improvement from volume leverage, strategic sourcing and operational excellence initiatives were offset by lower operating performance in the Dispensing Equipment segment.

Income from continuing operations of $38.8 million increased 16 percent over the third quarter of 2006. Diluted earnings per share from continuing operations of 47 cents improved 6 cents, or 15 percent, from the third quarter of 2006.


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


                                        Nine Months Ended September 30
                                           2007      2006     Change
                                        ---------- --------- ---------
Orders Written                           $1,026.8    $869.6       18%
Sales                                     1,012.6     852.8       19
Operating Income                            193.6     158.2       22
Operating Margin                             19.1%     18.5%      60bp
Income from Continuing Operations          $117.5     $97.5       20%
Net Income                                  116.7     111.0        5
Diluted EPS:
  Income from Continuing Operations          1.43      1.21       18
  Net Income                                 1.42      1.37        4

Other Data
    - Income before Taxes                  $177.1    $148.6       19%
    - Depreciation and Amortization          28.3      20.7       37
    - Interest                               18.0      10.4       73
    - EBITDA                                223.4     179.7       24
    - Cash Flow from Operating
     Activities                             138.2     109.6       26
    - Capital Expenditures                   20.2      16.0       26
    - Excess Tax Benefit from Stock-
     Based Compensation                       4.7       4.9       (4)
    - Free Cash Flow                        122.7      98.5       25

Nine Month Orders, Sales, Income and EPS from Continuing Operations Ahead of Last Year

New orders for the first nine months of 2007 totaled $1,026.8 million, 18 percent higher than the first nine months of last year. Excluding the impact of acquisitions and foreign currency translation, orders in the first nine months of 2007 were 6 percent higher than in 2006.

Sales for the first nine months of 2007 increased 19 percent to $1,012.6 million from $852.8 million a year earlier. Excluding the impact of acquisitions and foreign currency translation, organic growth was 6 percent. Sales to international customers represented approximately 45 percent of total sales for the first nine months of both 2007 and 2006.

First nine months operating margin was 19.1 percent, 60 basis points higher than the 18.5 percent reported in the prior-year period. Gross margin improved 70 basis points to 42.0 percent, while selling, general and administrative expenses as a percent of sales of 22.9 percent increased 10 basis points from the first nine months of 2006, reflecting acquisitions and reinvestment in the business to drive organic growth.

Year-to-date income from continuing operations of $117.5 million increased 20 percent compared to 2006. Diluted earnings per share from continuing operations of $1.43 rose 22 cents, or 18 percent, from the $1.21 recorded for the first nine months of 2006.

Segment Results

Fluid & Metering Technologies sales in the third quarter of $143.8 million reflected 35 percent growth (25 percent acquisitions, 9 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 21.9 percent represented a 30 basis point improvement compared with the third quarter of 2006.

Health & Science Technologies sales in the third quarter of $83.3 million reflected 3 percent growth (2 percent organic and 1 percent foreign currency translation). Growth in core analytical instrumentation, IVD and biotechnology markets was offset by slow growth in specific pneumatic OEM markets. In addition, the exiting of two specific, maturing OEM contracts continues to negatively impact growth. Operating margin of 20.1 percent represented a 230 basis point improvement compared with the third quarter of 2006, primarily driven by favorable mix.

Dispensing Equipment sales of $38.1 million in the third quarter was relatively flat compared with the third quarter of 2006 (-5 percent organic offset by 5 percent foreign currency translation). Slower North American demand driven by softness in the small retail channel coupled with timing of large retail replenishment programs contributed to lower than expected performance. Operating margin of 14.7 percent represented a 750 basis point decline compared with the third quarter of 2006, as a result of reduced volume, operational issues, product quality-driven field service costs, unfavorable product mix and severance expenses.

Fire & Safety/Diversified Products sales in the third quarter of $70.6 million reflected 8 percent growth (5 percent organic and 3 percent foreign currency translation). The engineered band clamping business achieved strong growth, offset by weak demand in the North American fire suppression market. Operating margin of 23.4 percent represented a 90 basis point decline compared with the third quarter of 2006, due to volume decline in fire suppression and unfavorable product mix.

For the third quarter of 2007, Fluid & Metering Technologies contributed 43 percent of sales and 45 percent operating income; Health & Science Technologies accounted for 25 percent of sales and 24 percent of operating income; Dispensing Equipment accounted for 11 percent of sales and 8 percent of operating income; and Fire & Safety/Diversified Products represented 21 percent of sales and 23 percent of operating income.

Strong Financial Position

IDEX ended the quarter with total assets of $1.8 billion and working capital of $125.8 million. Total borrowings were $304.0 million at September 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 nine months of 2007 was $122.7 million. Year-to-date, 2007 EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $223.4 million (22 percent of sales) and covered interest expense by more than 12 times. Debt-to-total capitalization at September 30, 2007, was 21 percent.

Conference Call to be Broadcast over the Internet

IDEX will broadcast its third quarter earnings conference call over the Internet on Thursday, October 18, 2007 at 1:30 p.m. CT. 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 #5708545.

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)


                            Third Quarter Ended   Nine Months Ended
                               September 30,        September 30,
                              2007      2006       2007        2006
----------------------------------------------------------------------

Net sales                   $334,884  $289,848  $1,012,634    $852,809
Cost of sales                197,219   171,083     587,771     500,990
----------------------------------------------------------------------
Gross profit                 137,665   118,765     424,863     351,819
Selling, general and
 administrative expenses      74,517    64,352     231,298     193,644
----------------------------------------------------------------------
Operating income              63,148    54,413     193,565     158,175
Other income - net               437       501       1,531         770
Interest expense               5,537     3,366      17,974      10,368
----------------------------------------------------------------------
Income from continuing
 operations before income
 taxes                        58,048    51,548     177,122     148,577
Provision for income taxes    19,231    18,215      59,639      51,044
----------------------------------------------------------------------
Income from continuing
 operations                   38,817    33,333     117,483      97,533
Income (loss) from
 discontinued operations,
 net of tax                     (350)     (306)       (719)        528
Net gain (loss) on sale of
 discontinued operations,
 net of tax                      (55)   12,969         (55)     12,969
----------------------------------------------------------------------
Income (loss) from
 discontinued operations,
 net of tax                     (405)   12,663        (774)     13,497
----------------------------------------------------------------------
Net income                   $38,412   $45,996    $116,709    $111,030
======================================================================


Basic Earnings per Common
 Share:
Continuing operations          $0.48     $0.42       $1.46       $1.23
Discontinued operations            -      0.16       (0.01)       0.17
----------------------------------------------------------------------
Net income                     $0.48     $0.58       $1.45       $1.40
======================================================================

Diluted Earnings per Common
 Share:
Continuing operations          $0.47     $0.41       $1.43       $1.21
Discontinued operations            -      0.16       (0.01)       0.16
----------------------------------------------------------------------
Net income                     $0.47     $0.57       $1.42       $1.37
======================================================================


Share Data:

Basic weighted average
 common shares outstanding    80,832    79,689      80,563      79,389

Diluted weighted average
 common shares outstanding    82,311    80,957      82,005      80,897
======================================================================



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

Assets
  Current assets
    Cash and cash
     equivalents                                 $74,992       $77,941
    Receivables - net                            193,457       166,485
    Inventories                                  178,622       160,687
    Assets held for sale                               -           829
    Other current assets                          19,209        11,966
----------------------------------------------------------------------
  Total current assets                           466,280       417,908
  Property, plant and
   equipment - net                               170,788       165,949
  Goodwill and intangible
   assets                                      1,135,479     1,083,963
  Other noncurrent assets                          4,733         3,001
----------------------------------------------------------------------
      Total assets                            $1,777,280    $1,670,821
======================================================================

Liabilities and
 shareholders' equity
  Current liabilities
    Trade accounts payable                       $86,769       $75,444
    Accrued expenses                              89,377        95,170
    Short-term borrowings                        154,578         8,210
    Liabilities held for
     sale                                              -           373
    Dividends payable                              9,775         8,055
----------------------------------------------------------------------
  Total current liabilities                      340,499       187,252
  Long-term borrowings                           149,448       353,770
  Other noncurrent
   liabilities                                   169,063       150,527
----------------------------------------------------------------------
    Total liabilities                            659,010       691,549
  Shareholders' equity                         1,118,270       979,272
----------------------------------------------------------------------
      Total liabilities and
       shareholders' equity                   $1,777,280    $1,670,821
======================================================================
                           IDEX CORPORATION
           Company and Business Group Financial Information
                        (dollars in thousands)


                            Third Quarter Ended   Nine Months Ended
                             September 30, (a)    September 30, (a)
                               2007      2006       2007       2006
----------------------------------------------------------------------


Fluid & Metering
 Technologies
  Net sales                  $143,842  $106,251    $421,642  $316,011
  Operating income (b)         31,559    22,957      91,443    64,362
  Operating margin               21.9%     21.6%       21.7%     20.4%
  Depreciation and
   amortization                $4,310    $2,142     $12,428    $6,882
  Capital expenditures          2,883     1,280       8,992     3,515

Health & Science
 Technologies
  Net sales                   $83,266   $81,252    $246,356  $225,572
  Operating income (b)         16,703    14,488      45,733    41,281
  Operating margin               20.1%     17.8%       18.6%     18.3%
  Depreciation and
   amortization                $3,316    $2,460      $8,162    $6,303
  Capital expenditures          1,207     1,025       3,987     3,408

Dispensing Equipment
  Net sales                   $38,145   $37,955    $135,897  $123,778
  Operating income (b)          5,625     8,425      31,577    30,443
  Operating margin               14.7%     22.2%       23.2%     24.6%
  Depreciation and
   amortization                  $854      $544      $2,431    $2,609
  Capital expenditures            694       794       2,448     1,984

Fire & Safety/Diversified
 Products
  Net sales                   $70,592   $65,233    $212,596  $191,001
  Operating income (b)         16,533    15,844      50,008    45,766
  Operating margin               23.4%     24.3%       23.5%     24.0%
  Depreciation and
   amortization                $1,235    $1,425      $4,289    $4,503
  Capital expenditures            829     2,332       2,528     5,098

Company
  Net sales                  $334,884  $289,848  $1,012,634  $852,809
  Operating income             63,148    54,413     193,565   158,175
  Operating margin               18.9%     18.8%       19.1%     18.5%
  Depreciation and
   amortization (c)            $9,826    $6,592     $28,305   $20,687
  Capital expenditures          7,794     6,282      20,924    15,985


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

(a) Nine month data includes acquisition of Faure Herman (February
 2007) and Quadro (June 2007) in the Fluid & Metering Technologies
 Group, JUN-AIR (February 2006) and EPI (May 2006) 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

SOURCE:
IDEX Corporation