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IDEX Corporation Reports Second Quarter 2008 Results; 19% Orders Growth, 15% Sales Growth and 10% Increase in Diluted EPS

NORTHBROOK, Ill.--(BUSINESS WIRE)--July 21, 2008--IDEX Corporation (NYSE:IEX) today announced second quarter 2008 results.

New orders in the quarter totaled $402 million, 19 percent higher than the prior-year period. Sales in the quarter totaled $397 million, 15 percent higher than the prior-year period. International sales represented approximately 47 percent of total sales for the second quarter of 2008 compared to 46 percent in 2007.

Second quarter operating income of $74 million was 7 percent higher than the prior-year period. Operating margin of 18.6 percent reflected a 140 basis point decline versus the prior-year period, primarily due to the impact of intangible amortization expenses associated with recent acquisitions. Compared to the first quarter of 2008, operating margin increased by 30 basis points.

Income from continuing operations of $46 million increased 10 percent over the second quarter of the previous year. Diluted earnings per share from continuing operations of 56 cents improved 5 cents, or 10 percent, from the second quarter of the previous year.

    Second Quarter 2008 Highlights (from Continuing Operations)

    --  Orders increased 19 percent compared to the prior-year period
        (8 percent acquisitions, 7 percent organic and 4 percent
        foreign currency translation)

    --  Sales increased 15 percent compared to the prior-year period
        (7 percent acquisitions, 5 percent organic and 3 percent
        foreign currency translation)

    --  Income increased 10 percent to $46 million

    --  Diluted EPS at 56 cents was 5 cents, or 10 percent, ahead of
        the prior-year period

    --  EBITDA of $87 million was 22 percent of sales and covered
        interest expense by more than 21 times

    --  Second quarter free cash flow of $61 million represented 132
        percent of net income

"Overall, our markets are solid and our business performance for the second quarter of 2008 was strong. Growth in the Fluid and Metering Technologies segment was driven by global demand in the infrastructure-related end markets. In the Health and Science Technologies segment, the growth was driven by core analytical instrumentation, IVD and biotechnology markets. Strength in our engineered band clamping and rescue tools businesses was offset by softness in the fire suppression market within the Fire & Safety/Diversified Products segment. Within Dispensing, we experienced modest growth in both the European and North American markets.

Given our outlook and current market conditions, we expect full year 2008 total revenue growth in the range of 13 to 15 percent and EPS to range from $2.12 to $2.18 compared to $1.90 in the prior year. In addition, 2008 free cash flow is projected to exceed net income by 10 to 20 percent. For the third quarter of 2008, we project total revenue growth in the range of 14 to 16 percent and EPS in the range of 53 to 56 cents per diluted share.

Overall, we are pleased with our second quarter 2008 results and we anticipate continued strong performance in the second half of 2008."

    Lawrence D. Kingsley

    Chairman and Chief Executive Officer

    Business Highlights

    Fluid & Metering Technologies

    --  Sales in the second quarter of $177.4 million reflected 26
        percent growth (16 percent acquisitions, 8 percent organic and
        2 percent foreign currency translation). Growth was driven by
        continued global demand for infrastructure-related
        applications and acquisition performance.

    --  Operating margin of 19.5 percent represented a 190 basis point
        decline compared with the second quarter of 2007, primarily
        due to the impact of recent acquisitions.

    Health & Science Technologies

    --  Sales in the second quarter of $87.2 million reflected 6
        percent growth (3 percent acquisitions, 1 percent organic and
        2 percent foreign currency translation). Strong growth in core
        analytical instrumentation, IVD and biotechnology markets was
        partially offset by the previously announced exit from two
        specific OEM contracts.

    --  Operating margin of 18.4 percent was flat compared with the
        second quarter of 2007.

    Dispensing Equipment

    --  Sales of $56.6 million in the second quarter reflected 14
        percent growth compared with the second quarter of 2007 (3
        percent organic and 11 percent foreign currency translation).
        The modest growth was balanced evenly between both the
        European and North American markets.

    --  Operating margin of 25.3 percent represented a 330 basis point
        decline compared with the second quarter of 2007, primarily
        due to foreign currency translation and selective material
        cost increases.

    Fire & Safety/Diversified Products

    --  Sales in the second quarter of $77.2 million reflected 6
        percent growth compared with the prior year (2 percent organic
        and 4 percent foreign currency translation). The engineered
        band clamping business as well as the rescue tools business
        achieved strong growth, offset by weak demand in the North
        American fire suppression market.

    --  Operating margin of 24.1 percent represented an 80 basis point
        decline compared with the second quarter of 2007.

For the second quarter of 2008, Fluid & Metering Technologies contributed 45 percent of sales and 42 percent operating income; Health & Science Technologies accounted for 22 percent of sales and 19 percent of operating income; Dispensing Equipment accounted for 14 percent of sales and 17 percent of operating income; and Fire & Safety/Diversified Products represented 19 percent of sales and 22 percent of operating income.

Restructuring

In July, the company initiated the ceasing of manufacturing operations in the Dispensing segment's Milan, Italy facility. The European operational footprint consolidation is consistent with the Dispensing segment's capacity utilization strategy and is expected to generate $3 to $4 million of annual savings beginning in 2009. The projected restructuring cost is estimated at $5 to $6 million and is expected to be offset by a gain on the divestiture of the facility. Due to uncertain timing of the facility divestiture and formalization of specific severance plans, the net earnings impact is not included in the third quarter or full year earnings per share guidance and will be further discussed in subsequent earnings releases.

Conference Call to be Broadcast over the Internet

IDEX will broadcast its second quarter earnings conference call over the Internet on Tuesday, July 22, 2008 at 9:30 a.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 888.203.1112 or 719.457.0820 and using conference ID #4450651.

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.

EBITDA and Free Cash Flow bridge

                                 For the Quarter Ended
                       June 30,                   March 31,
                 ---------------------            ---------
                    2008       2007     Change      2008     Change
                 ---------- ---------- ---------  --------- ---------

Income before
 Taxes               $70.7      $63.3        12 %   $62.6         13 %
Depreciation and
 Amortization         12.2        9.3        30      12.0          1
Interest               4.1        6.1       (33)      5.7        (28)
                 ---------- ----------            ---------
EBITDA               $87.0      $78.7        11     $80.3          8
                 ========== ==========            =========

Cash Flow from
 Operating
 Activities          $65.5      $63.9         3 %   $28.3        132 %
Capital
 Expenditures         (6.9)      (7.4)       (7)     (6.3)        10
Excess Tax
 Benefit from
 Stock-Based
 Compensation          2.2        1.9        20       0.1          -
                 ---------- ----------            ---------
Free Cash Flow       $60.8      $58.4         4     $22.1        175
                 ========== ==========            =========

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,
                       2008         2007         2008         2007

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

Net sales              $397,310    $344,482      $768,972    $677,750
Cost of sales           234,102     196,948       450,597     390,552
----------------------------------------------------------------------
Gross profit            163,208     147,534       318,375     287,198
Selling, general
 and
 administrative
 expenses                89,400      78,669       176,468     156,781
----------------------------------------------------------------------
Operating income         73,808      68,865       141,907     130,417
Other income - net          987         521         1,162       1,094
Interest expense          4,092       6,058         9,758      12,437
----------------------------------------------------------------------
Income from
 continuing
 operations before
 income taxes            70,703      63,328       133,311     119,074
Provision for
 income taxes            24,649      21,493        45,878      40,408
----------------------------------------------------------------------
Income from
 continuing
 operations              46,054      41,835        87,433      78,666
Loss from
 discontinued
 operations, net
 of tax                       -        (205)            -        (369)
----------------------------------------------------------------------
Net income              $46,054     $41,630       $87,433     $78,297
======================================================================


Basic Earnings per
 Common Share:
Continuing
 operations               $0.57       $0.52         $1.08       $0.98
Discontinued
 operations                   -           -             -       (0.01)
----------------------------------------------------------------------
Net income                $0.57       $0.52         $1.08       $0.97
======================================================================

Diluted Earnings
 per Common Share:
Continuing
 operations               $0.56       $0.51         $1.06       $0.96
Discontinued
 operations                   -           -             -           -
----------------------------------------------------------------------
Net income                $0.56       $0.51         $1.06       $0.96
======================================================================


Share Data:

Basic weighted
 average common
 shares
 outstanding             81,322      80,595        81,194      80,429

Diluted weighted
 average common
 shares
 outstanding             82,746      82,046        82,511      81,855
======================================================================


                Condensed Consolidated Balance Sheets
                            (in thousands)
                                               June 30,   December 31,
                                                 2008         2007
----------------------------------------------------------------------

Assets
  Current assets
    Cash and cash
     equivalents                                 $118,538    $102,757
    Restricted
     cash                                               -     140,005
    Receivables -
     net                                          240,028     193,326
    Inventories                                   198,764     177,435
    Other current
     assets                                        26,640      23,615
----------------------------------------------------------------------
  Total current
   assets                                         583,970     637,138
  Property, plant
   and equipment -
   net                                            178,318     172,999
  Goodwill and
   intangible
   assets                                       1,331,055   1,168,785
  Other noncurrent
   assets                                          12,075      10,672
----------------------------------------------------------------------
    Total assets                               $2,105,418  $1,989,594
======================================================================

Liabilities and
 shareholders'
 equity
  Current
   liabilities
    Trade accounts
     payable                                     $101,817     $84,209
    Accrued
     expenses                                     106,425      99,125
    Short-term
     borrowings                                     7,599       5,830
    Dividends
     payable                                        9,771       9,789
----------------------------------------------------------------------
  Total current
   liabilities                                    225,612     198,953
  Long-term
   borrowings                                     403,060     448,901
  Other noncurrent
   liabilities                                    202,609     179,017
----------------------------------------------------------------------
    Total
     liabilities                                  831,281     826,871
  Shareholders'
   equity                                       1,274,137   1,162,723
----------------------------------------------------------------------
    Total
     liabilities
     and
     shareholders'
     equity                                    $2,105,418  $1,989,594
======================================================================
                           IDEX CORPORATION
           Company and Business Group Financial Information
                        (dollars in thousands)


                     Second Quarter Ended        Six Months Ended
                         June 30, (a)              June 30, (a)
                      2008         2007         2008         2007
----------------------------------------------------------------------


Fluid & Metering
 Technologies
  Net sales           $177,358     $141,094     $348,288     $277,800
  Operating income
   (b)                  34,655       30,133       68,900       59,884
  Operating margin        19.5%        21.4%        19.8%        21.6%
  Depreciation and
   amortization         $6,450       $4,269      $12,763       $8,118
  Capital
   expenditures          2,785        3,473        5,176        6,109

Health & Science
 Technologies
  Net sales            $87,247      $82,370     $170,889     $163,090
  Operating income
   (b)                  16,054       15,167       31,133       29,030
  Operating margin        18.4%        18.4%        18.2%        17.8%
  Depreciation and
   amortization         $2,885       $2,277       $5,838       $4,846
  Capital
   expenditures            954        1,129        2,600        2,780

Dispensing
 Equipment
  Net sales            $56,601      $49,859     $106,609      $97,752
  Operating income
   (b)                  14,294       14,248       25,527       25,952
  Operating margin        25.3%        28.6%        23.9%        26.5%
  Depreciation and
   amortization         $1,131       $1,030       $2,269       $1,577
  Capital
   expenditures          1,054        1,462        1,584        1,754

Fire & Safety /
 Diversified
 Products
  Net sales            $77,247      $72,808     $145,910     $142,004
  Operating income
   (b)                  18,608       18,117       36,338       33,475
  Operating margin        24.1%        24.9%        24.9%        23.6%
  Depreciation and
   amortization         $1,390       $1,529       $2,744       $3,054
  Capital
   expenditures          2,033          813        3,140        1,699

Company
  Net sales           $397,310     $344,482     $768,972     $677,750
  Operating income      73,808       68,865      141,907      130,417
  Operating margin        18.6%        20.0%        18.5%        19.2%
  Depreciation and
   amortization
   (c)                 $12,164       $9,340      $24,213      $18,479
  Capital
   expenditures          7,336        7,347       13,313       13,130

----------------------------------------------------------------------
(a) Second quarter and six month data includes acquisition of ADS
     (January 2008) and Quadro (June 2007) in the Fluid & Metering
     Technologies Group and Isolation Technologies (October 2007) in
     the Health & Science Technologies Group from the date 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