Driven by Innovation

Disciplined by our Operating Model

Delivering Performance

Current stock performance

$107.72 - 0.14
26 May 2017

 

Print Page Print Page | E-mail Page E-mail Page | RSS Feeds RSS Feeds | E-mail Alerts E-mail Alerts | Financial Tear Sheet Financial Tear Sheet
News Release
Printer Friendly Version View printer-friendly version
Download PDF version Download PDF version
<< Back
IDEX Corporation Reports Third Quarter 2010 Results; Adjusted Earnings Per Share of 50 Cents

LAKE FOREST, Ill., Oct 18, 2010 (BUSINESS WIRE) --

IDEX Corporation (NYSE: IEX) today announced third quarter 2010 results.

New orders in the quarter totaled $382 million, up 13 percent compared to the prior-year period. Sales in the quarter totaled $374 million, 16 percent higher than the prior-year period.

Third quarter 2010 operating income, adjusted for $4 million of restructuring related charges, was $66 million and resulted in adjusted operating margin of 17.6 percent, up 240 basis points from the prior year (excluding prior year restructuring related charges) due to volume and improved productivity.

Excluding the impact from restructuring related charges, third quarter adjusted diluted earnings per share was 50 cents, an increase of 11 cents, or 28 percent, from the third quarter of the previous year (excluding prior year restructuring related charges).

Third Quarter 2010 Highlights

  • Orders increased 13 percent compared to the prior year (+11 percent organic, +4 percent acquisition and -2 percent for foreign currency translation).
  • Sales increased 16 percent compared to the prior year (+14 percent organic, +4 percent acquisition and -2 percent for foreign currency translation).
  • Reported net income of $39 million was $9 million, or 30 percent, higher than the prior year. Excluding restructuring related charges, adjusted net income of $41 million was $9 million, or 29 percent, higher than the prior year (excluding prior year restructuring charges).
  • Diluted EPS of $0.47 was 10 cents, or 28 percent, higher than the prior year. Excluding restructuring related charges, adjusted diluted EPS of $0.50 was 11 cents, or 28 percent higher than the prior year (excluding prior year restructuring charges).
  • EBITDA of $77 million was 21 percent of sales and covered interest expense by more than 18 times.
  • Free cash flow of $54 million represents 140% of net income.

"Our third quarter results were better than expected, driven by broad based demand. International markets continue to fuel strong organic performance and we are experiencing solid domestic sales as well. We are investing in people and new product to drive growth in 2011 and beyond.

Third quarter operating margin was up 240 basis points as a result of operating leverage on fixed cost improvement achieved over the past two years and ongoing operational excellence initiatives. We also continue to deliver very strong customer service performance.

We anticipate that the fourth quarter 2010 EPS will now be between 49 and 51 cents on a fully diluted basis, excluding restructuring charges. For the full year; we now anticipate organic revenue growth to be approximately 10 percent and diluted EPS to be $1.95 to $1.97, excluding restructuring charges."

Lawrence D. Kingsley
Chairman and Chief Executive Officer

Third Quarter 2010 Business Highlights (excluding restructuring related charges)

Fluid & Metering Technologies

  • Sales in the third quarter of $177 million reflected a 13 percent increase compared to the third quarter of 2009 (+14 percent organic, +1 percent acquisition, and -2 percent for foreign currency translation).
  • Operating margin of 18.5 percent represented a 170 basis point improvement compared with the third quarter of 2009 primarily due to higher volume and cost reduction initiatives.

Health & Science Technologies

  • Sales in the third quarter of $104 million reflected a 37 percent increase compared to the third quarter of 2009 (+24 percent organic, +14 percent acquisition, and -1 percent for foreign currency translation).
  • Operating margin of 23.0 percent represented a 290 basis point improvement compared with the third quarter of 2009 primarily due to higher volume and cost reduction initiatives.

Dispensing Equipment

  • Sales in the third quarter of $26 million reflected a 4 percent increase compared to the third quarter of 2009 (+9 percent organic and -5 percent for foreign currency translation).
  • Operating margin of 10.2 percent was significantly higher than the third quarter of 2009 primarily due to volume, cost reduction initiatives and productivity improvements.

Fire & Safety/Diversified Products

  • Sales in the third quarter of $67 million reflected a 2 percent increase compared to the third quarter of 2009 (+6 percent organic and -4 percent for foreign currency translation).
  • Operating margin of 25.4 percent represented a 100 basis point improvement compared with the third quarter of 2009 primarily due to volume and favorable mix.

For the third quarter of 2010, Fluid & Metering Technologies contributed 47 percent of sales and 43 percent of operating income; Health & Science Technologies accounted for 28 percent of sales and 30 percent of operating income; Dispensing Equipment accounted for 7 percent of sales and 4 percent of operating income; and Fire & Safety/Diversified Products represented 18 percent of sales and 23 percent of operating income.

Conference Call to be Broadcast over the Internet

IDEX will broadcast its third quarter earnings conference call over the Internet on Tuesday, October 19, 2010 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 will also be able to hear a replay of the call by dialing 800.642.1687 (or 706.645.9291 for international participants) using the ID # 97280162.

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

Sep 30,

Jun 30,

2010

2009

Change

2010

Change

Income before Taxes

$57.2 $43.9 30 % $59.4 (4) %

Depreciation and Amortization

15.2 14.1 8 15.4 (1)

Interest

4.2 4.0 5 3.6 16

EBITDA

$76.6 $62.0 23 $78.4 (2)

Cash Flow from Operating Activities

$61.6

$84.8

(27)

%

$68.6

(10)

%

Capital Expenditures

(8.5) (7.4) 15 (10.0) (15)

Excess Tax Benefit from Stock-Based Compensation

1.0

0.3

n/m

1.7

(43)

Free Cash Flow

$54.1 $77.7 (30) $60.3 (10)

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
IDEX CORPORATION
Condensed Statements of Consolidated Operations
(in thousands except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2010 2009 2010 2009
Net sales $ 373,731 $ 323,249 $ 1,107,855 $ 986,317
Cost of sales 219,598 194,191 651,360 602,964
Gross profit 154,133 129,058 456,495 383,353
Selling, general and administrative expenses 88,170 79,789 266,961 242,687
Restructuring expenses 3,524 2,752 6,422 8,253
Operating income 62,439 46,517 183,112 132,413
Other income (expense) - net (1,101 ) 1,382 (608 ) 806
Interest expense 4,162 3,951 11,195 13,212
Income before income taxes 57,176 43,948 171,309 120,007
Provision for income taxes 18,612 14,171 55,722 39,703
Net income $ 38,564 $ 29,777 $ 115,587 $ 80,304
Earnings per Common Share:
Basic earnings per common share (a) $ 0.47 $ 0.37 $ 1.42 $ 1.00
Diluted earnings per common share (a) $ 0.47 $ 0.37 $ 1.40 $ 0.99
Share Data:
Basic weighted average common shares outstanding 80,517 79,740 80,322 79,642
Diluted weighted average common shares outstanding 81,938 80,879 81,749 80,535
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30,

December 31,

2010 2009
Assets
Current assets
Cash and cash equivalents $ 206,054 $ 73,526
Receivables - net 210,188 183,178
Inventories 191,698 159,463
Other current assets 53,019 35,545
Total current assets 660,959 451,712
Property, plant and equipment - net 187,021 178,283
Goodwill and intangible assets 1,490,734 1,461,799
Other noncurrent assets 7,747 6,363
Total assets $ 2,346,461 $ 2,098,157
Liabilities and shareholders' equity
Current liabilities
Trade accounts payable $ 94,299 $ 73,020
Accrued expenses 163,119 98,730
Short-term borrowings 11,070 8,346
Dividends payable 12,366 9,586
Total current liabilities 280,854 189,682
Long-term borrowings 480,559 391,754
Other noncurrent liabilities 249,290 248,617
Total liabilities 1,010,703 830,053
Shareholders' equity 1,335,758 1,268,104
Total liabilities and shareholders' equity $ 2,346,461 $ 2,098,157
IDEX CORPORATION
IDEX CORPORATION
Company and Business Group Financial Information
(dollars in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,

2010 (b)

2009

2010 (b)

2009
Fluid & Metering Technologies
Net sales $ 176,881 $ 156,939 $ 524,306 $ 470,957
Operating income (c) 32,734 26,412 96,023 73,773
Operating margin 18.5 % 16.8 % 18.3 % 15.7 %
Depreciation and amortization $ 8,335 $ 8,061 $ 24,560 $ 24,396
Capital expenditures 3,359 3,810 13,030 9,682
Health & Science Technologies
Net sales $ 104,319 $ 76,138 $ 292,327 $ 224,142
Operating income (c) 24,032 15,312 63,920 37,422
Operating margin 23.0 % 20.1 % 21.9 % 16.7 %
Depreciation and amortization $ 4,640 $ 3,866 $ 12,519 $ 10,579
Capital expenditures 2,295 1,879 6,059 3,793
Dispensing Equipment
Net sales $ 26,480 $ 25,580 $ 101,169 $ 104,111
Operating income (c) 2,712 319 19,182 14,319
Operating margin 10.2 % 1.2 % 19.0 % 13.8 %
Depreciation and amortization $ 816 $ 670 $ 2,980 $ 2,340
Capital expenditures 245 292 887 850
Fire & Safety/Diversified Products
Net sales $ 66,993 $ 65,524 $ 194,385 $ 192,633
Operating income (c) 17,046 15,956 44,509 43,264
Operating margin 25.4 % 24.4 % 22.9 % 22.5 %
Depreciation and amortization $ 1,195 $ 1,287 $ 3,993 $ 3,815
Capital expenditures 786 853 2,662 2,569
Company
Net sales $ 373,731 $ 323,249 $ 1,107,855 $ 986,317
Operating income (d) 65,963 49,269 189,534 140,666
Operating margin 17.6 % 15.2 % 17.1 % 14.3 %
Depreciation and amortization (e) $ 15,235 $ 14,135 $ 44,888 $ 41,893
Capital expenditures 7,936 7,081 25,972 18,303
(a) Calculated by applying the two-class method of allocating earnings to common stock and participating securities as required by ASC 260, Earnings Per Share.
(b) Three and nine month data includes acquisitions of OBL (July 2010) in the Fluid & Metering Technologies Group and Seals (April 2010) in the Health & Science Technologies Group from the date of acquisition.
(c) Group operating income excludes unallocated corporate operating expenses and restructuring related charges.
(d) Company operating income excludes restructuring related charges.
(e) Excludes amortization of debt issuance expenses.

SOURCE: IDEX Corporation

IDEX Corporation
Investor Contact:
Heath Mitts
Vice President - Corporate Finance
(847) 498-7070