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IDEX Reports First Quarter Results; Raises Full Year Guidance; Q1 Orders and Sales up 10 Percent Overall and 6 Percent Organically; Q1 Reported EPS Was $1.48 With Adjusted EPS Of $1.51

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IDEX Corporation (NYSE:IEX) today announced its financial results for the three month period ended March 31, 2021.

First Quarter 2021 Highlights

  • Record orders and sales were up 10 percent overall and 6 percent organically compared to Q1 2020
  • Reported operating margin was 23.9 percent with adjusted operating margin of 24.3 percent
  • Reported EPS was $1.48 with adjusted EPS of $1.51
  • Record Q1 cash from operations of $109.3 million led to record Q1 free cash flow of $94.7 million
  • Full year adjusted EPS guidance raised to $6.05 to $6.20
  • Completed the acquisition of ABEL Pumps, L.P. on March 10, 2021
  • Reached an agreement in April 2021 to acquire Airtech Group, Inc., US Valve Corporation and related entities (Airtech)

First Quarter 2021

Orders of $710.7 million were up 10 percent compared with the prior year period (+6 percent organic, +1 percent acquisitions and +3 percent foreign currency translation).

Sales of $652.0 million were up 10 percent compared with the prior year period (+6 percent organic, +1 percent acquisitions and +3 percent foreign currency translation).

Gross margin of 44.9 percent was down 80 basis points compared with the prior year period primarily as a result of increases to inventory reserves associated with COVID-19 new product development (NPD) opportunities not materializing, lower margins from the ABEL and Flow MD acquisitions and a fair value inventory step-up charge, partially offset by higher volume and price. Excluding the $0.7 million pre-tax fair value inventory step-up charge related to the ABEL acquisition, adjusted gross margin of 45.0 percent was down 70 basis points compared with the prior year period.

Operating income of $155.5 million resulted in an operating margin of 23.9 percent which was up 40 basis points compared with the prior year period primarily as a result of higher volume, price and cost savings, partially offset by restructuring expenses and asset impairments and lower gross margin. Excluding the $0.7 million pre-tax fair value inventory step-up charge and $2.2 million of restructuring expenses and asset impairments, adjusted operating income was $158.4 million with an adjusted operating margin of 24.3 percent, up 80 basis points compared with the prior year period.

Provision for income taxes of $32.9 million in the first quarter of 2021 resulted in an effective tax rate (ETR) of 22.6 percent, which was higher than the prior year period ETR of 20.0 percent primarily due to a decrease in the excess tax benefits related to share-based compensation.

Net income attributable to IDEX was $112.7 million which resulted in EPS attributable to IDEX of $1.48. Excluding the fair value inventory step-up charge and restructuring expenses and asset impairments, adjusted EPS attributable to IDEX was $1.51, an increase of 18 cents, or 14 percent, from the prior year period. EBITDA of $177.9 million was 27.3 percent of sales and covered interest expense by almost 17 times. Adjusted EBITDA of $180.8 million was 27.7 percent of sales and covered interest expense by almost 17 times.

Cash from operations of $109.3 million was up 29.0 percent from the prior year period primarily due to higher earnings and a favorable impact from the timing of accrued expenses. Cash from operations led to free cash flow of $94.7 million, which was up 32 percent from the prior year period and was 82 percent of adjusted net income attributable to IDEX.

"Our first quarter results were strong, with demand improving both sequentially and year over year as an uneven global recovery continues. We booked record first quarter orders of $711 million and built $59 million of additional backlog. Organic orders and sales were solid in the first quarter, both up 6 percent. Our teams have performed well amid a variety of obstacles, meeting the challenges as market conditions improved. Strong execution by our teams continues to be central to maintaining our critical supply chains, staying ahead of inflation and converting orders to cash. This execution delivered robust operating margin, EPS and free cash flow that exceeded our expectations. First quarter adjusted operating margin of 24.3 percent drove adjusted EPS of $1.51, up 14% versus prior year. Cash conversion continued to be outstanding, with record free cash flow of $95 million in the first quarter, which was 32 percent higher compared to the prior year period.

 

 

In addition to delivering strong financial results, we have been able to make significant progress in our capital deployment efforts. Earlier today, we announced our second acquisition for 2021. We have entered into a definitive agreement to acquire Airtech. Airtech is a leading global manufacturer of highly engineered specialty blowers, vacuum pumps and valves. It will be an excellent complement to our existing GAST business in the Health & Science Technologies (HST) segment. The M&A funnel remains robust and we are fully committed to pursuing additional opportunities in 2021 that will create value for our shareholders, customers and employees.

 

 

With the strong start to 2021, combined with improved market conditions, we are raising our full year adjusted EPS guidance to $6.05 to $6.20 with second quarter adjusted EPS of $1.60 to $1.63. We are also increasing our full year organic revenue growth expectations to 9 to 10 percent with 18 to 20 percent growth in the second quarter."

 

 

Eric D. Ashleman

 

Chief Executive Officer and President

First Quarter 2021 Segment Highlights

Fluid & Metering Technologies

  • Sales of $243.4 million reflected a 7 percent increase compared to the first quarter of 2020 (+2 percent organic, +3 percent acquisition and +2 percent foreign currency translation).
  • Operating income of $62.9 million resulted in an operating margin of 25.8 percent which was down 360 basis points compared with the prior year period primarily due to increases to inventory reserves associated with COVID-19 NPD opportunities not materializing, lower margins from the ABEL and Flow MD acquisitions, restructuring expenses and asset impairments and the fair value inventory step-up charge, partially offset by higher volume and cost savings. Excluding the $0.7 million pre-tax fair value inventory step-up charge and $0.9 million of restructuring expenses and asset impairments, adjusted operating income was $64.5 million with an adjusted operating margin of 26.5 percent, a 290 basis point decrease compared to the prior year period.
  • EBITDA of $69.9 million resulted in an EBITDA margin of 28.7 percent. Excluding the $0.7 million pre-tax fair value inventory step-up charge and $0.9 million of restructuring expenses and asset impairments, adjusted EBITDA of $71.5 million resulted in an adjusted EBITDA margin of 29.4 percent, a 210 basis point decrease compared to the prior year period.

Health & Science Technologies

  • Sales of $250.4 million reflected a 12 percent increase compared to the first quarter of 2020 (+9 percent organic and +3 percent foreign currency translation).
  • Operating income of $66.7 million resulted in an operating margin of 26.6 percent which was up 310 basis points compared with the prior year period primarily due to higher volume and cost savings, partially offset by restructuring expenses and asset impairments. Excluding $0.6 million of restructuring expenses and asset impairments, adjusted operating income was $67.3 million with an adjusted operating margin of 26.9 percent, a 340 basis point increase compared to the prior year period.
  • EBITDA of $77.5 million resulted in an EBITDA margin of 31.0 percent. Excluding $0.6 million of restructuring expenses and asset impairments, adjusted EBITDA of $78.1 million resulted in an adjusted EBITDA margin of 31.2 percent, a 270 basis point increase compared to the prior year period.

Fire & Safety/Diversified Products

  • Sales of $159.5 million reflected an 11 percent increase compared to the first quarter of 2020 (+7 percent organic and +4 percent foreign currency translation).
  • Operating income of $44.6 million resulted in an operating margin of 27.9 percent which was up 150 basis points compared with the prior year period primarily as a result of higher volume and cost savings. Excluding $0.1 million of restructuring expenses and asset impairments, adjusted operating income was $44.7 million with an adjusted operating margin of 28.0 percent, a 160 basis point increase compared to the prior year period.
  • EBITDA of $48.7 million resulted in an EBITDA margin of 30.5 percent. Excluding $0.1 million of restructuring expenses and asset impairments, adjusted EBITDA of $48.8 million resulted in an adjusted EBITDA margin of 30.6 percent, a 140 basis point increase compared to the prior year period.

Corporate Costs

Corporate costs increased to $18.6 million in the first quarter of 2021 from $17.5 million in the first quarter of 2020 primarily as a result of higher acquisition, restructuring and variable compensation expenses.

Acquisition

On March 10, 2021, the Company acquired ABEL Pumps, L.P. and certain of its affiliates (ABEL). ABEL designs and manufactures highly engineered reciprocating positive displacement pumps for a variety of end markets, including mining, marine, power, water, wastewater and other general industries. Headquartered in Büchen, Germany, with sales and service locations in Madrid, Spain and Pittsburgh, Pennsylvania, ABEL operates in our Pumps reporting unit within the Fluid & Metering Technologies segment. ABEL was acquired for cash consideration of $106.2 million. The entire purchase price was funded with cash on hand.

Non-U.S. GAAP Measures of Financial Performance

The Company supplements certain U.S. GAAP financial performance metrics with non-U.S. GAAP financial performance metrics. Management believes these non-U.S. GAAP financial performance metrics provide investors with greater insight, transparency and a more comprehensive understanding of the financial information used by management in its financial and operational decision making because certain of these adjusted metrics exclude items not reflective of ongoing operations, such as restructuring expenses and asset impairments and a fair value inventory step-up charge. Reconciliations of non-U.S. GAAP financial performance metrics to their most comparable U.S. GAAP financial performance metrics are defined and presented below and should not be considered a substitute for, nor superior to, the financial data prepared in accordance with U.S. GAAP. There were no adjustments to U.S. GAAP financial performance metrics other than the items noted below.

  • Organic orders and sales are calculated excluding amounts from acquired or divested businesses during the first twelve months of ownership or prior to divestiture and the impact of foreign currency translation.
  • Adjusted gross profit is calculated as gross profit plus fair value inventory step-up charges.
  • Adjusted gross margin is calculated as adjusted gross profit divided by net sales.
  • Adjusted operating income is calculated as operating income plus fair value inventory step-up charges plus restructuring expenses and asset impairments.
  • Adjusted operating margin is calculated as adjusted operating income divided by net sales.
  • Adjusted net income is calculated as net income plus fair value inventory step-up charges plus restructuring expenses and asset impairments, net of the statutory tax expense or benefit.
  • Adjusted EPS is calculated as adjusted net income divided by the diluted weighted average shares outstanding.
  • EBITDA is calculated as net income plus interest expense plus provision for income taxes plus depreciation and amortization. We reconcile EBITDA to net income on a consolidated basis as we do not allocate consolidated interest expense or consolidated provision for income taxes to our segments.
  • EBITDA interest coverage is calculated as EBITDA divided by consolidated interest expense.
  • Adjusted EBITDA is calculated as EBITDA plus fair value inventory step-up charges plus restructuring expenses and asset impairments.
  • Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net sales.
  • Adjusted EBITDA interest coverage is calculated as Adjusted EBITDA divided by consolidated interest expense.
  • Free cash flow is calculated as cash flow from operating activities less capital expenditures.

Table 1: Reconciliations of the Change in Net Sales to Organic Net Sales

 

 

Three Months Ended March 31, 2021

 

FMT

 

HST

 

FSDP

 

IDEX

Change in net sales

7

%

 

12

%

 

11

%

 

10

%

- Net impact from acquisitions

3

%

 

%

 

%

 

1

%

- Impact from FX

2

%

 

3

%

 

4

%

 

3

%

Change in organic net sales

2

%

 

9

%

 

7

%

 

6

%

Table 2: Reconciliations of Reported-to-Adjusted Gross Profit and Margin (dollars in thousands)

 

 

 

 

 

Three Months Ended March 31,

 

2021

 

2020

Gross profit

$

292,623

 

 

$

271,956

 

+ Fair value inventory step-up charge

664

 

 

 

Adjusted gross profit

$

293,287

 

 

$

271,956

 

 

 

 

 

Net sales

$

652,036

 

 

$

594,462

 

 

 

 

 

Gross margin

44.9

%

 

45.7

%

Adjusted gross margin

45.0

%

 

45.7

%

Table 3: Reconciliations of Reported-to-Adjusted Operating Income and Margin (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

2021

 

 

2020

 

 

FMT

 

HST

 

FSDP

 

Corporate

 

IDEX

 

FMT

 

HST

 

FSDP

 

Corporate

 

IDEX

Reported operating income (loss)

$

62,897

 

 

$

66,650

 

 

$

44,560

 

 

$

(18,560

)

 

 

$

155,547

 

 

$

66,771

 

 

$

52,643

 

 

$

38,037

 

 

$

(17,510

)

 

 

$

139,941

 

+ Restructuring expenses and asset impairments

943

 

 

625

 

 

97

 

 

563

 

 

 

2,228

 

 

 

 

 

 

 

 

 

 

 

 

+ Fair value inventory step-up charge

664

 

 

 

 

 

 

 

 

 

664

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income (loss)

$

64,504

 

 

$

67,275

 

 

$

44,657

 

 

$

(17,997

)

 

 

$

158,439

 

 

$

66,771

 

 

$

52,643

 

 

$

38,037

 

 

$

(17,510

)

 

 

$

139,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales (eliminations)

$

243,365

 

 

$

250,369

 

 

$

159,484

 

 

$

(1,182

)

 

 

$

652,036

 

 

$

226,861

 

 

$

224,059

 

 

$

144,324

 

 

$

(782

)

 

 

$

594,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating margin

25.8

%

 

26.6

%

 

27.9

%

 

n/m

 

 

23.9

%

 

29.4

%

 

23.5

%

 

26.4

%

 

n/m

 

 

23.5

%

Adjusted operating margin

26.5

%

 

26.9

%

 

28.0

%

 

n/m

 

 

24.3

%

 

29.4

%

 

23.5

%

 

26.4

%

 

n/m

 

 

23.5

%

Table 4: Reconciliations of Reported-to-Adjusted Net Income and EPS (in thousands, except EPS)

 

 

 

 

 

Three Months Ended March 31,

 

2021

 

 

2020

Reported net income attributable to IDEX

$

112,708

 

 

 

$

101,998

 

+ Restructuring expenses and asset impairments

2,228

 

 

 

 

+ Tax impact on restructuring expenses and asset impairments

(533

)

 

 

 

+ Fair value inventory step-up charge

664

 

 

 

 

+ Tax impact on fair value inventory step-up charge

(199

)

 

 

 

Adjusted net income attributable to IDEX

$

114,868

 

 

 

$

101,998

 

 

 

 

 

 

Three Months Ended March 31,

 

2021

 

 

2020

Reported diluted EPS attributable to IDEX

$

1.48

 

 

 

$

1.33

 

+ Restructuring expenses and asset impairments

0.03

 

 

 

 

+ Tax impact on restructuring expenses and asset impairments

(0.01

)

 

 

 

+ Fair value inventory step-up charge

0.01

 

 

 

 

+ Tax impact on fair value inventory step-up charge

 

 

 

 

Adjusted diluted EPS attributable to IDEX

$

1.51

 

 

 

$

1.33

 

 

 

 

 

Diluted weighted average shares outstanding

76,341

 

 

 

76,452

 

Table 5: Reconciliations of EBITDA to Net Income (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

2021

 

 

 

 

 

2020

 

 

 

 

FMT

 

HST

 

FSDP

 

Corporate

 

IDEX

 

FMT

 

HST

 

FSDP

 

Corporate

 

IDEX

Reported operating income (loss)

$

62,897

 

 

$

66,650

 

 

 

$

44,560

 

 

 

$

(18,560

)

 

 

$

155,547

 

 

 

$

66,771

 

 

$

52,643

 

 

 

$

38,037

 

 

 

$

(17,510

)

 

 

$

139,941

 

- Other (income) expense - net

9

 

 

(345

)

 

 

(271

)

 

 

(241

)

 

 

(848

)

 

 

766

 

 

(531

)

 

 

(315

)

 

 

1,645

 

 

 

1,565

 

+ Depreciation and amortization

7,053

 

 

10,513

 

 

 

3,872

 

 

 

106

 

 

 

21,544

 

 

 

5,398

 

 

10,659

 

 

 

3,759

 

 

 

181

 

 

 

19,997

 

EBITDA

69,941

 

 

77,508

 

 

 

48,703

 

 

 

(18,213

)

 

 

177,939

 

 

 

71,403

 

 

63,833

 

 

 

42,111

 

 

 

(18,974

)

 

 

158,373

 

- Interest expense

 

 

 

 

 

 

 

 

10,776

 

 

 

 

 

 

 

 

 

 

 

10,877

 

- Provision for income taxes

 

 

 

 

 

 

 

 

32,947

 

 

 

 

 

 

 

 

 

 

 

25,501

 

- Depreciation and amortization

 

 

 

 

 

 

 

 

21,544

 

 

 

 

 

 

 

 

 

 

 

19,997

 

Reported net income

 

 

 

 

 

 

 

 

$

112,672

 

 

 

 

 

 

 

 

 

 

 

$

101,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales (eliminations)

$

243,365

 

 

$

250,369

 

 

 

$

159,484

 

 

 

$

(1,182

)

 

 

$

652,036

 

 

 

$

226,861

 

 

$

224,059

 

 

 

$

144,324

 

 

 

$

(782

)

 

 

$

594,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating margin

25.8

%

 

26.6

 

%

 

27.9

 

%

 

n/m

 

 

23.9

 

%

 

29.4

%

 

23.5

 

%

 

26.4

 

%

 

n/m

 

 

23.5

%

EBITDA margin

28.7

%

 

31.0

 

%

 

30.5

 

%

 

n/m

 

 

27.3

 

%

 

31.5

%

 

28.5

 

%

 

29.2

 

%

 

n/m

 

 

26.6

%

EBITDA interest coverage

 

 

 

 

 

 

 

 

16.5

 

 

 

 

 

 

 

 

 

 

 

14.6

 

Table 6 : Reconciliations of EBITDA to Adjusted EBITDA (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

2021

 

 

2020

 

 

FMT

 

HST

 

FSDP

 

Corporate

 

IDEX

 

FMT

 

HST

 

FSDP

 

Corporate

 

IDEX

EBITDA(1)

$

69,941

 

 

$

77,508

 

 

$

48,703

 

 

$

(18,213

)

 

 

$

177,939

 

 

$

71,403

 

 

$

63,833

 

 

$

42,111

 

 

$

(18,974

)

 

 

$

158,373

 

+ Restructuring expenses and asset impairments

943

 

 

625

 

 

97

 

 

563

 

 

 

2,228

 

 

 

 

 

 

 

 

 

 

 

 

+ Fair value inventory step-up charge

664

 

 

 

 

 

 

 

 

 

664

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

71,548

 

 

$

78,133

 

 

$

48,800

 

 

$

(17,650

)

 

 

$

180,831

 

 

$

71,403

 

 

$

63,833

 

 

$

42,111

 

 

$

(18,974

)

 

 

$

158,373

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

29.4

%

 

31.2

%

 

30.6

%

 

n/m

 

 

27.7

%

 

31.5

%

 

28.5

%

 

29.2

%

 

n/m

 

 

26.6

%

Adjusted EBITDA interest coverage

 

 

 

 

 

 

 

 

 

16.8

 

 

 

 

 

 

 

 

 

 

 

14.6

 

(1) EBITDA, a non-GAAP financial measure, is reconciled to net income, its most directly comparable GAAP financial measure, immediately above in Table 5.

Table 7: Reconciliations of Cash Flows from Operating Activities to Free Cash Flow (in thousands)

 

 

Three Months Ended

 

March 31,

 

December 31,

 

2021

 

2020

 

2020

Cash flows from operating activities

$

109,324

 

 

$

84,760

 

 

$

161,374

 

- Capital expenditures

14,609

 

 

12,762

 

 

12,107

 

Free cash flow

$

94,715

 

 

$

71,998

 

 

$

149,267

 

Conference Call to be Broadcast over the Internet

IDEX will broadcast its first quarter earnings conference call over the Internet on Wednesday, April 28, 2021 at 9:30 a.m. CT. Chief Executive Officer and President Eric Ashleman and Senior Vice President and Chief Financial Officer William Grogan 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 877.660.6853 (or 201.612.7415 for international participants) using the ID #13712089.

Forward-Looking Statements

This news release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, the Company's expected organic sales growth, the anticipated benefits of the Company's acquisition of ABEL Pumps, L.P. and certain of its affiliates, and the anticipated continuing effects of the COVID-19 pandemic, including with respect to the Company's sales, improvements in the Company's end markets, facility closures, supply chains and access to capital, capital expenditures, acquisitions, cost reductions, cash flow, revenues, earnings, liquidity, capital resources, market conditions, global economies and operating improvements, and are indicated by words or phrases such as "anticipates," "estimates," "plans," "guidance," "expects," "projects," "forecasts," "should," "could," "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: the duration of the COVID-19 pandemic and the continuing effects of the COVID-19 pandemic on our ability to operate our business and facilities, on our customers, on supply chains and on the U.S. and global economy generally; 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 the Company's results, particularly in light of the low levels of order backlogs it typically maintains; the Company's 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; developments with respect to trade policy and tariffs; 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. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the "Risk Factors" section included in the Company's most recent annual report on Form 10-K and the Company's subsequent quarterly reports filed with the SEC as well as the other risks discussed in the Company's filings with the SEC. 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, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.

About IDEX

IDEX (NYSE:IEX) is a company that has undoubtedly touched your life in some way. In fact, IDEX businesses make thousands of products that are mission-critical components in everyday activities. Chances are the car you're driving has a BAND-IT® clamp holding your side airbag safely in place. If you were ever in a car accident, a Hurst Jaws of Life® rescue tool may have saved your life. If you or a family member is battling cancer, your doctor may have tested your DNA in a quest to find the best targeted medicine for you. It's likely your DNA test was run on equipment that contains components made by our growing IDEX Health & Science team. Founded in 1988 with three small, entrepreneurial manufacturing companies, we're proud to say that we now call 40 diverse businesses around the world part of the IDEX family. With 7,000 employees and manufacturing operations in more than 20 countries, IDEX is a high-performing, global $2+ billion company committed to making trusted solutions that improve lives. IDEX shares are traded on the New York Stock Exchange under the symbol "IEX".

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

(Financial reports follow)

IDEX CORPORATION

Condensed Consolidated Statements of Operations

(in thousands except per share amounts)

(unaudited)

 

 

Three Months Ended

March 31,

 

2021

 

 

2020

Net sales

$

652,036

 

 

 

$

594,462

 

Cost of sales

359,413

 

 

 

322,506

 

Gross profit

292,623

 

 

 

271,956

 

Selling, general and administrative expenses

134,848

 

 

 

132,015

 

Restructuring expenses and asset impairments

2,228

 

 

 

 

Operating income

155,547

 

 

 

139,941

 

Other (income) expense - net

(848

)

 

 

1,565

 

Interest expense

10,776

 

 

 

10,877

 

Income before income taxes

145,619

 

 

 

127,499

 

Provision for income taxes

32,947

 

 

 

25,501

 

Net income

$

112,672

 

 

 

$

101,998

 

Net (income) loss attributable to noncontrolling interest

36

 

 

 

 

Net income attributable to IDEX

$

112,708

 

 

 

$

101,998

 

 

 

 

 

Earnings per Common Share:

 

 

 

Basic earnings per common share attributable to IDEX

$

1.48

 

 

 

$

1.35

 

Diluted earnings per common share attributable to IDEX

$

1.48

 

 

 

$

1.33

 

 

 

 

 

Share Data:

 

 

 

Basic weighted average common shares outstanding

75,892

 

 

 

75,740

 

Diluted weighted average common shares outstanding

76,341

 

 

 

76,452

 

IDEX CORPORATION

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

March 31, 2021

 

December 31, 2020

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

958,142

 

 

$

1,025,851

 

Receivables - net

341,793

 

 

293,146

 

Inventories

304,636

 

 

289,910

 

Other current assets

46,573

 

 

48,324

 

Total current assets

1,651,144

 

 

1,657,231

 

Property, plant and equipment - net

302,805

 

 

298,273

 

Goodwill and intangible assets

2,370,305

 

 

2,311,137

 

Other noncurrent assets

136,477

 

 

147,757

 

Total assets

$

4,460,731

 

 

$

4,414,398

 

 

 

 

 

Liabilities and equity

 

 

 

Current liabilities

 

 

 

Trade accounts payable

$

171,379

 

 

$

151,993

 

Accrued expenses

206,088

 

 

208,828

 

Short-term borrowings

46

 

 

88

 

Dividends payable

 

 

38,149

 

Total current liabilities

377,513

 

 

399,058

 

Long-term borrowings

1,044,589

 

 

1,044,354

 

Other noncurrent liabilities

428,614

 

 

430,660

 

Total liabilities

1,850,716

 

 

1,874,072

 

Shareholders' equity

2,609,926

 

 

2,540,203

 

Noncontrolling interest

89

 

 

123

 

Total equity

2,610,015

 

 

2,540,326

 

Total liabilities and equity

$

4,460,731

 

 

$

4,414,398

 

IDEX CORPORATION

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Three Months Ended March 31,

 

2021

 

 

2020

 

Cash flows from operating activities

 

 

 

Net income

$

112,672

 

 

 

$

101,998

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Asset impairments

136

 

 

 

 

 

Depreciation and amortization

10,554

 

 

 

10,453

 

 

Amortization of intangible assets

10,990

 

 

 

9,544

 

 

Amortization of debt issuance expenses

366

 

 

 

343

 

 

Share-based compensation expense

7,752

 

 

 

6,730

 

 

Deferred income taxes

561

 

 

 

2,012

 

 

Non-cash interest expense associated with forward starting swaps

859

 

 

 

1,545

 

 

Changes in (net of the effect from acquisitions):

 

 

 

Receivables

(46,289

)

 

 

(24,190

)

 

Inventories

(7,539

)

 

 

(23,717

)

 

Other current assets

3,350

 

 

 

(14,267

)

 

Trade accounts payable

20,042

 

 

 

14,146

 

 

Deferred revenue

11,089

 

 

 

25,651

 

 

Accrued expenses

(11,592

)

 

 

(23,870

)

 

Other - net

(3,627

)

 

 

(1,618

)

 

Net cash flows provided by operating activities

109,324

 

 

 

84,760

 

 

Cash flows from investing activities

 

 

 

Purchases of property, plant and equipment

(14,609

)

 

 

(12,762

)

 

Acquisition of businesses, net of cash acquired

(106,236

)

 

 

(120,839

)

 

Proceeds from disposal of fixed assets

211

 

 

 

41

 

 

Other - net

1,100

 

 

 

(160

)

 

Net cash flows used in investing activities

(119,534

)

 

 

(133,720

)

 

Cash flows from financing activities

 

 

 

Borrowings under revolving credit facilities

 

 

 

150,000

 

 

Dividends paid

(38,149

)

 

 

(38,736

)

 

Proceeds from stock option exercises

3,231

 

 

 

2,089

 

 

Repurchases of common stock

 

 

 

(108,907

)

 

Shares surrendered for tax withholding

(5,460

)

 

 

(12,119

)

 

Other - net

(46

)

 

 

(129

)

 

Net cash flows used in financing activities

(40,424

)

 

 

(7,802

)

 

Effect of exchange rate changes on cash and cash equivalents

(17,075

)

 

 

(6,600

)

 

Net decrease in cash

(67,709

)

 

 

(63,362

)

 

Cash and cash equivalents at beginning of year

1,025,851

 

 

 

632,581

 

 

Cash and cash equivalents at end of period

$

958,142

 

 

 

$

569,219

 

 

IDEX CORPORATION

Company and Segment Financial Information - Reported

(dollars in thousands)

(unaudited)

 

 

 

Three Months Ended

March 31, (a)

 

 

2021

 

 

2020

 

 

Fluid & Metering Technologies

 

 

 

 

Net sales

$

243,365

 

 

 

$

226,861

 

 

 

Operating income (b)

62,897

 

 

 

66,771

 

 

 

Operating margin

25.8

 

%

 

29.4

 

%

 

EBITDA(c)

$

69,941

 

 

 

$

71,403

 

 

 

EBITDA margin(c)

28.7

 

%

 

31.5

 

%

 

Depreciation and amortization

$

7,053

 

 

 

$

5,398

 

 

 

Capital expenditures

3,280

 

 

 

4,528

 

 

 

 

 

 

 

 

Health & Science Technologies

 

 

 

 

Net sales

$

250,369

 

 

 

$

224,059

 

 

 

Operating income (b)

66,650

 

 

 

52,643

 

 

 

Operating margin

26.6

 

%

 

23.5

 

%

 

EBITDA(c)

$

77,508

 

 

 

$

63,833

 

 

 

EBITDA margin(c)

31.0

 

%

 

28.5

 

%

 

Depreciation and amortization

$

10,513

 

 

 

$

10,659

 

 

 

Capital expenditures

9,129

 

 

 

5,329

 

 

 

 

 

 

 

 

Fire & Safety/Diversified Products

 

 

 

 

Net sales

$

159,484

 

 

 

$

144,324

 

 

 

Operating income (b)

44,560

 

 

 

38,037

 

 

 

Operating margin

27.9

 

%

 

26.4

 

%

 

EBITDA(c)

$

48,703

 

 

 

$

42,111

 

 

 

EBITDA margin(c)

30.5

 

%

 

29.2

 

%

 

Depreciation and amortization

$

3,872

 

 

 

$

3,759

 

 

 

Capital expenditures

1,769

 

 

 

2,884

 

 

 

 

 

 

 

 

Corporate Office and Eliminations

 

 

 

 

Intersegment sales eliminations

$

(1,182

)

 

 

$

(782

)

 

 

Operating income (b)

(18,560

)

 

 

(17,510

)

 

 

EBITDA(c)

(18,213

)

 

 

(18,974

)

 

 

Depreciation and amortization (d)

106

 

 

 

181

 

 

 

Capital expenditures

431

 

 

 

21

 

 

 

 

 

 

 

 

Company

 

 

 

 

Net sales

$

652,036

 

 

 

$

594,462

 

 

 

Operating income

155,547

 

 

 

139,941

 

 

 

Operating margin

23.9

 

%

 

23.5

 

%

 

EBITDA(c)

$

177,939

 

 

 

$

158,373

 

 

 

EBITDA margin(c)

27.3

 

%

 

26.6

 

%

 

Depreciation and amortization (d)

$

21,544

 

 

 

$

19,997

 

 

 

Capital expenditures

14,609

 

 

 

12,762

 

 

IDEX CORPORATION

Company and Segment Financial Information - Adjusted

(dollars in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended

March 31, (a)

 

 

2021

 

 

2020

 

 

Fluid & Metering Technologies

 

 

 

 

Net sales

$

243,365

 

 

 

$

226,861

 

 

 

Adjusted operating income (b)(c)

64,504

 

 

 

66,771

 

 

 

Adjusted operating margin(c)

26.5

 

%

 

29.4

 

%

 

Adjusted EBITDA(c)

$

71,548

 

 

 

$

71,403

 

 

 

Adjusted EBITDA margin(c)

29.4

 

%

 

31.5

 

%

 

Depreciation and amortization

$

7,053

 

 

 

$

5,398

 

 

 

Capital expenditures

3,280

 

 

 

4,528

 

 

 

 

 

 

 

 

Health & Science Technologies

 

 

 

 

Net sales

$

250,369

 

 

 

$

224,059

 

 

 

Adjusted operating income (b)(c)

67,275

 

 

 

52,643

 

 

 

Adjusted operating margin(c)

26.9

 

%

 

23.5

 

%

 

Adjusted EBITDA(c)

$

78,133

 

 

 

$

63,833

 

 

 

Adjusted EBITDA margin(c)

31.2

 

%

 

28.5

 

%

 

Depreciation and amortization

$

10,513

 

 

 

$

10,659

 

 

 

Capital expenditures

9,129

 

 

 

5,329

 

 

 

 

 

 

 

 

Fire & Safety/Diversified Products

 

 

 

 

Net sales

$

159,484

 

 

 

$

144,324

 

 

 

Adjusted operating income (b)(c)

44,657

 

 

 

38,037

 

 

 

Adjusted operating margin(c)

28.0

 

%

 

26.4

 

%

 

Adjusted EBITDA(c)

$

48,800

 

 

 

$

42,111

 

 

 

Adjusted EBITDA margin(c)

30.6

 

%

 

29.2

 

%

 

Depreciation and amortization

$

3,872

 

 

 

$

3,759

 

 

 

Capital expenditures

1,769

 

 

 

2,884

 

 

 

 

 

 

 

 

Corporate Office and Eliminations

 

 

 

 

Intersegment sales eliminations

$

(1,182

)

 

 

$

(782

)

 

 

Adjusted operating income (b)(c)

(17,997

)

 

 

(17,510

)

 

 

Adjusted EBITDA(c)

(17,650

)

 

 

(18,974

)

 

 

Depreciation and amortization(d)

106

 

 

 

181

 

 

 

Capital expenditures

431

 

 

 

21

 

 

 

 

 

 

 

 

Company

 

 

 

 

Net sales

$

652,036

 

 

 

$

594,462

 

 

 

Adjusted operating income(c)

158,439

 

 

 

139,941

 

 

 

Adjusted operating margin(c)

24.3

 

%

 

23.5

 

%

 

Adjusted EBITDA(c)

$

180,831

 

 

 

$

158,373

 

 

 

Adjusted EBITDA margin(c)

27.7

 

%

 

26.6

 

%

 

Depreciation and amortization (d)

$

21,544

 

 

 

$

19,997

 

 

 

Capital expenditures

14,609

 

 

 

12,762

 

 

(a)

Three month data includes the results of both the ABEL acquisition (March 2021) and the Flow MD acquisition (February 2020) in the Fluid & Metering Technologies segment.

(b)

Segment operating income excludes unallocated corporate operating expenses which are included in Corporate Office and Eliminations.

(c)

These are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their most comparable measure calculated and presented in accordance with GAAP, see the reconciliation tables above.

(d)

Depreciation and amortization excludes amortization of debt issuance costs.

 

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