IDEX Reports Third Quarter Adjusted EPS of 66 Cents, Record Free Cash Flow and an Additional $200 Million Share Repurchase

  IDEX Reports Third Quarter Adjusted EPS of 66 Cents, Record Free Cash Flow
  and an Additional $200 Million Share Repurchase Authorization

Business Wire

LAKE FOREST, Ill. -- October 22, 2012

IDEX Corporation (NYSE: IEX) today announced its financial results for the
three-month period ended September 30, 2012.

New orders in the quarter totaled $464 million, down 3 percent from the prior
year period. Sales in the quarter totaled $480 million, 1 percent higher than
the prior year period. For the quarter, on an organic basis, orders were 4
percent lower and sales were 1 percent higher than the prior year period.

Third quarter 2012 operating income, adjusted for $7.1 million of
restructuring related charges, was $87.7 million, resulting in an adjusted
operating margin of 18.3 percent, equal to the prior year adjusted operating

Excluding the impact of restructuring related charges in both years and the
acquisition fair value inventory charge in the prior year, third quarter
adjusted earnings per share were 66 cents, a decrease of 5 cents, or 7
percent. The unfavorable year-over-year variance is primarily the result of
two one-off items – a prior year benefit from CEO forfeited equity
compensation and a true-up of the 2011 year-to-date tax rate.

Free cash flow was $92 million for the quarter, a 7 percent increase from the
third quarter of the prior year due to higher operating income and improved
working capital.

Additionally, the Company’s Board of Directors has increased the authorized
level for repurchases of common stock by $200 million. The increased
authorization will be added to the approximately $50 million that remains
available from the existing authorization approved by the Board of Directors
in December 2011. Repurchases under the program will be funded with future
cash flow generation.

Third Quarter Highlights

  *Orders decreased 3 percent compared to the prior year (-4 percent organic,
    +3 percent acquisition and -2 percent foreign currency translation).
  *Sales increased 1 percent compared to the prior year (+1 percent organic,
    +2 percent acquisition and -2 percent foreign currency translation).
  *Reported net income of $50 million was $2 million, or 4 percent, higher
    than the prior year. Excluding restructuring related charges, adjusted net
    income was $55 million or 7 percent lower than prior year adjusted net
  *Reported EPS of 60 cents was 2 cents, or 3 percent, higher than the prior
    year EPS. Adjusted EPS of 66 cents was 5 cents, or 7 percent, lower than
    the prior year adjusted EPS.
  *EBITDA of $100 million was 21 percent of sales and covered interest
    expense by nearly 10 times.
  *Free cash flow was $92 million, representing a record and over 180 percent
    of net income. Year-to-date free cash flow continues to be strong – up 41
    percent from the prior year.
  *During the quarter, the Company completed another strategic acquisition,
    Matcon, a global leader in material processing solutions in the
    Pharmaceuticals, Food, Plastics and Fine Chemicals industries.
  *The Company completed the repurchase of 1 million shares of common stock
    for $39 million in the third quarter. Over two percent of the outstanding
    shares of common stock, or 1.9 million shares, have been purchased by the
    Company in 2012.

“We achieved solid profit performance and excellent cash generation in the
third quarter in a difficult global environment. Third quarter adjusted EPS of
66 cents exceeded our expectations, primarily as a result of our continued
focus on improved productivity and structural cost reductions. Our operating
model and team have proven their ability to excel in this environment, which
is evident by the 18.3 percent operating margins and record free cash flow
generation of $92 million.

Our strong balance sheet and cash generation provide us ample opportunity to
deploy capital and remain focused on delivering robust and consistent
shareholder returns. In addition to our longstanding investment priorities of
organic growth and strategic acquisitions, our Board of Directors has
increased the authorization level for the repurchase of our shares by $200
million, providing us with approximately $250 million of total availability.
Annually, we intend to repurchase a minimum of one to two percent of the
Company’s outstanding shares of common stock, with the flexibility to
opportunistically increase the purchases when the stock is trading at a
discount to the Company’s intrinsic value. We believe the repurchase of our
shares in conjunction with consistent shareholder dividends and strategic
acquisitions is a prudent use of our cash flow to maximize our shareholders’
total return.

We expect market conditions to remain challenging, specifically outside the
US, resulting in expected fourth quarter flat organic revenue. Despite this
market volatility, our disciplined execution allows us to maintain our prior
full year 2012 adjusted EPS guidance of $2.65 - $2.70.”

Andrew K. Silvernail
Chairman and Chief Executive Officer

Third Quarter 2012 Business Highlights (Operating margin excludes
restructuring related and non-cash fair value inventory charges)

Fluid & Metering Technologies

  *Sales in the third quarter of $198 million reflected a 4 percent decrease
    compared to the third quarter of 2011 (-1 percent organic and -3 percent
    foreign currency translation).
  *Operating margin of 21.4 percent represented a 130 basis point improvement
    compared with the third quarter of 2011 primarily due to productivity and
    cost reduction initiatives.

Health & Science Technologies

  *Sales in the third quarter of $176 million reflected a 2 percent increase
    compared to the third quarter of 2011 (-4 percent organic, +7 percent
    acquisitions and -1 percent foreign currency translation).
  *Operating margin of 17.3 percent represented a 150 basis point decrease
    compared with the third quarter 2011 primarily due to lower margins from
    recently acquired businesses.

Fire & Safety/Diversified Products

  *Sales in the third quarter of $108 million reflected a 10 percent increase
    compared to the third quarter of 2011 (+13 percent organic and -3 percent
    foreign currency translation).
  *Operating margin of 24.8 percent represented a 360 basis point increase
    compared with the third quarter of 2011 primarily due to improved
    productivity and cost reduction initiatives.

For the third quarter of 2012, Fluid & Metering Technologies contributed 41
percent of sales and 42 percent of operating income; Health & Science
Technologies accounted for 37 percent of sales and 31 percent of operating
income; and Fire & Safety/Diversified Products represented 22 percent of sales
and 27 percent of operating income.

Share Repurchase Authorization

The Company’s Board of Directors authorized the repurchase of an additional
$200 million of common stock. These repurchases will be made from time to time
in either open market transactions or in privately negotiated transactions.
Repurchases may also be made under 10b5-1 plans, which would permit shares to
be repurchased through pre-determined criteria when the Company would
otherwise be prohibited from doing so under insider trading laws. The timing,
volume and nature of share repurchases will be at the discretion of
management, dependent on market conditions, other priorities of cash
investment, applicable securities laws and other factors. This share
repurchase program does not obligate the Company to acquire any particular
amount of common stock, and it may be suspended or discontinued at any time.

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    For the Quarter Ended
                              September 30,              June 30,
                              2012    2011     Change     2012      Change
Income before taxes           $70.2    $63.1    11     %   $77.9      (10)   %
Depreciation and              19.5     20.5     (5)        19.2       2
Interest                      10.5     7.8      36         10.5       -
EBITDA                        100.2    91.4     10         107.6      (7)
Restructuring charge          7.1      2.9      n/m        2.6        n/m
CVI fair value inventory      -        12.8     (100)      -          -
Adjusted EBITDA               $107.3   $107.1   -          $110.2     (3)
Cash Flow from operating      $101.0   $94.8    7      %   $80.7      25     %
Capital expenditures          (9.4)    (9.4)    -          (10.2)     (7)
Excess tax benefit from       0.8      0.9      (8)        0.3        n/m
stock-based compensation
Free cash flow                $92.4    $86.3    7          $70.8      30

Conference Call to be Broadcast over the Internet

IDEX will broadcast its third quarter earnings conference call over the
Internet on Tuesday, October 23, 2012 at 9:30 a.m. CT. Chairman and Chief
Executive Officer Andy Silvernail and Vice President and Chief Financial
Officer Heath Mitts 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
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
855.859.2056 (or 404.537.3406 for international participants) using the ID #

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, 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 website at

                               (Tables follow)

Condensed Statements of Consolidated Operations
(in thousands except per share amounts)
                        Three Months Ended        Nine Months Ended
                        September 30,             September 30,
                      2012         2011       2012           2011
Net sales               $ 479,859     $ 476,881   $ 1,463,420     $  1,357,768
Cost of sales           285,019    295,349   862,578       812,697
Gross profit              194,840       181,532     600,842          545,071
Selling, general and
administrative            107,167       107,296     332,431          313,485
Restructuring           7,085      2,931     14,604        2,931
Operating income          80,588        71,305      253,807          228,655
Other expense             (132    )     441         (19       )      1,001
(income) - net
Interest expense        10,536     7,763     31,734        20,937
Income before income      70,184        63,101      222,092          206,717
Provision for income    20,057     14,765    65,443        60,248
Net income             $ 50,127    $ 48,336   $ 156,649     $  146,469
Earnings per Common
Basic earnings per      $ 0.60        $ 0.58      $ 1.88          $  1.77
common share ^(a)
Diluted earnings per    $ 0.60        $ 0.58      $ 1.87          $  1.75
common share ^(a)
Share Data:
Basic weighted average
common shares             82,482        82,402      82,820           81,994
Diluted weighted
average common shares     83,370        83,586      83,785           83,533
Condensed Consolidated Balance Sheets
(in thousands)
                                                  September 30,   December 31,
                                            2012           2011
Current assets
Cash and cash                                     $ 260,503       $  230,259
Receivables - net                                   277,505          252,845
Inventories                                         249,564          254,258
Other current assets                          56,292        51,799
Total current assets                                843,864          789,161
Property, plant and equipment - net                 223,762          213,717
Goodwill and                                        1,869,481        1,813,588
intangible assets
Other noncurrent                              20,328        19,641
Total assets                                 $ 2,957,435   $  2,836,107
Liabilities and shareholders' equity
Current liabilities
Trade accounts                                    $ 117,793       $  110,977
Accrued expenses                                    154,557          130,696
Short-term                                          5,152            2,444
Dividends payable                             16,540        14,161
Total current                                       294,042          258,278
Long-term borrowings                                782,768          806,366
Other noncurrent                              271,788       258,328
Total liabilities                                   1,348,598        1,322,972
Shareholders' equity                          1,608,837     1,513,135
Total liabilities and shareholders' equity       $ 2,957,435   $  2,836,107

Company and Business Group Financial Information
(dollars in thousands)
                           Three Months Ended        Nine Months Ended
                           September 30, ^(b)        September 30, ^(b)
                         2012        2011      2012        2011 ^(c) 
    Fluid & Metering
    Net sales              $             $           $ 621,433     $ 614,367
                           198,000       205,797
    Operating income       42,368        41,462      136,175       124,800
    Operating margin       21.4     %    20.1    %   21.9      %   20.3      %
    Depreciation and       $ 7,246       $ 8,603     $ 22,194      $ 24,841
    Capital                2,702         3,301       9,752         9,820
    Health & Science
    Net sales              $             $           $ 520,574     $ 442,619
                           176,225       172,911
    Operating income       30,480        32,515      90,494        91,881
    ^(d) (e)
    Operating margin       17.3     %    18.8    %   17.4      %   20.8      %
    Depreciation and       $ 10,273      $ 9,712     $ 29,293      $ 20,686
    Capital                4,622         4,607       10,435        9,918
    Fire &
    Products ^(c)
    Net sales              $             $           $ 328,173     $ 302,814
                           108,199       98,735
    Operating income       26,807        20,965      78,165        68,972
    Operating margin       24.8     %    21.2    %   23.8      %   22.8      %
    Depreciation and       $ 1,622       $ 1,844     $ 5,225       $ 6,561
    Capital                1,230         1,524       5,183         4,585
    Net sales              $             $           $             $
                           479,859       476,881     1,463,420     1,357,768
    Operating income       87,673        87,036      268,411       247,386
    Operating margin       18.3     %    18.3    %   18.3      %   18.2      %
    Depreciation and       $ 19,545      $           $ 57,938      $ 53,116
    amortization ^(f)                    20,540
    Capital                9,208         10,048      27,266        27,136
    Calculated by applying the two-class method of allocating earnings to
(a) common stock and participating securities as required by ASC 260, Earnings
    Per Share.
    Three and nine month data includes acquisitions of Matcon (July 2012), ERC
(b) (April 2012), CVI Melles Griot (June 2011), Microfluidics (March 2011) and
    Advanced Thin Films (January 2011) in the Health & Science Technologies
    segment from the date of acquisition.
    Financial data for 2011 has been revised to reflect the transfer of our
    Trebor business unit from the Health & Science Technologies segment to the
(c) Fluid & Metering Technologies segment as well as the movement of the
    Dispensing Equipment segment into the Fire & Safety/Diversified Products
    Group operating income excludes unallocated corporate operating expenses
(d) while both Group and Company operating income excludes restructuring
    related charges.
    Operating income excludes $12.8 million and $15.8 million for the three
(e) and nine months ending September 30, 2011, respectively, related to a
    non-cash acquisition fair value inventory charge.
(f) Depreciation and amortization excludes amortization of debt issuance


IDEX Corporation
Investor Contact:
Heath Mitts
Vice President – Chief Financial Officer
(847) 498-7070
Press spacebar to pause and continue. Press esc to stop.