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IDEX Reports Record Third Quarter Results - EPS of 78 Cents and Free Cash Flow of $113 Million



  IDEX Reports Record Third Quarter Results - EPS of 78 Cents and Free Cash
  Flow of $113 Million

Business Wire

LAKE FOREST, Ill. -- October 21, 2013

IDEX Corporation (NYSE: IEX) today announced its financial results for the
three month period ended September 30, 2013.

Orders in the quarter of $532 million were up 14 percent from the prior year
period. Sales in the quarter totaled $491 million, 2 percent higher than the
prior year period. For the quarter, on an organic basis, orders were 13
percent higher and sales were 1 percent higher than the prior year period.
Orders benefitted from a large dispensing equipment order received in the
quarter.

Third quarter 2013 operating income was $97 million. This resulted in an
operating margin of 19.8 percent, up 150 basis points from the prior year
adjusted operating margin, primarily due to productivity and benefits from our
structural cost actions taken in the prior year.

Third quarter net income was $64 million, an increase of 16 percent from the
adjusted prior year. Third quarter earnings per share were 78 cents, an
increase of 12 cents, or 18 percent, from the adjusted prior year. Third
quarter net income and earnings per share include $2.1 million of tax benefits
realized in the quarter.

Free cash flow was $113 million for the quarter, a 23 percent increase from
prior year third quarter due to higher earnings and improved operating working
capital.

Third Quarter Highlights

  * Orders of $532 million increased 14 percent compared to the prior year
    (+13 percent organic and +1 percent acquisition).
  * Sales of $491 million increased 2 percent compared to the prior year (+1
    percent organic and +1 percent acquisition).
  * Gross margin of 43.1 percent was up 250 basis points from the prior year.
  * Operating margin of 19.8 percent was up 150 basis points from the adjusted
    prior year.
  * Net income of $64 million represents an increase of 16 percent compared to
    the prior year adjusted net income of $55 million.
  * EPS of 78 cents was 12 cents, or 18 percent, higher than the prior year
    adjusted EPS of 66 cents.
  * EBITDA of $117 million, which represents a 17 percent increase from the
    prior year, was 24 percent of sales and covered interest expense by 11
    times.
  * Free cash flow of $113 million, which represents a 23 percent increase
    from the prior year, was over 175 percent of net income.
  * In the third quarter, the Company completed the repurchase of 881 thousand
    shares of common stock for $53 million. Year-to-date, the Company has
    repurchased over 2.5 million shares of common stock for $138 million.

“Order growth of 14 percent built a healthy backlog and positions us well for
the balance of the year and start of 2014. Five points of the order growth was
from a large dispensing equipment order which is scheduled to ship primarily
during the first half of 2014. Free cash flow in the third quarter of $113
million brings our year-to-date total to $284 million, both IDEX records.

Earlier this year I outlined a goal of driving productivity to deliver strong
margins, earnings, and cash flows, while providing resources to invest in
organic growth. I am pleased with our progress. In the third quarter, despite
continued volatility across the global markets, our strong execution resulted
in solid margin expansion and cash flow generation. Our ability to convert
cash fuels our capital deployment strategy. We have continued our disciplined
approach, focusing on a combination of funding organic growth, strategic
acquisitions, shareholder dividends and share repurchases. Throughout the year
we have invested significantly in commercial and new product initiatives. We
have also returned $192 million of capital to shareholders in dividends and
share repurchases, and we continue to maintain a steady funnel of active M&A
opportunities. As we make our key investment decisions, we will maintain our
focused strategy and our commitment to deliver attractive financial returns.

For the foreseeable future, we expect the global end markets to remain uneven.
However, our ability to execute in this environment should generate organic
revenue growth of approximately 5 percent in the fourth quarter. We are
projecting fourth quarter 2013 EPS to be in the range of 78 to 80 cents. We
are also increasing our full year 2013 EPS guidance to $3.05 – $3.07 and
estimate free cash flow conversion will be approximately 145 to 150 percent of
net income for the full year 2013.”

Andrew K. Silvernail
Chairman and Chief Executive Officer

Third Quarter 2013 Business Highlights (Operating margin excludes
restructuring charges in 2012)

Fluid & Metering Technologies

  * Sales in the third quarter of $212 million reflected a 7 percent increase
    compared to the third quarter of 2012 (+6 percent organic and +1 percent
    foreign currency translation).
  * Operating margin of 24.4 percent represented a 300 basis point improvement
    compared with the third quarter of 2012 primarily due to higher volume and
    productivity initiatives.

Health & Science Technologies

  * Sales in the third quarter of $179 million reflected a 1 percent increase
    compared to the third quarter of 2012 (-2 percent organic, +4 percent
    acquisitions and -1 percent foreign currency translation).
  * Operating margin of 20.6 percent represented a 330 basis point increase
    compared with the third quarter of 2012 primarily due to productivity and
    cost reduction initiatives.

Fire & Safety/Diversified Products

  * Sales in the third quarter of $101 million reflected a 6 percent decrease
    compared to the third quarter of 2012 (-7 percent organic and +1 percent
    foreign currency translation).
  * Operating margin of 21.9 percent represented a 290 basis point decrease
    compared with the third quarter of 2012 primarily due to lower volume and
    unfavorable product mix across the segment.

For the third quarter of 2013, Fluid & Metering Technologies contributed 43
percent of sales and 47 percent of operating income; Health & Science
Technologies accounted for 36 percent of sales and 33 percent of operating
income; and Fire & Safety/Diversified Products represented 21 percent of sales
and 20 percent of operating income.

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 (dollars in millions)

                       
                        For the Quarter Ended
                        September 30,                       June 30,
                        2013        2012        Change      2013        Change
Income before Taxes     $ 86.6      $ 70.2      23   %      $ 88.4      (2  %)
Depreciation and          19.8        19.5      2    %        20.1      (1  %)
Amortization
Interest Expense          10.6        10.5      1    %        10.6      -
EBITDA                    117.0       100.2     17   %        119.1     (2  %)
Restructuring             -           7.1       (100 %)       -         -
Charge
Adjusted EBITDA         $ 117.0     $ 107.3     9    %      $ 119.1     (2  %)
                                                                         
Cash Flow from
Operating               $ 118.4     $ 101.0     17   %      $ 109.3     8   %
Activities
Capital                   (7.3  )     (9.4  )   (22  %)       (8.2  )   (11 %)
Expenditures
Excess Tax Benefit
from Stock-Based          2.1         0.8       n/m           2.3       (9  %)
Compensation
Free Cash Flow          $ 113.2     $ 92.4      23   %      $ 103.4     9   %
                                                                             

Conference Call to be Broadcast over the Internet

IDEX will broadcast its third quarter earnings conference call over the
Internet on Tuesday, October 22, 2013 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 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
855.859.2056 (or 404.537.3406 for international participants) using the ID #
26074681.

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 www.idexcorp.com.

                               (Tables follow)

 
IDEX CORPORATION
Condensed Statements of Consolidated Operations
(in thousands except per share amounts)
(unaudited)
                                                                
                                                                  
                 Three Months Ended            Nine Months Ended
                 September 30,                 September 30,
                 2013          2012            2013              2012
                                                                  
Net sales        $ 490,617     $ 479,859       $ 1,503,510       $ 1,463,420
Cost of sales      279,108       285,019         857,155           862,578    
Gross profit       211,509       194,840         646,355           600,842
Selling, general
and                114,140       107,167         354,715           332,431
administrative
expenses
Restructuring      -             7,085           -                 14,604     
expenses
Operating income   97,369        80,588          291,640           253,807
Other (income)     188           (132    )       (518      )       (19       )
expense - net
Interest expense   10,570        10,536          31,724            31,734     
Income before      86,611        70,184          260,434           222,092
income taxes
Provision for      22,812        20,057          72,774            65,443     
income taxes
Net income       $ 63,799      $ 50,127        $ 187,660         $ 156,649    
                                                                  
                                                                  
Earnings per
Common Share:
Basic earnings
per common share $ 0.78        $ 0.60          $ 2.28            $ 1.88
^(a)
Diluted earnings
per common share $ 0.78        $ 0.60          $ 2.27            $ 1.87
^(a)
                                                                  
                                                                  
Share Data:
                                                                  
Basic weighted
average common     81,259        82,482          81,762            82,820
shares
outstanding
                                                                  
Diluted weighted
average common     82,218        83,370          82,701            83,785
shares
outstanding
                                                                  
                                                                  
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                               September 30,     December 31,
                                               2013              2012
                                                                  
Assets
Current assets
Cash and cash                                  $ 399,805         $ 318,864
equivalents
Receivables -                                    255,977           256,095
net
Inventories                                      236,771           234,950
Other current                                    58,216            71,956     
assets
Total current                                    950,769           881,865
assets
Property, plant
and equipment -                                  214,253           219,161
net
Goodwill and
intangible                                       1,665,576         1,663,099
assets
Other noncurrent                                 18,783            21,265     
assets
Total assets                                   $ 2,849,381       $ 2,785,390  
                                                                  
Liabilities and
shareholders'
equity
Current
liabilities
Trade accounts                                 $ 130,683         $ 117,341
payable
Accrued expenses                                 155,235           150,176
Short-term                                       4,379             7,335
borrowings
Dividends                                        18,745            16,575     
payable
Total current                                    309,042           291,427
liabilities
Long-term                                        780,043           779,241
borrowings
Other noncurrent                                 245,772           249,724    
liabilities
Total                                            1,334,857         1,320,392
liabilities
Shareholders'                                    1,514,524         1,464,998  
equity
Total
liabilities and                                $ 2,849,381       $ 2,785,390  
shareholders'
equity
                                                                              

                                                      
IDEX CORPORATION
Company and Business Group Financial Information
(dollars in thousands)
(unaudited)
                                                                      
                                                                        
                           Three Months Ended          Nine Months Ended
                           September 30, ^(b)          September 30, ^(b)
                           2013          2012 ^(c)     2013            2012 ^(c)
                                                                        
                                                                        
      Fluid & Metering
      Technologies
      Net sales            $ 212,337     $ 198,000     $ 649,580       $ 621,433
      Operating              51,736        42,368        155,930         136,175
      income ^(c)
      Operating              24.4    %     21.4    %     24.0      %     21.9      %
      margin
      Depreciation and     $ 6,981       $ 7,246       $ 20,953        $ 22,194
      amortization
      Capital                2,843         2,702         8,126           9,752
      expenditures
                                                                        
      Health & Science
      Technologies
      Net sales            $ 178,628     $ 176,225     $ 532,363       $ 520,574
      Operating              36,775        30,480        103,564         90,494
      income ^(c)
      Operating              20.6    %     17.3    %     19.5      %     17.4      %
      margin
      Depreciation and     $ 10,798      $ 10,273      $ 32,537        $ 29,293
      amortization
      Capital                2,823         4,622         9,777           10,435
      expenditures
                                                                        
      Fire &
      Safety/Diversified
      Products
      Net sales            $ 101,077     $ 108,199     $ 326,826       $ 328,173
      Operating              22,119        26,807        74,027          78,165
      income ^(c)
      Operating              21.9    %     24.8    %     22.7      %     23.8      %
      margin
      Depreciation and     $ 1,726       $ 1,622       $ 5,175         $ 5,225
      amortization
      Capital                776           1,230         2,997           5,183
      expenditures
                                                                        
      Company
      Net sales            $ 490,617     $ 479,859     $ 1,503,510     $ 1,463,420
      Operating              97,369        87,673        291,640         268,411
      income ^(c)
      Operating              19.8    %     18.3    %     19.4      %     18.3      %
      margin
      Depreciation and     $ 19,779      $ 19,545      $ 59,695        $ 57,938
      amortization ^(d)
      Capital                7,318         9,208         23,140          27,266
      expenditures
                                                                        
                                                                        
                                                                        
(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.
                                                                        
      Three and nine month data includes acquisitions of FTL (March 2013), Matcon
(b)   (July 2012) and ERC (April 2012) in the Health & Science Technologies segment
      from the date of acquisition.
                                                                        
      Group operating income excludes unallocated corporate operating expenses while
(c)   both Group and Company operating income excludes restructuring related charges
      for 2012.
                                                                        
(d)   Depreciation and amortization excludes amortization of debt issuance expenses.

Contact:

IDEX Corporation
Investor Contact:
Heath Mitts
Vice President – Chief Financial Officer
(847) 498-7070
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