Attachment: 8-K

Document

idexlogowtaglinejul34.jpg                                

For further information:         TRADED: NYSE (IEX)                            EX-99.1                                                
Investor Contact:                
William K. Grogan                         
Senior Vice President and Chief Financial Officer                     
(847) 498-7070        

TUESDAY, OCTOBER 26, 2021

IDEX REPORTS RECORD THIRD QUARTER RESULTS

NORTHBROOK, IL, OCTOBER 26 - IDEX Corporation (NYSE: IEX) today announced its financial results for the three month period ended September 30, 2021.

Third Quarter 2021 Highlights
•Record orders of $774.2 million up 36 percent overall and 28 percent organically compared to Q3 2020
•Record sales of $712.0 million up 23 percent overall and 15 percent organically compared to Q3 2020
• Reported operating margin was 22.6 percent with adjusted operating margin of 24.3 percent
• Record reported EPS was $1.51 with record adjusted EPS of $1.63
•Full year adjusted EPS guidance narrowed to $6.30 to $6.33 compared to prior guidance of $6.26 to $6.36

Third Quarter 2021
Orders of $774.2 million were up 36 percent compared with the prior year period (+28 percent organic, +7 percent acquisitions/divestitures and +1 percent foreign currency translation).

Sales of $712.0 million were up 23 percent compared with the prior year period (+15 percent organic, +7 percent acquisitions/divestitures and +1 percent foreign currency translation).
Gross margin of 43.8 percent was up 50 basis points compared with the prior year period primarily as a result of higher volume and price capture, partially offset by inflation and supply chain constraints. Adjusted gross margin, which excludes a $9.1 million pre-tax fair value inventory step-up charge related to the Airtech acquisition, was 45.0 percent, up 170 basis points compared with the adjusted prior year period.

Operating income of $161.2 million resulted in an operating margin of 22.6 percent, which was flat compared with the prior year period. Adjusted operating income, which primarily excluded a $9.1 million pre-tax fair value inventory step-up charge and $3.2 million of restructuring expenses and asset impairments, was $173.1 million with an adjusted operating margin of 24.3 percent, up 120 basis points compared with the adjusted prior year period.

Provision for income taxes of $35.3 million in the third quarter of 2021 resulted in an effective tax rate (ETR) of 23.4 percent, which was higher than the prior year period ETR of 14.4 percent primarily due to the finalization of tax regulations enacted in the third quarter of 2020 as well as a decrease in the excess tax benefit related to share-based compensation in the current period.

Net income attributable to IDEX was $115.7 million, which resulted in EPS attributable to IDEX of $1.51. Adjusted EPS attributable to IDEX was $1.63, an increase of 23 cents, or 16.4 percent, from the adjusted prior year period and excluded the impacts of the fair value inventory step-up charge and restructuring expenses and asset impairments discussed above, both net of related tax benefits. EBITDA of $187.5 million was 26.3 percent of sales and covered interest expense by almost 20 times. Adjusted EBITDA of $199.4 million was 28.0 percent of sales and covered interest expense by 21 times.



Cash from operations of $156.6 million was up 2 percent from the prior year period primarily due to higher earnings, partially offset by changes in working capital and was 135 percent of net income attributable to IDEX. Free cash flow of $141.7 million was up 5 percent from the prior year period and was 113 percent of adjusted net income attributable to IDEX.

“IDEX teams continued to navigate a tremendously challenging supply chain environment and achieved strong operating results in the third quarter. We saw broad-based strength across our portfolio, resulting in record orders and sales of $774 million and $712 million, respectively. Today's global challenges will increasingly drive growth towards problem solvers like IDEX, but in the short term, our focus remains on overcoming the macro constraints that inhibit customer satisfaction while staying committed to investments needed to thrive in the future.
Our 80/20 principles serve us well by providing a framework to identify how to best support our customers in a difficult environment. I want to thank all IDEX team members across the globe who have tirelessly worked through these challenges and contributed to our success.
Our price capture continues to outpace material inflation and drive sequential improvements in gross margin. Despite targeted increases in discretionary costs and continued investment in the business, we achieved solid flow through, resulting in an adjusted operating margin of 24.3 percent and a record adjusted EPS of $1.63.
The acquisitions we made in the first half of the year are performing extremely well. ABEL Pumps is fully integrated and performing above expectations. Airtech is ahead of our integration timeline and is delivering on its growth potential. Our expanded corporate strategy and development team continues to actively work our M&A funnel as we look to deploy more capital. The balance sheet remains strong, with ample capital to support organic investments in business innovations and strategic M&A.
As we look to the fourth quarter, we expect organic sales growth of 9 to 10 percent with EPS in the range of $1.55 to $1.58. This assumes similar output to our third quarter results, coupled with a step up in targeted investments and the potential for year-end logistics challenges. For the full year, we are maintaining our projection of 11 to 12 percent organic sales growth and narrowing our adjusted EPS range to $6.30 to $6.33.”
Eric D. Ashleman
Chief Executive Officer and President

Third Quarter 2021 Segment Highlights

Fluid & Metering Technologies
•Sales of $251.3 million reflected a 14 percent increase compared to the third quarter of 2020 (+7 percent organic, +6 percent acquisitions and +1 percent foreign currency translation).
•Operating income of $69.0 million resulted in an operating margin of 27.5 percent, which was up 100 basis points compared with the prior year period primarily due to higher volume, price capture and favorable mix, partially offset by inflation, supply chain constraints and targeted increases in discretionary spending. Adjusted operating income, which excludes $2.0 million of restructuring expenses and asset impairments, was $71.0 million with an adjusted operating margin of 28.2 percent, a 150 basis point increase compared to the prior year period.
•EBITDA of $76.4 million resulted in an EBITDA margin of 30.4 percent. Adjusted EBITDA of $78.3 million resulted in an adjusted EBITDA margin of 31.2 percent, a 90 basis point increase compared to the prior year period.

Health & Science Technologies
•Sales of $302.3 million reflected a 37 percent increase compared to the third quarter of 2020 (+24 percent organic, +12 percent acquisitions/divestitures and +1 percent foreign currency translation).


•Operating income of $70.4 million resulted in an operating margin of 23.3 percent, which was up 70 basis points compared with the prior year period primarily due to higher volume, price capture and favorable mix, partially offset by inflation, supply chain constraints, targeted increases in discretionary spending and the fair value inventory step-up charge related to the Airtech acquisition. Adjusted operating income, which excludes a $9.1 million pre-tax fair value inventory step-up charge related to the Airtech acquisition and $0.6 million of restructuring expenses and asset impairments, was $80.1 million with an adjusted operating margin of 26.5 percent, a 340 basis point increase compared to the prior year period.
•EBITDA of $85.9 million resulted in an EBITDA margin of 28.4 percent. Adjusted EBITDA of $95.7 million resulted in an adjusted EBITDA margin of 31.6 percent, a 390 basis point increase compared to the prior year period.

Fire & Safety/Diversified Products
•Sales of $159.1 million reflected a 13 percent increase compared to the third quarter of 2020 (+12 percent organic and +1 percent foreign currency translation).
•Operating income of $39.1 million resulted in an operating margin of 24.6 percent, which was down 170 basis points compared with the prior year period primarily as a result of inflation, supply chain constraints and targeted increases in discretionary spending. Price capture and volume leverage offsets faced stronger headwinds within the segment due to higher direct OEM exposure and higher levels of material intensity due to vertical integration. Adjusted operating income was $39.1 million with an adjusted operating margin of 24.6 percent, a 260 basis point decrease compared to the prior year period.
•EBITDA of $42.9 million resulted in an EBITDA margin of 26.9 percent. Adjusted EBITDA of $42.8 million resulted in an adjusted EBITDA margin of 26.9 percent, a 280 basis point decrease compared to the prior year period.

Corporate Costs
Corporate costs increased to $17.3 million in the third quarter of 2021 from $14.2 million in the third quarter of 2020 primarily as a result of higher variable compensation and employee-related costs.






Non-GAAP Measures of Financial Performance
The Company prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). The Company supplements certain GAAP financial performance metrics with non-GAAP financial performance metrics. Management believes these non-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 fair value inventory step-up charges, restructuring expenses and asset impairments, the loss on early debt redemption, the noncash loss related to the termination of the U.S. pension plan and the impact of the settlement for a Corporate transaction indemnity. Reconciliations of non-GAAP financial performance metrics to their most comparable 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 GAAP. The Company does not provide forward-looking guidance for EPS on a GAAP basis because it is unable to predict certain items contained in the GAAP measure without unreasonable efforts. These items may include restructuring expenses and asset impairments, special tax items, acquisition-related transaction costs and certain other unusual adjustments. There were no adjustments to 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 plus the impact of the settlement for a Corporate transaction indemnity.
•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 plus the impact of the settlement for a Corporate transaction indemnity plus the loss on early debt redemption plus the noncash loss related to the termination of the U.S. pension plan, 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 plus the impact of the settlement for a Corporate transaction indemnity plus the loss on early debt redemption plus the noncash loss related to the termination of the U.S. pension plan.
•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 September 30, 2021Nine Months Ended September 30, 2021
FMTHSTFSDPIDEXFMTHSTFSDPIDEX
Change in net sales14 %37 %13 %23 %12 %25 %16 %18 %
 - Net impact from acquisitions/divestitures6 %12 %— %7 %4 %4 %— %3 %
 - Impact from foreign currency1 %1 %1 %1 %2 %3 %3 %3 %
Change in organic net sales7 %24 %12 %15 %6 %18 %13 %12 %


Table 2: Reconciliations of Reported-to-Adjusted Gross Profit and Margin (dollars in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Gross profit$311,569 $251,500 $910,264 $758,256 
+ Fair value inventory step-up charges9,100 — 11,586 4,107 
Adjusted gross profit$320,669 $251,500 $921,850 $762,363 
Net sales$712,019 $581,113 $2,050,002 $1,736,824 
Gross margin43.8 %43.3 %44.4 %43.7 %
Adjusted gross margin45.0 %43.3 %45.0 %43.9 %




Table 3: Reconciliations of Reported-to-Adjusted Operating Income and Margin (dollars in thousands)
Three Months Ended September 30,
20212020
FMTHSTFSDPCorporateIDEXFMTHSTFSDPCorporateIDEX
Reported operating income (loss)$69,020$70,374$39,126$(17,335)$161,185$58,402 $49,912 $37,103 $(14,204)$131,213
 + Restructuring expenses and asset impairments1,934626(55)6993,204585 978 1,249 1052,917 
 + Fair value inventory step-up charges— 9,100— —9,100— — — —— 
 + Corporate transaction indemnity— — — (400)(400)— — — —— 
Adjusted operating income (loss)$70,954$80,100$39,071$(17,036)$173,089$58,987$50,890$38,352$(14,099)$134,130
Net sales (eliminations)$251,297$302,287$159,106$(671)$712,019$220,747$220,378$140,896$(908)$581,113
Reported operating margin27.5 %23.3 %24.6 %n/m22.6 %26.5 %22.6 %26.3 %n/m22.6 %
Adjusted operating margin28.2 %26.5 %24.6 %n/m24.3 %26.7 %23.1 %27.2 %n/m23.1 %
Nine Months Ended September 30,
20212020
FMTHSTFSDPCorporateIDEXFMTHSTFSDPCorporateIDEX
Reported operating income (loss)$195,384$212,987$126,483$(59,866)$474,988$176,111 $150,562 $103,977 $(48,902)$381,748 
 + Restructuring expenses and asset impairments4,787 1,693 161 1,927 8,5682,433 2,162 1,890 273 6,758 
 + Fair value inventory step-up charges2,486 9,100 — — 11,5864,107 — — — 4,107 
+ Corporate transaction indemnity— — — 3,500 3,500— — — — — 
Adjusted operating income (loss)$202,657$223,780$126,644$(54,439)$498,642$182,651$152,724$105,867$(48,629)$392,613
Net sales (eliminations)$745,939$827,668$479,402$(3,007)$2,050,002$666,720$660,105$412,296$(2,297)$1,736,824
Reported operating margin26.2 %25.7 %26.4 %n/m23.2 %26.4 %22.8 %25.2 %n/m22.0 %
Adjusted operating margin27.2 %27.0 %26.4 %n/m24.3 %27.4 %23.1 %25.7 %n/m22.6 %







Table 4: Reconciliations of Reported-to-Adjusted Net Income and EPS (in thousands, except EPS)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Reported net income attributable to IDEX$115,742 $103,848 $330,645 $276,710 
 + Restructuring expenses and asset impairments3,204 2,917 8,568 6,758 
 + Tax impact on restructuring expenses and asset impairments(771)(703)(2,060)(1,540)
 + Fair value inventory step-up charges9,100 — 11,586 4,107 
 + Tax impact on fair value inventory step-up charges(1,961)— (2,707)(932)
 + Loss on early debt redemption— — 8,561 8,421 
 + Tax impact on loss on early debt redemption— — (1,841)(1,912)
 + Termination of the U.S. pension plan— — 9,688 — 
 + Tax impact on termination of the U.S. pension plan— — (2,083)— 
 + Corporate transaction indemnity(400)— 3,500 — 
 + Tax impact on Corporate transaction indemnity85 — (754)— 
Adjusted net income attributable to IDEX$124,999 $106,062 $363,103 $291,612 
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Reported diluted EPS attributable to IDEX$1.51 $1.37 $4.33 $3.64 
 + Restructuring expenses and asset impairments0.04 0.04 0.11 0.09 
 + Tax impact on restructuring expenses and asset impairments(0.01)(0.01)(0.03)(0.02)
 + Fair value inventory step-up charges0.12 — 0.15 0.05 
 + Tax impact on fair value inventory step-up charges(0.03)— (0.04)(0.01)
 + Loss on early debt redemption— — 0.11 0.11 
 + Tax impact on loss on early debt redemption— — (0.02)(0.02)
 + Termination of the U.S. pension plan— — 0.13 — 
 + Tax impact on termination of the U.S. pension plan— — (0.03)— 
 + Corporate transaction indemnity— — 0.05 — 
 + Tax impact on Corporate transaction indemnity— — (0.01)— 
Adjusted diluted EPS attributable to IDEX$1.63 $1.40 $4.75 $3.84 
Diluted weighted average shares outstanding76,452 75,960 76,408 76,119 






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

Three Months Ended September 30,
20212020
FMTHSTFSDPCorporateIDEXFMTHSTFSDPCorporateIDEX
Reported operating income (loss)$69,020$70,374$39,126$(17,335)$161,185$58,402$49,912$37,103$(14,204)$131,213
 - Other expense (income) - net384(236)50432630(719)(32)340 (293)(704)
 + Depreciation and amortization7,73715,3353,78711026,9697,16310,2303,85410421,351
EBITDA76,37385,94542,863(17,657)187,52466,28460,17440,617(13,807)153,268
 - Interest expense9,49810,642
 - Provision for income taxes35,34317,427
 - Depreciation and amortization26,96921,351
Reported net income$115,714$103,848
Net sales (eliminations)$251,297$302,287$159,106$(671)$712,019$220,747$220,378$140,896$(908)$581,113
Reported operating margin27.5 %23.3 %24.6 %n/m22.6 %26.5 %22.6 %26.3 %n/m22.6 %
EBITDA margin30.4 %28.4 %26.9 %n/m26.3 %30.0 %27.3 %28.8 %n/m26.4 %
EBITDA interest coverage19.714.4
Nine Months Ended September 30,
20212020
FMTHSTFSDPCorporateIDEXFMTHSTFSDPCorporateIDEX
Reported operating income (loss)$195,384$212,987$126,483$(59,866)$474,988$176,111$150,562$103,977$(48,902)$381,748
 - Other expense (income) - net5,968(290)1,8339,44616,957(35)(91)148 7,2997,321
 + Depreciation and amortization22,74338,38211,51032772,96219,37030,80611,40938961,974
EBITDA212,159251,659136,160(68,985)530,993195,516181,459115,238(55,812)436,401
 - Interest expense31,47933,958
 - Provision for income taxes95,98763,759
 - Depreciation and amortization72,96261,974
Reported net income$330,565$276,710
Net sales (eliminations)$745,939$827,668$479,402$(3,007)$2,050,002$666,720$660,105$412,296$(2,297)$1,736,824
Reported operating margin26.2 %25.7 %26.4 %n/m23.2 %26.4 %22.8 %25.2 %n/m22.0 %
EBITDA margin28.4 %30.4 %28.4 %n/m25.9 %29.3 %27.5 %28.0 %n/m25.1 %
EBITDA interest coverage16.912.9


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

Three Months Ended September 30,
20212020
FMTHSTFSDPCorporateIDEXFMTHSTFSDPCorporateIDEX
EBITDA(1)
$76,373$85,945$42,863$(17,657)$187,524$66,284$60,174$40,617$(13,807)$153,268
 + Restructuring expenses and asset impairments1,934626(55)6993,2045859781,2491052,917
 + Fair value inventory step-up charges—9,100——9,100—————
 + Corporate transaction indemnity———(400)(400)—————
Adjusted EBITDA$78,307$95,671$42,808$(17,358)$199,428$66,869$61,152$41,866$(13,702)$156,185
Adjusted EBITDA margin31.2 %31.6 %26.9 %n/m28.0 %30.3 %27.7 %29.7 %n/m26.9 %
Adjusted EBITDA interest coverage21.014.7
Nine Months Ended September 30,
20212020
FMTHSTFSDPCorporateIDEXFMTHSTFSDPCorporateIDEX
EBITDA(1)
$212,159$251,659$136,160$(68,985)$530,993$195,516$181,459$115,238$(55,812)$436,401
 + Restructuring expenses and asset impairments4,7871,6931611,9278,5682,4332,1621,8902736,758
 + Fair value inventory step-up charges2,4869,100——11,5864,107———4,107
 + Loss on early debt redemption———8,5618,561———8,4218,421
 + Termination of the U.S. pension plan6,293—1,7821,6139,688—————
 + Corporate transaction indemnity———3,5003,500—————
Adjusted EBITDA$225,725$262,452$138,103$(53,384)$572,896$202,056$183,621$117,128$(47,118)$455,687
Adjusted EBITDA margin30.3 %31.7 %28.8 %n/m27.9 %30.3 %27.8 %28.4 %n/m26.2 %
Adjusted EBITDA interest coverage18.213.4

(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 EndedNine Months Ended
September 30,June 30,September 30,
20212020202120212020
Cash flows from operating activities$156,633 $153,686 $136,272 $402,229 $407,899 
 - Capital expenditures14,894 18,353 15,984 45,487 39,438 
Free cash flow$141,739 $135,333 $120,288 $356,742 $368,461 




Conference Call to be Broadcast over the Internet
IDEX will broadcast its third quarter earnings conference call over the Internet on Wednesday, October 27, 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 #13712091.

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 and expected earnings per share, and the assumptions underlying these expectations, plant and equipment capacity for future growth, anticipated future acquisition behavior, availability of cash and financing alternatives and the anticipated benefits of the Company’s acquisitions of ABEL Pumps and Airtech, 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 (including the emergence of variant strains) 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; 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; supply chain backlogs, including risks affecting component availability, labor inefficiencies, and freight logistical challenges; 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 IDEX Health & Science team. Founded in 1988 with three small, entrepreneurial manufacturing companies, we’re proud to say that we now call over 40 diverse businesses around the world part of the IDEX family. With more than 7,000 employees and manufacturing operations in more than 20 countries,


IDEX is a high-performing, global company with nearly $2.5 billion in sales, 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 September 30,Nine Months Ended September 30,
2021202020212020
Net sales$712,019 $581,113 $2,050,002 $1,736,824 
Cost of sales400,450 329,613 1,139,738 978,568 
Gross profit311,569 251,500 910,264 758,256 
Selling, general and administrative expenses147,180 117,370 426,708 369,750 
Restructuring expenses and asset impairments3,204 2,917 8,568 6,758 
Operating income161,185 131,213 474,988 381,748 
Other expense (income) - net630 (704)16,957 7,321 
Interest expense9,498 10,642 31,479 33,958 
Income before income taxes151,057 121,275 426,552 340,469 
Provision for income taxes35,343 17,427 95,987 63,759 
Net income$115,714 $103,848 $330,565 $276,710 
Net loss attributable to noncontrolling interest28 — 80 — 
Net income attributable to IDEX$115,742 $103,848 $330,645 $276,710 
Earnings per Common Share:
Basic earnings per common share attributable to IDEX$1.52 $1.38 $4.35 $3.66 
Diluted earnings per common share attributable to IDEX$1.51 $1.37 $4.33 $3.64 
Share Data:
Basic weighted average common shares outstanding76,010 75,352 75,957 75,423 
Diluted weighted average common shares outstanding76,452 75,960 76,408 76,119 


IDEX CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, 2021December 31, 2020
Assets
Current assets
Cash and cash equivalents$806,497 $1,025,851 
Receivables - net366,779 293,146 
Inventories353,924 289,910 
Other current assets56,161 48,324 
Total current assets1,583,361 1,657,231 
Property, plant and equipment - net314,631 298,273 
Goodwill and intangible assets2,810,450 2,311,137 
Other noncurrent assets146,137 147,757 
Total assets$4,854,579 $4,414,398 
Liabilities and equity
Current liabilities
Trade accounts payable$175,864 $151,993 
Accrued expenses252,092 208,828 
Short-term borrowings35 88 
Dividends payable41,117 38,149 
Total current liabilities469,108 399,058 
Long-term borrowings1,190,078 1,044,354 
Other noncurrent liabilities469,110 430,660 
Total liabilities2,128,296 1,874,072 
Shareholders' equity2,726,245 2,540,203 
Noncontrolling interest38 123 
Total equity2,726,283 2,540,326 
Total liabilities and equity$4,854,579 $4,414,398 


IDEX CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended September 30,
20212020
Cash flows from operating activities
Net income$330,565 $276,710 
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments815 85 
Depreciation and amortization32,281 30,851 
Amortization of intangible assets40,681 31,123 
Amortization of debt issuance expenses1,354 1,351 
Share-based compensation expense18,575 21,155 
Deferred income taxes(7,070)1,323 
Non-cash interest expense associated with forward starting swaps3,275 5,153 
Termination of the U.S. pension plan9,688 — 
Changes in (net of the effect from acquisitions/divestitures):
Receivables(59,249)33,291 
Inventories(28,072)17,920 
Other current assets6,041 (27,655)
Trade accounts payable20,962 (11,496)
Deferred revenue14,817 27,179 
Accrued expenses17,595 125 
Other - net(29)784 
Net cash flows provided by operating activities402,229 407,899 
Cash flows from investing activities
Purchases of property, plant and equipment(45,487)(39,438)
Acquisition of businesses, net of cash acquired(575,606)(118,159)
Note receivable from collaborative partner(4,200)— 
Proceeds from disposal of fixed assets250 2,230 
Other - net874 (238)
Net cash flows used in investing activities(624,169)(155,605)
Cash flows from financing activities
Borrowings under revolving credit facilities— 150,000 
Proceeds from issuance of 3.00% Senior Notes — 499,100 
Proceeds from issuance of 2.625% Senior Notes499,380 — 
Payment of 4.50% Senior Notes— (300,000)
Payment of 4.20% Senior Notes(350,000)— 
Payments under revolving credit facilities — (150,000)
Payment of make-whole redemption premium(6,659)(6,756)
Debt issuance costs(4,626)(4,741)
Dividends paid(120,289)(114,248)
Proceeds from stock option exercises12,497 28,729 
Repurchases of common stock— (110,342)
Shares surrendered for tax withholding(5,680)(12,198)
Other - net(74)(352)
Net cash flows provided by (used in) financing activities24,549 (20,808)
Effect of exchange rate changes on cash and cash equivalents(21,963)13,691 
Net (decrease) increase in cash(219,354)245,177 
Cash and cash equivalents at beginning of year1,025,851 632,581 
Cash and cash equivalents at end of period$806,497 $877,758 


IDEX CORPORATION
Company and Segment Financial Information - Reported
(dollars in thousands)
(unaudited)
 Three Months Ended
September 30, (a)
Nine Months Ended
September 30, (a)
2021202020212020
Fluid & Metering Technologies
Net sales$251,297$220,747$745,939$666,720
Operating income (b)
69,02058,402195,384176,111
Operating margin27.5 %26.5 %26.2 %26.4 %
EBITDA(c)
$76,373$66,284$212,159$195,516
EBITDA margin(c)
30.4 %30.0 %28.4 %29.3 %
Depreciation and amortization$7,737$7,163$22,743$19,370
Capital expenditures4,6442,45212,9288,774
Health & Science Technologies
Net sales$302,287$220,378$827,668$660,105
Operating income (b)
70,37449,912212,987150,562
Operating margin23.3 %22.6 %25.7 %22.8 %
EBITDA(c)
$85,945$60,174$251,659$181,459
EBITDA margin(c)
28.4 %27.3 %30.4 %27.5 %
Depreciation and amortization$15,335$10,230$38,382$30,806
Capital expenditures8,64510,55827,33920,842
Fire & Safety/Diversified Products
Net sales$159,106$140,896$479,402$412,296
Operating income (b)
39,12637,103126,483103,977
Operating margin24.6 %26.3 %26.4 %25.2 %
EBITDA(c)
$42,863$40,617$136,160$115,238
EBITDA margin(c)
26.9 %28.8 %28.4 %28.0 %
Depreciation and amortization$3,787$3,854$11,510$11,409
Capital expenditures1,3652,3404,5246,534
Corporate Office and Eliminations
Intersegment sales eliminations$(671)$(908)$(3,007)$(2,297)
Operating income (b)
(17,335)(14,204)(59,866)(48,902)
EBITDA(c)
(17,657)(13,807)(68,985)(55,812)
Depreciation and amortization (d)
110104327389
Capital expenditures2403,0036963,288
Company
Net sales$712,019$581,113$2,050,002$1,736,824
Operating income161,185131,213474,988381,748
Operating margin22.6 %22.6 %23.2 %22.0 %
EBITDA(c)
$187,524$153,268$530,993$436,401
EBITDA margin(c)
26.3 %26.4 %25.9 %25.1 %
Depreciation and amortization (d)
$26,969$21,351$72,962$61,974
Capital expenditures14,89418,35345,48739,438


IDEX CORPORATION
Company and Segment Financial Information - Adjusted
(dollars in thousands)
(unaudited)
 Three Months Ended
September 30, (a)
Nine Months Ended
September 30, (a)
2021202020212020
Fluid & Metering Technologies
Net sales$251,297$220,747$745,939$666,720
Adjusted operating income (b)(c)
70,95458,987202,657182,651
Adjusted operating margin(c)
28.2 %26.7 %27.2 %27.4 %
Adjusted EBITDA(c)
$78,307$66,869$225,725$202,056
Adjusted EBITDA margin(c)
31.2 %30.3 %30.3 %30.3 %
Depreciation and amortization$7,737$7,163$22,743$19,370
Capital expenditures4,6442,45212,9288,774
Health & Science Technologies
Net sales$302,287$220,378$827,668$660,105
Adjusted operating income (b)(c)
80,10050,890223,780152,724
Adjusted operating margin(c)
26.5 %23.1 %27.0 %23.1 %
Adjusted EBITDA(c)
$95,671$61,152$262,452$183,621
Adjusted EBITDA margin(c)
31.6 %27.7 %31.7 %27.8 %
Depreciation and amortization$15,335$10,230$38,382$30,806
Capital expenditures8,64510,55827,33920,842
Fire & Safety/Diversified Products
Net sales$159,106$140,896$479,402$412,296
Adjusted operating income (b)(c)
39,07138,352126,644105,867
Adjusted operating margin(c)
24.6 %27.2 %26.4 %25.7 %
Adjusted EBITDA(c)
$42,808$41,866$138,103$117,128
Adjusted EBITDA margin(c)
26.9 %29.7 %28.8 %28.4 %
Depreciation and amortization$3,787$3,854$11,510$11,409
Capital expenditures1,3652,3404,5246,534
Corporate Office and Eliminations
Intersegment sales eliminations$(671)$(908)$(3,007)$(2,297)
Adjusted operating income (b)(c)
(17,036)(14,099)(54,439)(48,629)
Adjusted EBITDA(c)
(17,358)(13,702)(53,384)(47,118)
Depreciation and amortization(d)
110104327389
Capital expenditures2403,0036963,288
Company
Net sales$712,019$581,113$2,050,002$1,736,824
Adjusted operating income(c)
173,089134,130498,642392,613
Adjusted operating margin(c)
24.3 %23.1 %24.3 %22.6 %
Adjusted EBITDA(c)
$199,428$156,185$572,896$455,687
Adjusted EBITDA margin(c)
28.0 %26.9 %27.9 %26.2 %
Depreciation and amortization (d)
$26,969$21,351$72,962$61,974
Capital expenditures14,89418,35345,48739,438
(a)
Three and nine month data includes the results of both the ABEL Pumps acquisition (March 2021) and the Flow MD acquisition (February 2020) in the Fluid & Metering Technologies segment and the Airtech acquisition (June 2021) in the Health & Science Technologies segment from the date of acquisition. Three and nine month data also includes the results of CiDRA Precision Services (March 2021) in the Health & Science Technologies segment through the date of disposition.
(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 and debt discounts.

q32021earningsslides_sli
1 Third Quarter 2021 Earnings October 27, 2021

 
2IDEX Proprietary & Confidential Agenda IDEX Business Update • IDEX Overview • 2021 Market Outlook Financials • Q3 Financial Performance • Q3 Adjusted Operating Income Walk 2021 Guidance IDEX Difference Update Q&A

 
3IDEX Proprietary & Confidential Replay Information • Dial toll–free: 877.660.6853 • International: 201.612.7415 • Conference ID: #13712091 • Log on to: www.idexcorp.com

 
4IDEX Proprietary & Confidential Cautionary Statement Cautionary Statement Under the Private Securities Litigation Reform Act; Non-GAAP Measures This presentation and discussion will include “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 and expected earnings per share, and the assumptions underlying these expectations, plant and equipment capacity for future growth, anticipated future acquisition behavior, availability of cash and financing alternatives and the anticipated benefits of the Company’s acquisitions of ABEL Pumps and Airtech, 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 (including the emergence of variant strains) 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; 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; supply chain backlogs, including risks affecting component availability, labor inefficiencies, and freight logistical challenges; 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 in this presentation and discussion are only made as of today’s date, 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 in this presentation and discussion. This presentation contains non-GAAP financial information. Reconciliations of non-GAAP measures are included either in this presentation or our earnings release for the three and nine-month periods ending September 30, 2021, which is available on our website.

 
5IDEX Proprietary & Confidential Business Update

 
6IDEX Proprietary & Confidential IDEX Overview Sound Execution in a Difficult Environment • Continued challenges around material availability, logistics, and staffing • 8020 drives alignment around critical customer and business priorities • Strong price capture realized and approaching historical price-cost spread Continued Robust Organic Performance • Record backlog, orders, and sales • Long-term HST investments delivering • Improving signals of industrial project return Investing Aggressively for Growth • ABEL & Airtech delivering superior results • Healthy M&A funnel supported with ~$2B of capital • Expanding resource base for best organic and inorganic initiatives

 
7IDEX Proprietary & Confidential 2021 Market Outlook FLUID & METERING TECHNOLOGY HEALTH & SCIENCE TECHNOLOGY FIRE & SAFETY / DIVERSIFIED >0% vs pre-pandemic 2021 Q3 REVENUE $251M $302M $159M % OF TOTAL 35% 43% 22% Industrial Agriculture Water Energy Chemical Semiconductor Food / Pharma Automotive Analytical Instrumentation Life Sciences Industrial Dispensing Industrial / Other Fire / Rescue Automotive <0% vs pre-pandemic

 
8IDEX Proprietary & Confidential Financials

 
9IDEX Proprietary & Confidential IDEX Q3 Financial Performance Record Q3 EPS and strong commercial performance amid supply chain challenges $1.40 $1.63 Q3 2020 2021 23.1% 24.3% Q3 2020 2021 $135 $142 Q3 2020 2021 (Dollars in millions, excl. EPS) Sales Operating Margin* Earnings Per Share* Free Cash Flow *Operating margin and EPS data adjusted for fair value inventory step-up ($9.1M in Q3 2021) and restructuring expenses ($3.2M in Q3 2021 and $2.9M in Q3 2020). Organic: 15% increase 16% increase 120 bps increase 5% increase $581 $712 Q3 2020 2021

 
10IDEX Proprietary & Confidential Q3 Adjusted Operating Income Walk Post-COVID volume rebound tempered by supply chain pressure and reinvestment (Dollars in millions) 29 10 7 8 (15) 3Q'20 Adj Op Profit Organic Flow Thru Price/ Productivity/ Inflation Mix Discretionary / Reinvestment Acq/FX 3Q'21 Adj Op Profit 134 173 Flow through @ PY GM% 43% Organic flow through ex Acq / FX 37% Total flow through 30% $ $

 
11IDEX Proprietary & Confidential 2021 Guidance Summary Q4 2021 EPS estimate range: $1.55 – $1.58 Organic revenue growth: 9% - 10% Operating margin: 23.5-24.0% Tax rate: ~23% FX impact: ~0.5% topline benefit based on September 30, 2021 FX rates Corporate costs: ~$19 million FY 2021 EPS estimate range: $6.30 – $6.33 Organic revenue growth: 11% – 12% Operating margin: ~24.0% FX impact: : ~1.5% topline benefit based on September 30, 2021 FX rates Other modeling items: •Tax rate: ~23% •Cap Ex: $65M+ •Free cash flow expected to be approximately 105% of adjusted net income •Corporate costs: $73 million •EPS estimate excludes all future acquisitions and any future restructuring expenses

 
12IDEX Proprietary & Confidential IDEX Difference Update National Association of Corporate Directors (NACD) Names IDEX Non-Executive Chairman Bill Cook “Public Company Director of the Year” Employee Engagement Remains Strong Amid Challenges • Maintained Top Quartile results among manufacturing companies • Achieved despite tremendous disruptions – from Supply Chain to COVID • Survey Conducted September 2021 – 85% participation worldwide IDEX Foundation Enters National Partnership With Boys & Girls Clubs of America • Expands opportunities for U.S. business units to volunteer in their local communities • Aligns with IDEX Foundation adding "Equity & Opportunity" as pillar

 
13IDEX Proprietary & Confidential Appendix

 
14IDEX Proprietary & Confidential Fluid & Metering Technologies $223 $286 Q3 2020 2021 $221 $251 Q3 2020 2021 Q3 Highlights:  Industrial day rates improved vs last quarter  Agriculture remains at record levels  Energy and Chemical markets continue to lag due to lack of investment in large projects  Water platform stable in the muni market and winning in Semiconductor applications Volume and price capture partly offset by supply chain impacts and reinvestment 150 bps increase (Dollars in millions) Orders Sales Operating Margin* Q3 Sales Mix: Organic 7% Acquisition 6% FX 1% Reported Sales 14% *Operating margin adjusted for restructuring expenses ($1.9M in Q3 2021 and $0.6M in Q3 2020). Organic: 24% increase Organic: 7% increase 26.7% 28.2% Q3 2020 2021

 
15IDEX Proprietary & Confidential Health & Science Technologies Q3 Highlights:  Scientific Fluidics & Optics driven by AI and Life Sciences growth  Sealing Solutions saw continued strengthening in the Semiconductor market  MPT experiencing continued wins in Food and Pharma markets  Gast industrial performing above 2019 levels Strong volume growth & margin expansion across all platforms in the segment $209 $331 Q3 2020 2021 $220 $302 Q3 2020 2021 Organic: 44% increase 340 bps increase (Dollars in millions) Orders Sales Operating Margin* *Operating margin adjusted for restructuring expenses ($0.6M in Q3 2021 and $1.0M in Q3 2020) and inventory step-up charge of $9.1M in Q3 2021. Organic: 24% increase 23.1% 26.5% Q3 2020 2021 Q3 Sales Mix: Organic 24% Acquisition 12% FX 1% Reported Sales 37%

 
16IDEX Proprietary & Confidential Fire & Safety / Diversified Products Q3 Highlights:  Fire & Rescue rebound continues to lag due to supply chain driven large tender delays  Band-IT Industrial recovery muted by Auto shutdowns  Dispensing strong demand within paint markets globally  Price capture and volume leverage offset with stronger headwinds across the segment due to higher direct OEM exposure and higher levels of material intensity Supply chain and inflation more than offsetting volume and price $140 $158 Q3 2020 2021 $141 $159 Q3 2020 2021 Q3 Sales Mix: Organic 12% FX 1% Reported Sales 13% (Dollars in millions) Orders Sales Operating Margin* *Operating margin adjusted for restructuring expenses (($0.1M) in Q3 2021 and $1.2M in Q3 2020). Organic: 12% increase Organic: 12% increase 260 bps decrease 27.2% 24.6% Q3 2020 2021

 
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