idexlogowtaglinejul22.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 23, 2018

IDEX REPORTS RECORD THIRD QUARTER RESULTS;
Q3 SALES UP 8 PERCENT OVERALL AND 9 PERCENT ORGANICALLY;
Q3 REPORTED EPS WAS $1.37 WITH ADJUSTED EPS OF $1.41

LAKE FOREST, IL, OCTOBER 23 - IDEX Corporation (NYSE: IEX) today announced its financial results for the three month period ended September 30, 2018.

Third Quarter 2018 Highlights
Orders were up 7 percent overall and 8 percent organically
Sales were up 8 percent overall and 9 percent organically
Reported operating margin was 23.3 percent with adjusted operating margin of 24.0 percent, up 200 bps
Reported EPS was $1.37 with adjusted EPS of $1.41, up 31 percent

Third Quarter 2018

Orders of $615.1 million were up 7 percent compared with the prior year period (+8 percent organic and -1 percent foreign currency translation).

Sales of $622.9 million were up 8 percent compared with the prior year period (+9 percent organic and -1 percent foreign currency translation).
  
Gross margin of 45.0 percent was up 10 basis points compared with the prior year period primarily due to productivity initiatives and volume leverage, partially offset by higher engineering costs.

Operating income of $145.1 million resulted in an operating margin of 23.3 percent. Excluding $4.6 million of restructuring expenses, adjusted operating income was $149.8 million with an adjusted operating margin of 24.0 percent, up 200 basis points compared with the prior year period primarily due to lower amortization and consulting expenses. Adjusted operating income drove adjusted EBITDA of $167.4 million which was 27 percent of sales and covered interest expense by 15 times.

Provision for income taxes of $26.9 million in the third quarter of 2018 resulted in an effective tax rate (ETR) of 20.2 percent, which was lower than the prior year period ETR of 26.4 percent primarily due to the enactment of U.S. tax reform in 2017 as well as a higher excess tax benefit from stock option exercises in the third quarter of 2018.

Net income was $106.4 million which resulted in EPS of $1.37. Excluding restructuring expenses, adjusted EPS of $1.41 increased 33 cents, or 31 percent, from prior year period EPS.

Cash from operations of $133.3 million led to free cash flow of $114.4 million, which was down 1 percent from the prior year period and 104 percent of adjusted net income. The decrease in free cash flow was primarily due to a discretionary defined benefit pension contribution of $10.3 million along with higher capital expenditures in the third quarter of 2018.






The Company repurchased 210 thousand shares of common stock for $31.2 million in the third quarter.
“Continued strength across most end markets helped produce another quarter of excellent operating results for IDEX. Overall demand remained solid which helped deliver strong organic order and sales growth of 8 percent and 9 percent, respectively, our second consecutive quarter posting these organic growth rates. FMT and FSDP both achieved double-digit organic revenue growth rates, while HST realized mid-single digit organic revenue growth. Adjusted operating margin increased 200 basis points with robust margin expansion across all three segments. Third quarter adjusted EPS of $1.41 was a record and approximately 10 cents above the midpoint of our previous guidance, 6 cents of which was operational over-performance while 4 cents was due to a lower effective tax rate compared with our prior guidance.

 
 
We remain committed to fund our most encouraging organic opportunities across the Company, which was evidenced by record capital expenditures in the third quarter. This focus on organic growth has now led to nine consecutive quarters of organic order expansion and seven consecutive quarters of organic sales growth. M&A continues to be a top priority for the Company and the acquisition funnel is healthy. With gross debt-to-EBITDA of 1.3 times, our balance sheet stands ready and is able to support our disciplined capital deployment strategy. In the quarter, we distributed $33 million in dividends to shareholders and repurchased 210 thousand shares of common stock for approximately $31 million.

 
 
Based on our strong third quarter operating results, we are raising our full year organic revenue growth expectations to approximately 8 percent, with approximately 5 to 6 percent expected in the fourth quarter. We are also increasing full year EPS guidance to $5.35 to $5.37, with fourth quarter EPS of $1.25 to $1.27. Our EPS guidance assumes a higher than expected fourth quarter tax rate of 26 percent due to potential changes in certain assumptions associated with the 2017 tax reform.”

 
 
 
Andrew K. Silvernail
 
Chairman and Chief Executive Officer

Third Quarter 2018 Segment Highlights

Fluid & Metering Technologies
Sales of $239.2 million reflected an 8 percent increase compared to the third quarter of 2017 (+12 percent organic, -3 percent divestiture and -1 percent foreign currency translation).
Operating income of $69.8 million resulted in an operating margin of 29.2 percent. Excluding $0.8 million of restructuring expenses, adjusted operating income was $70.6 million with an adjusted operating margin of 29.5 percent, a 140 basis point increase compared to the prior year period primarily due to higher volume and productivity initiatives.
EBITDA of $74.8 million resulted in an EBITDA margin of 31.3 percent. Excluding $0.8 million of restructuring expenses, adjusted EBITDA of $75.6 million resulted in an adjusted EBITDA margin of 31.6 percent, an 80 basis point increase compared to the prior year period.

Health & Science Technologies
Sales of $222.4 million reflected a 7 percent increase compared to the third quarter of 2017 (+6 percent organic, +2 percent acquisition and -1 percent foreign currency translation).
Operating income of $49.1 million resulted in an operating margin of 22.1 percent. Excluding $3.1 million of restructuring expenses, adjusted operating income was $52.2 million with an adjusted operating margin of 23.5 percent, a 130 basis point increase compared to the prior year period primarily due to higher volume and productivity initiatives.
EBITDA of $57.7 million resulted in an EBITDA margin of 26.0 percent. Excluding $3.1 million of restructuring expenses, adjusted EBITDA of $60.8 million resulted in an adjusted EBITDA margin of 27.4 percent, a 70 basis point decrease compared to the prior year period.

Fire & Safety/Diversified Products
Sales of $161.8 million reflected a 10 percent increase compared to the third quarter of 2017 (+11 percent organic and -1 percent foreign currency translation).





Operating income of $44.7 million resulted in an operating margin of 27.6 percent. Excluding $0.1 million of restructuring expenses, adjusted operating income was $44.8 million with an adjusted operating margin of 27.7 percent, a 300 basis point increase compared to the prior year period primarily due to higher volume and productivity initiatives.
EBITDA of $47.9 million resulted in an EBITDA margin of 29.6 percent. Excluding $0.1 million of restructuring expenses, adjusted EBITDA of $48.0 million resulted in an adjusted EBITDA margin of 29.7 percent, a 320 basis point increase compared to the prior year period.

For the third quarter of 2018, Fluid & Metering Technologies contributed 38 percent of sales, 43 percent of operating income and 41 percent of EBITDA; Health & Science Technologies accounted for 36 percent of sales, 30 percent of operating income and 32 percent of EBITDA; and Fire & Safety/Diversified Products represented 26 percent of sales, 27 percent of operating income and 27 percent of EBITDA.


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 in order to provide investors with better insight and increased transparency while also allowing for a more comprehensive understanding of the financial information used by management in its decision making. 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 divestiture and the impact of foreign currency translation.
Adjusted operating income is calculated as operating income plus restructuring expenses.
Adjusted operating margin is calculated as adjusted operating income divided by net sales.
Adjusted net income is calculated as net income plus restructuring expenses, net of the statutory tax expense or benefit.
EBITDA is calculated as net income plus interest expense plus provision for income taxes plus depreciation and amortization. We reconciled 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.
Adjusted EBITDA is calculated as EBITDA plus restructuring expenses.
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, 2018
 
Nine Months Ended 
 September 30, 2018
 
FMT
 
HST
 
FSDP
 
IDEX
 
FMT
 
HST
 
FSDP
 
IDEX
Change in net sales
8
 %
 
7
 %
 
10
 %
 
8
 %
 
8
 %
 
10
%
 
12
%
 
10
 %
 - Net impact from acquisitions/divestitures
(3
)%
 
2
 %
 
 %
 
 %
 
(2
)%
 
1
%
 
%
 
 %
 - Impact from FX
(1
)%
 
(1
)%
 
(1
)%
 
(1
)%
 
1
 %
 
2
%
 
3
%
 
2
 %
Change in organic net sales
12
 %
 
6
 %
 
11
 %
 
9
 %
 
9
 %
 
7
%
 
9
%
 
8
 %






Table 2: Reconciliations of Reported-to-Adjusted Operating Income and Margin (dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
2018
 
2017
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
Reported operating income (loss)
$
69,755

 
$
49,144

 
$
44,726

 
$
(18,492
)
 
$145,133
 
$
61,988

 
$
46,073

 
$
36,199

 
$
(17,756
)
 
$126,504
 + Restructuring expenses
827

 
3,116

 
60

 
618

 
4,621

 

 

 

 

 

Adjusted operating income (loss)
$
70,582

 
$
52,260

 
$
44,786

 
$
(17,874
)
 
$
149,754

 
$
61,988

 
$
46,073

 
$
36,199

 
$
(17,756
)
 
$
126,504

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales (eliminations)
$
239,213

 
$
222,426

 
$
161,832

 
$
(583
)
 
$
622,888

 
$
220,953

 
$
207,127

 
$
146,599

 
$
(189
)
 
$
574,490

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating margin
29.2
%
 
22.1
%
 
27.6
%
 
n/m

 
23.3
%
 
28.1
%
 
22.2
%
 
24.7
%
 
n/m

 
22.0
%
Adjusted operating margin
29.5
%
 
23.5
%
 
27.7
%
 
n/m

 
24.0
%
 
28.1
%
 
22.2
%
 
24.7
%
 
n/m

 
22.0
%
 
Nine Months Ended September 30,
 
2018
 
2017
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
Reported operating income (loss)
$
207,149

 
$
153,519

 
$
130,162

 
$
(61,183
)
 
$
429,647

 
$
179,830

 
$
134,605

 
$
106,022

 
$
(53,149
)
 
$
367,308

 + Restructuring expenses
1,313

 
5,298

 
427

 
1,213

 
8,251

 
1,566

 
3,028

 
73

 
130

 
4,797

Adjusted operating income (loss)
$
208,462

 
$
158,817

 
$
130,589

 
$
(59,970
)
 
$
437,898

 
$
181,396

 
$
137,633

 
$
106,095

 
$
(53,019
)
 
$
372,105

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales (eliminations)
$
714,346

 
$
670,904

 
$
485,305

 
$
(983
)
 
$
1,869,572

 
$
658,905

 
$
611,215

 
$
432,029

 
$
(741
)
 
$
1,701,408

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating margin
29.0
%
 
22.9
%
 
26.8
%
 
n/m

 
23.0
%
 
27.3
%
 
22.0
%
 
24.5
%
 
n/m

 
21.6
%
Adjusted operating margin
29.2
%
 
23.7
%
 
26.9
%
 
n/m

 
23.4
%
 
27.5
%
 
22.5
%
 
24.6
%
 
n/m

 
21.9
%

Table 3: Reconciliations of Reported-to-Adjusted Net Income and EPS (in thousands, except EPS)

 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Reported net income
$
106,352

 
$
83,768

 
$
312,436

 
$
243,511

 + Restructuring expenses
4,621

 

 
8,251

 
4,797

 + Tax impact on restructuring expenses
(1,130
)
 

 
(2,003
)
 
(1,529
)
Adjusted net income
$
109,843

 
$
83,768

 
$
318,684

 
$
246,779

 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Reported diluted EPS
$
1.37

 
$
1.08

 
$
4.02

 
$
3.15

 + Restructuring expenses
0.06

 

 
0.11

 
0.06

 + Tax impact on restructuring expenses
(0.02
)
 

 
(0.03
)
 
(0.02
)
Adjusted diluted EPS
$
1.41

 
$
1.08

 
$
4.10

 
$
3.19

 
 
 
 
 
 
 
 
Diluted weighted average shares
77,709

 
77,523

 
77,717

 
77,246







Table 4: Reconciliations of EBITDA to Net Income (dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
2018
 
2017
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
Reported operating income (loss)
$
69,755

 
$
49,144

 
$
44,726

 
$
(18,492
)
 
$
145,133

 
$
61,988

 
$
46,073

 
$
36,199

 
$
(17,756
)
 
$
126,504

 - Other (income) expense - net
411

 
780

 
342

 
(599
)
 
934

 
230

 
(970
)
 
1,044

 
1,349

 
1,653

 + Depreciation and amortization
5,500

 
9,381

 
3,541

 
184

 
18,606

 
6,192

 
11,189

 
3,709

 
190

 
21,280

EBITDA
74,844

 
57,745

 
47,925

 
(17,709
)
 
162,805

 
67,950

 
58,232

 
38,864

 
(18,915
)
 
146,131

 - Interest expense
 
 
 
 
 
 
 
 
10,958

 
 
 
 
 
 
 
 
 
11,064

 - Provision for income taxes
 
 
 
 
 
 
 
 
26,889

 
 
 
 
 
 
 
 
 
30,019

 - Depreciation and amortization
 
 
 
 
 
 
 
 
18,606

 
 
 
 
 
 
 
 
 
21,280

Reported net income
 
 
 
 
 
 
 
 
$
106,352

 
 
 
 
 
 
 
 
 
$
83,768

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales (eliminations)
$
239,213

 
$
222,426

 
$
161,832

 
$
(583
)
 
$
622,888

 
$
220,953

 
$
207,127

 
$
146,599

 
$
(189
)
 
$
574,490

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating margin
29.2
%
 
22.1
%
 
27.6
%
 
n/m

 
23.3
%
 
28.1
%
 
22.2
%
 
24.7
%
 
n/m

 
22.0
%
EBITDA margin
31.3
%
 
26.0
%
 
29.6
%
 
n/m

 
26.1
%
 
30.8
%
 
28.1
%
 
26.5
%
 
n/m

 
25.4
%
 
Nine Months Ended September 30,
 
2018
 
2017
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
Reported operating income (loss)
$
207,149

 
$
153,519

 
$
130,162

 
$
(61,183
)
 
$
429,647

 
$
179,830

 
$
134,605

 
$
106,022

 
$
(53,149
)
 
$
367,308

 - Other (income) expense - net
1,056

 
(280
)
 
(3,324
)
 
(1,017
)
 
(3,565
)
 
707

 
97

 
1,663

 
(750
)
 
1,717

 + Depreciation and amortization
16,901

 
30,860

 
10,912

 
557

 
59,230

 
17,823

 
34,447

 
10,938

 
598

 
63,806

EBITDA
222,994

 
184,659

 
144,398

 
(59,609
)
 
492,442

 
196,946

 
168,955

 
115,297

 
(51,801
)
 
429,397

 - Interest expense
 
 
 
 
 
 
 
 
33,098

 
 
 
 
 
 
 
 
 
33,920

 - Provision for income taxes
 
 
 
 
 
 
 
 
87,678

 
 
 
 
 
 
 
 
 
88,160

 - Depreciation and amortization
 
 
 
 
 
 
 
 
59,230

 
 
 
 
 
 
 
 
 
63,806

Reported net income
 
 
 
 
 
 
 
 
$
312,436

 
 
 
 
 
 
 
 
 
$
243,511

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales (eliminations)
$
714,346

 
$
670,904

 
$
485,305

 
$
(983
)
 
$
1,869,572

 
$
658,905

 
$
611,215

 
$
432,029

 
$
(741
)
 
$
1,701,408

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported operating margin
29.0
%
 
22.9
%
 
26.8
%
 
n/m

 
23.0
%
 
27.3
%
 
22.0
%
 
24.5
%
 
n/m

 
21.6
%
EBITDA margin
31.2
%
 
27.5
%
 
29.8
%
 
n/m

 
26.3
%
 
29.9
%
 
27.6
%
 
26.7
%
 
n/m

 
25.2
%

Table 5: Reconciliations of EBITDA to Adjusted EBITDA (dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
2018
 
2017
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
EBITDA
$
74,844

 
$
57,745

 
$
47,925

 
$
(17,709
)
 
$
162,805

 
$
67,950

 
$
58,232

 
$
38,864

 
$
(18,915
)
 
$
146,131

 + Restructuring expenses
827

 
3,116

 
60

 
618

 
4,621

 

 

 

 

 

Adjusted EBITDA
$
75,671

 
$
60,861

 
$
47,985

 
$
(17,091
)
 
$
167,426

 
$
67,950

 
$
58,232

 
$
38,864

 
$
(18,915
)
 
$
146,131

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA margin
31.6
%
 
27.4
%
 
29.7
%
 
n/m

 
26.9
%
 
30.8
%
 
28.1
%
 
26.5
%
 
n/m

 
25.4
%





 
Nine Months Ended September 30,
 
2018
 
2017
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
 
FMT
 
HST
 
FSDP
 
Corporate
 
IDEX
EBITDA
$
222,994

 
$
184,659

 
$
144,398

 
$
(59,609
)
 
$
492,442

 
$
196,946

 
$
168,955

 
$
115,297

 
$
(51,801
)
 
$
429,397

 + Restructuring expenses
1,313

 
5,298

 
427

 
1,213

 
8,251

 
1,566

 
3,028

 
73

 
130

 
4,797

Adjusted EBITDA
$
224,307

 
$
189,957

 
$
144,825

 
$
(58,396
)
 
$
500,693

 
$
198,512

 
$
171,983

 
$
115,370

 
$
(51,671
)
 
$
434,194

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA margin
31.4
%
 
28.3
%
 
29.8
%
 
n/m

 
26.8
%
 
30.1
%
 
28.1
%
 
26.7
%
 
n/m

 
25.5
%

Table 6: Reconciliations of Cash Flows from Operating Activities to Free Cash Flow (in thousands)
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
June 30,
 
September 30,
 
2018
 
2017
 
2018
 
2018
 
2017
Cash flows from operating activities
$
133,327

 
$
124,000

 
$
120,697

 
325,753

 
$
296,580

 - Capital expenditures
18,888

 
8,515

 
10,959

 
39,856

 
28,054

Free cash flow
$
114,439

 
$
115,485

 
$
109,738

 
$
285,897

 
$
268,526



Conference Call to be Broadcast over the Internet
IDEX will broadcast its third quarter earnings conference call over the Internet on Wednesday, October 24, 2018 at 9:30 a.m. CT. Chairman and Chief Executive Officer Andy Silvernail 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 #13675421.






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, capital expenditures, acquisitions, cost reductions, cash flow, revenues, earnings, market conditions, global economies and operating improvements, and are indicated by words or phrases such as “anticipates,” “estimates,” “plans,” “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: 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, 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 filed with the SEC and 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 is a global fluidics leader serving high growth specialized markets. We are best known for our expertise in highly engineered fluidics systems and components, as well as for our expertise in fire and safety products including the Jaws of Life® family of rescue and recovery tools. Our products touch lives every day. Whether it’s a life-saving rescue operation, dispensing fresh juice to a first grader or fueling aircraft, IDEX is a leader in creating enabling technology used in many of the most common everyday activities. For more information, please visit www.idexcorp.com. IDEX shares are traded on the New York Stock Exchange under the symbol “IEX”.
 
(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,
 
2018
 
2017
 
2018
 
2017
Net sales
$
622,888

 
$
574,490

 
$
1,869,572

 
$
1,701,408

Cost of sales
342,655

 
316,560

 
1,025,320

 
935,612

Gross profit
280,233

 
257,930

 
844,252

 
765,796

Selling, general and administrative expenses
130,479

 
131,426

 
406,354

 
393,691

Restructuring expenses
4,621

 

 
8,251

 
4,797

Operating income
145,133

 
126,504

 
429,647

 
367,308

Other (income) expense - net
934

 
1,653

 
(3,565
)
 
1,717

Interest expense
10,958

 
11,064

 
33,098

 
33,920

Income before income taxes
133,241

 
113,787

 
400,114

 
331,671

Provision for income taxes
26,889

 
30,019

 
87,678

 
88,160

Net income
$
106,352

 
$
83,768

 
$
312,436

 
$
243,511

 
 
 
 
 
 
 
 
Earnings per Common Share:
 
 
 
 
 
 
 
Basic earnings per common share
$
1.39

 
$
1.09

 
$
4.07

 
$
3.19

Diluted earnings per common share
$
1.37

 
$
1.08

 
$
4.02

 
$
3.15

 
 
 
 
 
 
 
 
Share Data:
 
 
 
 
 
 
 
Basic weighted average common shares outstanding
76,562

 
76,309

 
76,507

 
76,215

Diluted weighted average common shares outstanding
77,709

 
77,523

 
77,717

 
77,246







IDEX CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 
September 30, 
 2018
 
December 31, 
 2017
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
491,767

 
$
375,950

Receivables - net
324,895

 
294,166

Inventories
287,126

 
259,724

Other current assets
51,451

 
74,203

Total current assets
1,155,239

 
1,004,043

Property, plant and equipment - net
276,821

 
258,350

Goodwill and intangible assets
2,104,280

 
2,118,904

Other noncurrent assets
18,467

 
18,331

Total assets
$
3,554,807

 
$
3,399,628

 
 
 
 
Liabilities and shareholders' equity
 
 
 
Current liabilities
 
 
 
Trade accounts payable
$
141,178

 
$
147,067

Accrued expenses
185,453

 
184,705

Short-term borrowings
536

 
258

Dividends payable
33,046

 
28,945

Total current liabilities
360,213

 
360,975

Long-term borrowings
848,246

 
858,788

Other noncurrent liabilities
285,774

 
293,323

Total liabilities
1,494,233

 
1,513,086

Shareholders' equity
2,060,574

 
1,886,542

Total liabilities and shareholders' equity
$
3,554,807

 
$
3,399,628







IDEX CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Nine Months Ended September 30,
 
2018
 
2017
Cash flows from operating activities
 
 
 
Net income
$
312,436

 
$
243,511

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
29,725

 
28,425

Amortization of intangible assets
29,505

 
35,381

Amortization of debt issuance expenses
998

 
989

Share-based compensation expense
19,814

 
18,143

Deferred income taxes
(1,480
)
 
1,888

Non-cash interest expense associated with forward starting swaps
4,869

 
5,004

Changes in (net of the effect from acquisitions):
 
 
 
Receivables
(34,057
)
 
(28,407
)
Inventories
(27,903
)
 
(4,869
)
Other current assets
7,635

 
(15,113
)
Trade accounts payable
(4,420
)
 
3,681

Accrued expenses
33

 
9,912

Other - net
(11,402
)
 
(1,965
)
Net cash flows provided by operating activities
325,753

 
296,580

Cash flows from investing activities
 
 
 
Purchases of property, plant and equipment
(39,856
)
 
(28,054
)
Purchase of intellectual property
(4,000
)
 

Acquisition of businesses, net of cash acquired
(20,205
)
 

Proceeds from disposal of fixed assets
211

 
5,159

Other - net
(1,180
)
 
(337
)
Net cash flows used in investing activities
(65,030
)
 
(23,232
)
Cash flows from financing activities
 
 
 
Borrowings under revolving credit facilities

 
33,000

Payments under revolving credit facilities
(11,128
)
 
(181,692
)
Dividends paid
(94,913
)
 
(82,869
)
Proceeds from stock option exercises
26,793

 
18,980

Purchases of common stock
(50,654
)
 
(22,650
)
Shares surrendered for tax withholding
(11,260
)
 
(5,903
)
Settlement of foreign exchange contracts
6,593

 
4,406

Net cash flows used in financing activities
(134,569
)
 
(236,728
)
Effect of exchange rate changes on cash and cash equivalents
(10,337
)
 
30,707

Net increase (decrease) in cash
115,817

 
67,327

Cash and cash equivalents at beginning of year
375,950

 
235,964

Cash and cash equivalents at end of period
$
491,767

 
$
303,291







IDEX CORPORATION
Company and Segment Financial Information - Reported
(dollars in thousands)
(unaudited)
 
 
 Three Months Ended
September 30,
(a)
 
Nine Months Ended
September 30,
(a)
 
 
2018
 
2017
 
2018
 
2017
 
Fluid & Metering Technologies
 
 
 
 
 
 
 
 
Net sales
$
239,213

 
$
220,953

 
$
714,346

 
$
658,905

 
Operating income (b)
69,755

 
61,988

 
207,149

 
179,830

 
Operating margin
29.2
%
 
28.1
%
 
29.0
%
 
27.3
%
 
EBITDA
$
74,844

 
$
67,950

 
$
222,994

 
$
196,946

 
EBITDA margin
31.3
%
 
30.8
%
 
31.2
%
 
29.9
%
 
Depreciation and amortization
$
5,500

 
$
6,192

 
$
16,901

 
$
17,823

 
Capital expenditures
6,487

 
3,944

 
15,142

 
12,159

 
 
 
 
 
 
 
 
 
 
Health & Science Technologies
 
 
 
 
 
 
 
 
Net sales
$
222,426

 
$
207,127

 
$
670,904

 
$
611,215

 
Operating income (b)
49,144

 
46,073

 
153,519

 
134,605

 
Operating margin
22.1
%
 
22.2
%
 
22.9
%
 
22.0
%
 
EBITDA
$
57,745

 
$
58,232

 
$
184,659

 
$
168,955

 
EBITDA margin
26.0
%
 
28.1
%
 
27.5
%
 
27.6
%
 
Depreciation and amortization
$
9,381

 
$
11,189

 
$
30,860

 
$
34,447

 
Capital expenditures
8,614

 
3,015

 
17,296

 
11,489

 
 
 
 
 
 
 
 
 
 
Fire & Safety/Diversified Products
 
 
 
 
 
 
 
 
Net sales
$
161,832

 
$
146,599

 
$
485,305

 
$
432,029

 
Operating income (b)
44,726

 
36,199

 
130,162

 
106,022

 
Operating margin
27.6
%
 
24.7
%
 
26.8
%
 
24.5
%
 
EBITDA
$
47,925

 
$
38,864

 
$
144,398

 
$
115,297

 
EBITDA margin
29.6
%
 
26.5
%
 
29.8
%
 
26.7
%
 
Depreciation and amortization
$
3,541

 
$
3,709

 
$
10,912

 
$
10,938

 
Capital expenditures
3,787

 
1,506

 
7,232

 
4,178

 
 
 
 
 
 
 
 
 
 
Corporate Office and Eliminations
 
 
 
 
 
 
 
 
Intersegment sales eliminations
$
(583
)
 
$
(189
)
 
$
(983
)
 
$
(741
)
 
Operating income (b)
(18,492
)
 
(17,756
)
 
(61,183
)
 
(53,149
)
 
EBITDA
(17,709
)
 
(18,915
)
 
(59,609
)
 
(51,801
)
 
Depreciation and amortization
184

 
190

 
557

 
598

 
Capital expenditures

 
50

 
186

 
228

 
 
 
 
 
 
 
 
 
 
Company
 
 
 
 
 
 
 
 
Net sales
$
622,888

 
$
574,490

 
$
1,869,572

 
$
1,701,408

 
Operating income
145,133

 
126,504

 
429,647

 
367,308

 
Operating margin
23.3
%
 
22.0
%
 
23.0
%
 
21.6
%
 
EBITDA
$
162,805

 
$
146,131

 
$
492,442

 
$
429,397

 
EBITDA margin
26.1
%
 
25.4
%
 
26.3
%
 
25.2
%
 
Depreciation and amortization (c)
$
18,606

 
$
21,280

 
$
59,230

 
$
63,806

 
Capital expenditures
18,888

 
8,515

 
39,856

 
28,054

 
 
 
 
 
 
 
 
 





IDEX CORPORATION
Company and Segment Financial Information - Adjusted
(dollars in thousands)
(unaudited)
 
 
 Three Months Ended
September 30,
(a)
 
Nine Months Ended
September 30,
(a)
 
 
2018
 
2017
 
2018
 
2017
 
Fluid & Metering Technologies
 
 
 
 
 
 
 
 
Net sales
$
239,213

 
$
220,953

 
$
714,346

 
$
658,905

 
Adjusted operating income (b)
70,582

 
61,988

 
208,462

 
181,396

 
Adjusted operating margin
29.5
%
 
28.1
%
 
29.2
%
 
27.5
%
 
Adjusted EBITDA
$
75,671

 
$
67,950

 
$
224,307

 
$
198,512

 
Adjusted EBITDA margin
31.6
%
 
30.8
%
 
31.4
%
 
30.1
%
 
Depreciation and amortization
$
5,500

 
$
6,192

 
$
16,901

 
$
17,823

 
Capital expenditures
6,487

 
3,944

 
15,142

 
12,159

 
 
 
 
 
 
 
 
 
 
Health & Science Technologies
 
 
 
 
 
 
 
 
Net sales
$
222,426

 
$
207,127

 
$
670,904

 
$
611,215

 
Adjusted operating income (b)
52,260

 
46,073

 
158,817

 
137,633

 
Adjusted operating margin
23.5
%
 
22.2
%
 
23.7
%
 
22.5
%
 
Adjusted EBITDA
$
60,861

 
$
58,232

 
$
189,957

 
$
171,983

 
Adjusted EBITDA margin
27.4
%
 
28.1
%
 
28.3
%
 
28.1
%
 
Depreciation and amortization
$
9,381

 
$
11,189

 
$
30,860

 
$
34,447

 
Capital expenditures
8,614

 
3,015

 
17,296

 
11,489

 
 
 
 
 
 
 
 
 
 
Fire & Safety/Diversified Products
 
 
 
 
 
 
 
 
Net sales
$
161,832

 
$
146,599

 
$
485,305

 
$
432,029

 
Adjusted operating income (b)
44,786

 
36,199

 
130,589

 
106,095

 
Adjusted operating margin
27.7
%
 
24.7
%
 
26.9
%
 
24.6
%
 
Adjusted EBITDA
$
47,985

 
$
38,864

 
$
144,825

 
$
115,370

 
Adjusted EBITDA margin
29.7
%
 
26.5
%
 
29.8
%
 
26.7
%
 
Depreciation and amortization
$
3,541

 
$
3,709

 
$
10,912

 
$
10,938

 
Capital expenditures
3,787

 
1,506

 
7,232

 
4,178

 
 
 
 
 
 
 
 
 
 
Corporate Office and Eliminations
 
 
 
 
 
 
 
 
Intersegment sales eliminations
$
(583
)
 
$
(189
)
 
$
(983
)
 
$
(741
)
 
Adjusted operating income (b)
(17,874
)
 
(17,756
)
 
(59,970
)
 
(53,019
)
 
Adjusted EBITDA
(17,091
)
 
(18,915
)
 
(58,396
)
 
(51,671
)
 
Depreciation and amortization
184

 
190

 
557

 
598

 
Capital expenditures

 
50

 
186

 
228

 
 
 
 
 
 
 
 
 
 
Company
 
 
 
 
 
 
 
 
Net sales
$
622,888

 
$
574,490

 
$
1,869,572

 
$
1,701,408

 
Adjusted operating income 
149,754

 
126,504

 
437,898

 
372,105

 
Adjusted operating margin
24.0
%
 
22.0
%
 
23.4
%
 
21.9
%
 
Adjusted EBITDA
$
167,426

 
$
146,131

 
$
500,693

 
$
434,194

 
Adjusted EBITDA margin
26.9
%
 
25.4
%
 
26.8
%
 
25.5
%
 
Depreciation and amortization (c)
$
18,606

 
$
21,280

 
$
59,230

 
$
63,806

 
Capital expenditures
18,888

 
8,515

 
39,856

 
28,054

 
 
 
 
 
 
 
 
 
(a)
Three and nine months data include the results of Finger Lakes Instrumentation (July 2018) and thinXXS (December 2017) in the Health & Science Technologies segment from the date of acquisition and the results of Faure Herman (October 2017) in the Fluid & Metering 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)
Depreciation and amortization excludes amortization of debt issuance costs.



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