Delaware | 1-10235 | 36-3555336 | ||||||||||||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||||||||||||
of incorporation) | Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, par value $.01 per share | IEX | New York Stock Exchange |
Emerging growth company | ☐ | |||||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
IDEX CORPORATION | ||||||||
By: | /s/ ABHISHEK KHANDELWAL | |||||||
Abhishek Khandelwal | ||||||||
Senior Vice President and Chief Financial Officer | ||||||||
April 24, 2024 |
Three Months Ended March 31, | |||||||||||||||||
(Dollars in millions, except per share amounts) | 2024 | 2023 | Increase (Decrease) | ||||||||||||||
Orders | $ | 820.3 | $ | 825.5 | $ | (5.2) | |||||||||||
Change in organic orders* | (1 | %) | |||||||||||||||
Net sales | 800.5 | 845.4 | (44.9) | ||||||||||||||
Change in organic net sales* | (6 | %) | |||||||||||||||
Gross profit | 357.4 | 382.5 | (25.1) | ||||||||||||||
Adjusted gross profit* | 359.9 | 382.5 | (22.6) | ||||||||||||||
Net income attributable to IDEX | 121.4 | 139.8 | (18.4) | ||||||||||||||
Adjusted net income attributable to IDEX* | 143.2 | 158.6 | (15.4) | ||||||||||||||
Adjusted EBITDA* | 208.3 | 229.8 | (21.5) | ||||||||||||||
Diluted EPS attributable to IDEX | 1.60 | 1.84 | (0.24) | ||||||||||||||
Adjusted diluted EPS attributable to IDEX* | 1.88 | 2.09 | (0.21) | ||||||||||||||
Cash flows from operating activities | 156.6 | 147.9 | 8.7 | ||||||||||||||
Free cash flow* | 136.6 | 121.3 | 15.3 | ||||||||||||||
Gross margin | 44.6 | % | 45.2 | % | (60) bps | ||||||||||||
Adjusted gross margin* | 45.0 | % | 45.2 | % | (20) bps | ||||||||||||
Net income margin | 15.2 | % | 16.5 | % | (130) bps | ||||||||||||
Adjusted EBITDA margin* | 26.0 | % | 27.2 | % | (120) bps | ||||||||||||
*These are non-GAAP measures. See the definitions of these non-GAAP measures in the section in this release titled “Non-GAAP Measures of Financial Performance” and reconciliations to their most directly comparable GAAP financial measures in the reconciliation tables at the end of this release. |
Three Months Ended March 31, (a) |
|||||||||||||||||
2024 | 2023 | Increase (Decrease) | |||||||||||||||
Fluid & Metering Technologies ("FMT") | |||||||||||||||||
Net sales | $ | 313.7 | $ | 321.8 | $ | (8.1) | |||||||||||
Change in organic net sales* | (3 | %) | |||||||||||||||
Adjusted EBITDA(b) |
105.4 | 106.2 | (0.8) | ||||||||||||||
Adjusted EBITDA margin | 33.6 | % | 33.0 | % | 60 bps | ||||||||||||
Health & Science Technologies ("HST") | |||||||||||||||||
Net sales | $ | 310.1 | $ | 351.0 | $ | (40.9) | |||||||||||
Change in organic net sales* | (13 | %) | |||||||||||||||
Adjusted EBITDA(b) |
81.4 | 100.7 | (19.3) | ||||||||||||||
Adjusted EBITDA margin | 26.2 | % | 28.7 | % | (250) bps | ||||||||||||
Fire & Safety/Diversified Products ("FSDP") | |||||||||||||||||
Net sales | $ | 178.0 | $ | 174.4 | $ | 3.6 | |||||||||||
Change in organic net sales* | 2 | % | |||||||||||||||
Adjusted EBITDA(b) |
51.4 | 49.7 | 1.7 | ||||||||||||||
Adjusted EBITDA margin | 28.9 | % | 28.5 | % | 40 bps | ||||||||||||
Corporate Office and Eliminations | |||||||||||||||||
Intersegment sales eliminations | $ | (1.3) | $ | (1.8) | $ | 0.5 | |||||||||||
Adjusted EBITDA(b) |
(29.9) | (26.8) | (3.1) | ||||||||||||||
*These are non-GAAP measures. See the definitions of these non-GAAP measures in the section in this release titled “Non-GAAP Measures of Financial Performance” and reconciliations to their most directly comparable GAAP financial measures in the reconciliation tables at the end of this release. | |||||||||||||||||
(a) Three month data includes the results of the acquisitions of Iridian Spectral Technologies (May 2023) and STC Material Solutions (December 2023) in the HST segment. Three month data also includes the results of Micropump, Inc. (August 2023) and Novotema, SpA (December 2023) in the HST segment through the dates of disposition. | |||||||||||||||||
(b) Segment Adjusted EBITDA excludes unallocated corporate costs which are included in Corporate Office and Eliminations. |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net sales | $ | 800.5 | $ | 845.4 | |||||||
Cost of sales | 443.1 | 462.9 | |||||||||
Gross profit | 357.4 | 382.5 | |||||||||
Selling, general and administrative expenses | 195.1 | 189.7 | |||||||||
Restructuring expenses and asset impairments | 1.1 | 0.5 | |||||||||
Operating income | 161.2 | 192.3 | |||||||||
Other (income) expense - net | (2.7) | (0.6) | |||||||||
Interest expense - net | 9.4 | 13.1 | |||||||||
Income before income taxes | 154.5 | 179.8 | |||||||||
Provision for income taxes | 33.2 | 40.0 | |||||||||
Net income | 121.3 | 139.8 | |||||||||
Net loss attributable to noncontrolling interest | 0.1 | — | |||||||||
Net income attributable to IDEX | $ | 121.4 | $ | 139.8 | |||||||
Earnings per Common Share: | |||||||||||
Basic earnings per common share attributable to IDEX | $ | 1.60 | $ | 1.85 | |||||||
Diluted earnings per common share attributable to IDEX | $ | 1.60 | $ | 1.84 | |||||||
Share Data: | |||||||||||
Basic weighted average common shares outstanding | 75.7 | 75.6 | |||||||||
Diluted weighted average common shares outstanding | 75.9 | 75.9 |
March 31, 2024 | December 31, 2023 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 616.3 | $ | 534.3 | |||||||
Receivables - net | 437.9 | 427.8 | |||||||||
Inventories - net | 426.0 | 420.8 | |||||||||
Other current assets | 74.3 | 63.4 | |||||||||
Total current assets | 1,554.5 | 1,446.3 | |||||||||
Property, plant and equipment - net | 428.2 | 430.3 | |||||||||
Goodwill | 2,803.0 | 2,838.3 | |||||||||
Intangible assets - net | 969.1 | 1,011.8 | |||||||||
Other noncurrent assets | 134.6 | 138.5 | |||||||||
Total assets | $ | 5,889.4 | $ | 5,865.2 | |||||||
Liabilities and equity | |||||||||||
Current liabilities | |||||||||||
Trade accounts payable | $ | 185.8 | $ | 179.7 | |||||||
Accrued expenses | 274.1 | 271.5 | |||||||||
Current portion of long-term borrowings | 0.7 | 0.6 | |||||||||
Dividends payable | — | 48.5 | |||||||||
Total current liabilities | 460.6 | 500.3 | |||||||||
Long-term borrowings - net | 1,322.9 | 1,325.1 | |||||||||
Deferred income taxes | 286.0 | 291.9 | |||||||||
Other noncurrent liabilities | 201.6 | 206.7 | |||||||||
Total liabilities | 2,271.1 | 2,324.0 | |||||||||
Shareholders' equity | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | 0.9 | 0.9 | |||||||||
Additional paid-in capital | 851.5 | 839.0 | |||||||||
Retained earnings | 4,055.7 | 3,934.3 | |||||||||
Treasury stock | (1,179.3) | (1,187.0) | |||||||||
Accumulated other comprehensive loss | (110.2) | (45.8) | |||||||||
Total shareholders' equity | 3,618.6 | 3,541.4 | |||||||||
Noncontrolling interest | (0.3) | (0.2) | |||||||||
Total equity | 3,618.3 | 3,541.2 | |||||||||
Total liabilities and equity | $ | 5,889.4 | $ | 5,865.2 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 121.3 | $ | 139.8 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Depreciation | 16.2 | 12.8 | |||||||||
Amortization of intangible assets | 24.6 | 23.6 | |||||||||
Share-based compensation expense | 12.5 | 12.8 | |||||||||
Deferred income taxes | 0.2 | (0.2) | |||||||||
Changes in (net of the effect from acquisitions and foreign currency translation): | |||||||||||
Receivables - net | (12.2) | (0.7) | |||||||||
Inventories - net | (9.5) | (23.3) | |||||||||
Other current assets | (10.9) | (11.1) | |||||||||
Trade accounts payable | 8.9 | 7.6 | |||||||||
Deferred revenue | 6.8 | 10.2 | |||||||||
Accrued expenses | (1.5) | (24.9) | |||||||||
Other - net | 0.2 | 1.3 | |||||||||
Net cash flows provided by operating activities | 156.6 | 147.9 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (20.0) | (26.6) | |||||||||
Purchases of marketable securities | — | (3.2) | |||||||||
Other - net | — | 0.6 | |||||||||
Net cash flows used in investing activities | (20.0) | (29.2) | |||||||||
Cash flows from financing activities | |||||||||||
Cash dividends paid to shareholders | (48.5) | (45.5) | |||||||||
Proceeds from share issuances, net of shares withheld for taxes | 7.7 | 0.3 | |||||||||
Other - net | (0.2) | — | |||||||||
Net cash flows used in financing activities | (41.0) | (45.2) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (13.6) | 7.0 | |||||||||
Net increase in cash and cash equivalents | 82.0 | 80.5 | |||||||||
Cash and cash equivalents at beginning of year | 534.3 | 430.2 | |||||||||
Cash and cash equivalents at end of period | $ | 616.3 | $ | 510.7 |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||
FMT | HST | FSDP | IDEX | ||||||||||||||||||||
Change in net sales | (3 | %) | (12 | %) | 2 | % | (5 | %) | |||||||||||||||
Less: | |||||||||||||||||||||||
Net impact from acquisitions/divestitures(1) |
— | % | 1 | % | — | % | 1 | % | |||||||||||||||
Impact from foreign currency | — | % | — | % | — | % | — | % | |||||||||||||||
Change in organic net sales | (3 | %) | (13 | %) | 2 | % | (6 | %) |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Gross profit | $ | 357.4 | $ | 382.5 | |||||||
Fair value inventory step-up charge | 2.5 | — | |||||||||
Adjusted gross profit | $ | 359.9 | $ | 382.5 | |||||||
Net sales | $ | 800.5 | $ | 845.4 | |||||||
Gross margin | 44.6 | % | 45.2 | % | |||||||
Adjusted gross margin | 45.0 | % | 45.2 | % |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Reported net income attributable to IDEX | $ | 121.4 | $ | 139.8 | ||||||||||
Fair value inventory step-up charge | 2.5 | — | ||||||||||||
Tax impact on fair value inventory step-up charge | (0.5) | — | ||||||||||||
Restructuring expenses and asset impairments | 1.1 | 0.5 | ||||||||||||
Tax impact on restructuring expenses and asset impairments | (0.3) | (0.1) | ||||||||||||
Acquisition-related intangible asset amortization | 24.6 | 23.6 | ||||||||||||
Tax impact on acquisition-related intangible asset amortization | (5.6) | (5.2) | ||||||||||||
Adjusted net income attributable to IDEX | $ | 143.2 | $ | 158.6 | ||||||||||
Reported diluted EPS attributable to IDEX | $ | 1.60 | $ | 1.84 | ||||||||||
Fair value inventory step-up charge | 0.03 | — | ||||||||||||
Tax impact on fair value inventory step-up charge | (0.01) | — | ||||||||||||
Restructuring expenses and asset impairments | 0.01 | 0.01 | ||||||||||||
Tax impact on restructuring expenses and asset impairments | — | — | ||||||||||||
Acquisition-related intangible asset amortization | 0.32 | 0.31 | ||||||||||||
Tax impact on acquisition-related intangible asset amortization | (0.07) | (0.07) | ||||||||||||
Adjusted diluted EPS attributable to IDEX | $ | 1.88 | $ | 2.09 | ||||||||||
Diluted weighted average shares outstanding | 75.9 | 75.9 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FMT | HST | FSDP | Corporate | IDEX | FMT | HST | FSDP | Corporate | IDEX | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reported net income | $ | — | $ | — | $ | — | $ | — | $ | 121.3 | $ | — | $ | — | $ | — | $ | — | $ | 139.8 | |||||||||||||||||||||||||||||||||||||||
Provision for income taxes | — | — | — | — | 33.2 | — | — | — | — | 40.0 | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense - net | — | — | — | — | 9.4 | — | — | — | — | 13.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense - net | — | — | — | — | (2.7) | — | — | — | — | (0.6) | |||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | 94.8 | 49.2 | 47.7 | (30.5) | 161.2 | 96.5 | 77.5 | 46.0 | (27.7) | 192.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) - net | 0.5 | 2.1 | (0.2) | 0.3 | 2.7 | 0.5 | (0.3) | (0.2) | 0.6 | 0.6 | |||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation | 4.3 | 9.4 | 2.3 | 0.2 | 16.2 | 3.1 | 7.3 | 2.1 | 0.3 | 12.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization | 5.3 | 17.7 | 1.6 | — | 24.6 | 6.0 | 15.9 | 1.7 | — | 23.6 | |||||||||||||||||||||||||||||||||||||||||||||||||
Fair value inventory step-up charge | — | 2.5 | — | — | 2.5 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring expenses and asset impairments | 0.5 | 0.5 | — | 0.1 | 1.1 | 0.1 | 0.3 | 0.1 | — | 0.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 105.4 | $ | 81.4 | $ | 51.4 | $ | (29.9) | $ | 208.3 | $ | 106.2 | $ | 100.7 | $ | 49.7 | $ | (26.8) | $ | 229.8 | |||||||||||||||||||||||||||||||||||||||
Net sales (eliminations) | $ | 313.7 | $ | 310.1 | $ | 178.0 | $ | (1.3) | $ | 800.5 | $ | 321.8 | $ | 351.0 | $ | 174.4 | $ | (1.8) | $ | 845.4 | |||||||||||||||||||||||||||||||||||||||
Net income margin | 15.2% | 16.5% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin | 33.6% | 26.2% | 28.9% | n/m | 26.0% | 33.0% | 28.7% | 28.5% | n/m | 27.2% |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities | $ | 156.6 | $ | 147.9 | |||||||
Less: Capital expenditures | 20.0 | 26.6 | |||||||||
Free cash flow | $ | 136.6 | $ | 121.3 |
Guidance | |||||||||||||||||||||||
Second Quarter 2024 | Full Year 2024 | ||||||||||||||||||||||
Low End | High End | Low End | High End | ||||||||||||||||||||
Change in net sales | (3 | %) | (2 | %) | 1 | % | 3 | % | |||||||||||||||
Less: | |||||||||||||||||||||||
Net impact from acquisitions/divestitures | — | % | — | % | 1 | % | 1 | % | |||||||||||||||
Impact from foreign currency | — | % | — | % | — | % | — | % | |||||||||||||||
Change in organic net sales | (3 | %) | (2 | %) | — | % | 2 | % |
Guidance | ||||||||||||||
Second Quarter 2024 | Full Year 2024 | |||||||||||||
Estimated diluted EPS attributable to IDEX | $1.75 - $1.80 | $7.13 - $7.43 | ||||||||||||
Fair value inventory step-up charge | — | 0.03 | ||||||||||||
Tax impact on fair value inventory step-up charge | — | (0.01) | ||||||||||||
Restructuring expenses and asset impairments | — | 0.01 | ||||||||||||
Tax impact on restructuring expenses and asset impairments | — | — | ||||||||||||
Acquisition-related intangible asset amortization | 0.32 | 1.28 | ||||||||||||
Tax impact on acquisition-related intangible asset amortization | (0.07) | (0.29) | ||||||||||||
Estimated adjusted diluted EPS attributable to IDEX | $2.00 - $2.05 | $8.15 - $8.45 |
Guidance | |||||||||||||||||||||||
Second Quarter 2024 | Full Year 2024 | ||||||||||||||||||||||
Low End | High End | Low End | High End | ||||||||||||||||||||
Reported net income | $ | 133.3 | $ | 136.4 | $ | 541.5 | $ | 564.5 | |||||||||||||||
Provision for income taxes | 39.8 | 40.8 | 162.0 | 168.9 | |||||||||||||||||||
Interest expense - net | 10.4 | 10.4 | 42.6 | 42.6 | |||||||||||||||||||
Depreciation | 17.4 | 17.4 | 70.8 | 70.8 | |||||||||||||||||||
Amortization of intangible assets | 24.2 | 24.2 | 97.5 | 97.5 | |||||||||||||||||||
Fair value inventory step-up charge | — | — | 2.5 | 2.5 | |||||||||||||||||||
Restructuring expenses and asset impairments | — | — | 1.1 | 1.1 | |||||||||||||||||||
Adjusted EBITDA | $ | 225.1 | $ | 229.2 | $ | 918.0 | $ | 947.9 | |||||||||||||||
Net sales | $ | 819.1 | $ | 828.1 | $ | 3,320.3 | $ | 3,385.6 | |||||||||||||||
Net income margin | 16.3% | 16.5% | 16.3% | 16.7% | |||||||||||||||||||
Adjusted EBITDA margin | 27.5% | 27.7% | 27.6% | 28.0% |