(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 | ||||||||||||
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 | ||||||||
August 1, 2024 |
Three Months Ended June 30, | |||||||||||||||||
(Dollars in millions, except per share amounts) | 2024 | 2023 | Increase (Decrease) | ||||||||||||||
Orders | $ | 773.3 | $ | 765.9 | $ | 7.4 | |||||||||||
Change in organic orders* | 2 | % | |||||||||||||||
Net sales | 807.2 | 846.2 | (39.0) | ||||||||||||||
Change in organic net sales* | (4 | %) | |||||||||||||||
Gross profit(a) | 366.8 | 378.0 | (11.2) | ||||||||||||||
Net income attributable to IDEX | 141.3 | 138.6 | 2.7 | ||||||||||||||
Adjusted net income attributable to IDEX* | 156.1 | 165.4 | (9.3) | ||||||||||||||
Adjusted EBITDA* | 224.2 | 240.7 | (16.5) | ||||||||||||||
Diluted EPS attributable to IDEX | 1.86 | 1.82 | 0.04 | ||||||||||||||
Adjusted diluted EPS attributable to IDEX* | 2.06 | 2.18 | (0.12) | ||||||||||||||
Cash flows from operating activities | 133.6 | 141.2 | (7.6) | ||||||||||||||
Free cash flow* | 117.7 | 119.6 | (1.9) | ||||||||||||||
Gross margin(a) | 45.4 | % | 44.7 | % | 70 bps | ||||||||||||
Net income margin | 17.5 | % | 16.4 | % | 110 bps | ||||||||||||
Adjusted EBITDA margin* | 27.8 | % | 28.4 | % | (60) 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. | |||||||||||||||||
(a) There were no non-GAAP adjustments to Gross profit or Gross margin during the periods presented. |
Three Months Ended June 30, (a) | |||||||||||||||||
2024 | 2023 | Increase (Decrease) | |||||||||||||||
Fluid & Metering Technologies ("FMT") | |||||||||||||||||
Net sales | $ | 319.4 | $ | 325.1 | $ | (5.7) | |||||||||||
Change in organic net sales* | — | % | |||||||||||||||
Adjusted EBITDA(b) | 107.7 | 114.1 | (6.4) | ||||||||||||||
Adjusted EBITDA margin | 33.7 | % | 35.1 | % | (140) bps | ||||||||||||
Health & Science Technologies ("HST") | |||||||||||||||||
Net sales | $ | 303.8 | $ | 339.5 | $ | (35.7) | |||||||||||
Change in organic net sales* | (11 | %) | |||||||||||||||
Adjusted EBITDA(b) | 84.2 | 93.7 | (9.5) | ||||||||||||||
Adjusted EBITDA margin | 27.7 | % | 27.6 | % | 10 bps | ||||||||||||
Fire & Safety/Diversified Products ("FSDP") | |||||||||||||||||
Net sales | $ | 185.4 | $ | 184.8 | $ | 0.6 | |||||||||||
Change in organic net sales* | 1 | % | |||||||||||||||
Adjusted EBITDA(b) | 53.8 | 54.5 | (0.7) | ||||||||||||||
Adjusted EBITDA margin | 29.0 | % | 29.4 | % | (40) 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. | |||||||||||||||||
(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 and Alfa Valvole Srl (June 2024) in the FMT segment through the dates of disposition. | |||||||||||||||||
(b) Segment Adjusted EBITDA excludes unallocated corporate costs which are included in Corporate and other. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net sales | $ | 807.2 | $ | 846.2 | $ | 1,607.7 | $ | 1,691.6 | |||||||||||||||
Cost of sales | 440.4 | 468.2 | 883.5 | 931.1 | |||||||||||||||||||
Gross profit | 366.8 | 378.0 | 724.2 | 760.5 | |||||||||||||||||||
Selling, general and administrative expenses | 182.8 | 174.3 | 377.9 | 364.0 | |||||||||||||||||||
Restructuring expenses and asset impairments | 1.3 | 3.6 | 2.4 | 4.1 | |||||||||||||||||||
Operating income | 182.7 | 200.1 | 343.9 | 392.4 | |||||||||||||||||||
Gain on sale of business | (4.6) | — | (4.6) | — | |||||||||||||||||||
Other expense (income) – net | — | 8.3 | (2.7) | 7.7 | |||||||||||||||||||
Interest expense - net | 8.1 | 13.3 | 17.5 | 26.4 | |||||||||||||||||||
Income before income taxes | 179.2 | 178.5 | 333.7 | 358.3 | |||||||||||||||||||
Provision for income taxes | 38.0 | 40.0 | 71.2 | 80.0 | |||||||||||||||||||
Net income | 141.2 | 138.5 | 262.5 | 278.3 | |||||||||||||||||||
Net loss attributable to noncontrolling interest | 0.1 | 0.1 | 0.2 | 0.1 | |||||||||||||||||||
Net income attributable to IDEX | $ | 141.3 | $ | 138.6 | $ | 262.7 | $ | 278.4 | |||||||||||||||
Earnings per Common Share: | |||||||||||||||||||||||
Basic earnings per common share attributable to IDEX | $ | 1.86 | $ | 1.83 | $ | 3.46 | $ | 3.68 | |||||||||||||||
Diluted earnings per common share attributable to IDEX | $ | 1.86 | $ | 1.82 | $ | 3.46 | $ | 3.66 | |||||||||||||||
Share Data: | |||||||||||||||||||||||
Basic weighted average common shares outstanding | 75.7 | 75.6 | 75.7 | 75.6 | |||||||||||||||||||
Diluted weighted average common shares outstanding | 75.9 | 75.9 | 75.9 | 75.9 |
June 30, 2024 | December 31, 2023 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 700.7 | $ | 534.3 | |||||||
Receivables - net | 426.2 | 427.8 | |||||||||
Inventories - net | 427.9 | 420.8 | |||||||||
Other current assets | 74.7 | 63.4 | |||||||||
Total current assets | 1,629.5 | 1,446.3 | |||||||||
Property, plant and equipment - net | 419.1 | 430.3 | |||||||||
Goodwill | 2,787.2 | 2,838.3 | |||||||||
Intangible assets - net | 930.9 | 1,011.8 | |||||||||
Other noncurrent assets | 136.6 | 138.5 | |||||||||
Total assets | $ | 5,903.3 | $ | 5,865.2 | |||||||
Liabilities and equity | |||||||||||
Current liabilities | |||||||||||
Trade accounts payable | $ | 172.4 | $ | 179.7 | |||||||
Accrued expenses | 252.0 | 271.5 | |||||||||
Current portion of long-term borrowings | 0.6 | 0.6 | |||||||||
Dividends payable | 52.4 | 48.5 | |||||||||
Total current liabilities | 477.4 | 500.3 | |||||||||
Long-term borrowings - net | 1,297.3 | 1,325.1 | |||||||||
Deferred income taxes | 281.3 | 291.9 | |||||||||
Other noncurrent liabilities | 193.9 | 206.7 | |||||||||
Total liabilities | 2,249.9 | 2,324.0 | |||||||||
Shareholders' equity | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | 0.9 | 0.9 | |||||||||
Treasury stock | (1,179.1) | (1,187.0) | |||||||||
Additional paid-in capital | 855.9 | 839.0 | |||||||||
Retained earnings | 4,092.5 | 3,934.3 | |||||||||
Accumulated other comprehensive loss | (116.4) | (45.8) | |||||||||
Total shareholders' equity | 3,653.8 | 3,541.4 | |||||||||
Noncontrolling interest | (0.4) | (0.2) | |||||||||
Total equity | 3,653.4 | 3,541.2 | |||||||||
Total liabilities and equity | $ | 5,903.3 | $ | 5,865.2 |
Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 262.5 | $ | 278.3 | |||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
Gain on sale of business | (4.6) | — | |||||||||
Credit loss on note receivable from collaborative partner | — | 7.7 | |||||||||
Depreciation | 32.5 | 27.2 | |||||||||
Amortization of intangible assets | 48.5 | 46.8 | |||||||||
Share-based compensation expense | 16.9 | 17.0 | |||||||||
Deferred income taxes | 0.4 | — | |||||||||
Changes in (net of the effect from acquisitions/divestitures and foreign currency translation): | |||||||||||
Receivables - net | (11.9) | (5.8) | |||||||||
Inventories - net | (19.8) | (2.0) | |||||||||
Other current assets | (12.2) | (18.6) | |||||||||
Trade accounts payable | 0.3 | (17.9) | |||||||||
Deferred revenue | 0.3 | 4.2 | |||||||||
Accrued expenses | (21.9) | (52.5) | |||||||||
Other - net | (0.8) | 4.7 | |||||||||
Net cash flows provided by operating activities | 290.2 | 289.1 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (35.9) | (48.2) | |||||||||
Acquisition of business, net of cash acquired | 1.6 | (110.3) | |||||||||
Proceeds from sale of business, net of cash remitted | 45.5 | — | |||||||||
Purchases of marketable securities | — | (19.1) | |||||||||
Other - net | 0.5 | 1.0 | |||||||||
Net cash flows provided by (used in) investing activities | 11.7 | (176.6) | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of long-term borrowings | — | 100.0 | |||||||||
Payment of long-term borrowings | (25.0) | (100.0) | |||||||||
Cash dividends paid to shareholders | (100.7) | (93.9) | |||||||||
Proceeds from share issuances, net of shares withheld for taxes | 7.9 | 3.4 | |||||||||
Repurchases of common stock | — | (1.0) | |||||||||
Other - net | (0.4) | (0.5) | |||||||||
Net cash flows used in financing activities | (118.2) | (92.0) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (17.3) | 6.3 | |||||||||
Net increase in cash and cash equivalents | 166.4 | 26.8 | |||||||||
Cash and cash equivalents at beginning of year | 534.3 | 430.2 | |||||||||
Cash and cash equivalents at end of period | $ | 700.7 | $ | 457.0 |
FMT | HST | FSDP | IDEX | ||||||||||||||||||||
Three Months Ended June 30, 2024 | |||||||||||||||||||||||
Change in net sales | (2 | %) | (11 | %) | — | % | (5 | %) | |||||||||||||||
Less: | |||||||||||||||||||||||
Net impact from acquisitions/divestitures(1) | (1 | %) | — | % | — | % | — | % | |||||||||||||||
Impact from foreign currency | (1 | %) | — | % | (1 | %) | (1 | %) | |||||||||||||||
Change in organic net sales | — | % | (11 | %) | 1 | % | (4 | %) | |||||||||||||||
Six Months Ended June 30, 2024 | |||||||||||||||||||||||
Change in net sales | (2 | %) | (11 | %) | 1 | % | (5 | %) | |||||||||||||||
Less: | |||||||||||||||||||||||
Net impact from acquisitions/divestitures(1) | — | % | 1 | % | — | % | — | % | |||||||||||||||
Impact from foreign currency | (1 | %) | — | % | — | % | — | % | |||||||||||||||
Change in organic net sales | (1 | %) | (12 | %) | 1 | % | (5 | %) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Gross profit | $ | 366.8 | $ | 378.0 | $ | 724.2 | $ | 760.5 | |||||||||||||||
Fair value inventory step-up charge | — | — | 2.5 | — | |||||||||||||||||||
Adjusted gross profit | $ | 366.8 | $ | 378.0 | $ | 726.7 | $ | 760.5 | |||||||||||||||
Net sales | $ | 807.2 | $ | 846.2 | $ | 1,607.7 | $ | 1,691.6 | |||||||||||||||
Gross margin | 45.4 | % | 44.7 | % | 45.0 | % | 45.0 | % | |||||||||||||||
Adjusted gross margin | 45.4 | % | 44.7 | % | 45.2 | % | 45.0 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
Reported net income attributable to IDEX | $ | 141.3 | $ | 138.6 | $ | 262.7 | $ | 278.4 | ||||||||||||||||||
Fair value inventory step-up charge | — | — | 2.5 | — | ||||||||||||||||||||||
Tax impact on fair value inventory step-up charge | — | — | (0.5) | — | ||||||||||||||||||||||
Restructuring expenses and asset impairments | 1.3 | 3.6 | 2.4 | 4.1 | ||||||||||||||||||||||
Tax impact on restructuring expenses and asset impairments | (0.3) | (0.8) | (0.6) | (0.9) | ||||||||||||||||||||||
Gain on sale of business | (4.6) | — | (4.6) | — | ||||||||||||||||||||||
Tax impact on gain of sale of business | — | — | — | — | ||||||||||||||||||||||
Credit loss on note receivable from collaborative partner(2) | — | 7.7 | — | 7.7 | ||||||||||||||||||||||
Tax impact on credit loss on note receivable from collaborative partner | — | (1.6) | — | (1.6) | ||||||||||||||||||||||
Acquisition-related intangible asset amortization | 23.9 | 23.2 | 48.5 | 46.8 | ||||||||||||||||||||||
Tax impact on acquisition-related intangible asset amortization | (5.5) | (5.3) | (11.1) | (10.5) | ||||||||||||||||||||||
Adjusted net income attributable to IDEX | $ | 156.1 | $ | 165.4 | $ | 299.3 | $ | 324.0 | ||||||||||||||||||
Reported diluted EPS attributable to IDEX | $ | 1.86 | $ | 1.82 | $ | 3.46 | $ | 3.66 | ||||||||||||||||||
Fair value inventory step-up charge | — | — | 0.03 | — | ||||||||||||||||||||||
Tax impact on fair value inventory step-up charge | — | — | (0.01) | — | ||||||||||||||||||||||
Restructuring expenses and asset impairments | 0.02 | 0.05 | 0.03 | 0.06 | ||||||||||||||||||||||
Tax impact on restructuring expenses and asset impairments | — | (0.01) | (0.01) | (0.01) | ||||||||||||||||||||||
Gain on sale of business | (0.06) | — | (0.06) | — | ||||||||||||||||||||||
Tax impact on gain of sale of business | — | — | — | — | ||||||||||||||||||||||
Credit loss on note receivable from collaborative partner(2) | — | 0.10 | — | 0.10 | ||||||||||||||||||||||
Tax impact on credit loss on note receivable from collaborative partner | — | (0.02) | — | (0.02) | ||||||||||||||||||||||
Acquisition-related intangible asset amortization | 0.31 | 0.31 | 0.64 | 0.62 | ||||||||||||||||||||||
Tax impact on acquisition-related intangible asset amortization | (0.07) | (0.07) | (0.14) | (0.14) | ||||||||||||||||||||||
Adjusted diluted EPS attributable to IDEX | $ | 2.06 | $ | 2.18 | $ | 3.94 | $ | 4.27 | ||||||||||||||||||
Diluted weighted average shares outstanding | 75.9 | 75.9 | 75.9 | 75.9 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Reported net income | $ | 141.2 | $ | 138.5 | $ | 262.5 | $ | 278.3 | |||||||||||||||
Provision for income taxes | 38.0 | 40.0 | 71.2 | 80.0 | |||||||||||||||||||
Interest expense - net | 8.1 | 13.3 | 17.5 | 26.4 | |||||||||||||||||||
Gain on sale of business | (4.6) | — | (4.6) | — | |||||||||||||||||||
Depreciation | 16.3 | 14.4 | 32.5 | 27.2 | |||||||||||||||||||
Amortization | 23.9 | 23.2 | 48.5 | 46.8 | |||||||||||||||||||
Fair value inventory step-up charges | — | — | 2.5 | — | |||||||||||||||||||
Restructuring expenses and asset impairments | 1.3 | 3.6 | 2.4 | 4.1 | |||||||||||||||||||
Credit loss on note receivable from collaborative partner(2) | — | 7.7 | — | 7.7 | |||||||||||||||||||
Adjusted EBITDA | $ | 224.2 | $ | 240.7 | $ | 432.5 | $ | 470.5 | |||||||||||||||
Adjusted EBITDA Components | |||||||||||||||||||||||
FMT | $ | 107.7 | $ | 114.1 | $ | 213.1 | $ | 220.3 | |||||||||||||||
HST | 84.2 | 93.7 | 165.6 | 194.4 | |||||||||||||||||||
FSDP | 53.8 | 54.5 | 105.2 | 104.2 | |||||||||||||||||||
Corporate and other | (21.5) | (21.6) | (51.4) | (48.4) | |||||||||||||||||||
Total Adjusted EBITDA | $ | 224.2 | $ | 240.7 | $ | 432.5 | $ | 470.5 | |||||||||||||||
Net sales | $ | 807.2 | $ | 846.2 | $ | 1,607.7 | $ | 1,691.6 | |||||||||||||||
Net income margin | 17.5 | % | 16.4 | % | 16.3 | % | 16.4 | % | |||||||||||||||
Adjusted EBITDA margin | 27.8 | % | 28.4 | % | 26.9 | % | 27.8 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Cash flows from operating activities | $ | 133.6 | $ | 141.2 | $ | 290.2 | $ | 289.1 | |||||||||||||||
Less: Capital expenditures | 15.9 | 21.6 | 35.9 | 48.2 | |||||||||||||||||||
Free cash flow | $ | 117.7 | $ | 119.6 | $ | 254.3 | $ | 240.9 |
Guidance | |||||||||||||||||||||||
Third Quarter 2024 | Full Year 2024 | ||||||||||||||||||||||
Low End | High End | Low End | High End | ||||||||||||||||||||
Change in net sales | (1 | %) | — | % | (2 | %) | (1 | %) | |||||||||||||||
Less: | |||||||||||||||||||||||
Net impact from acquisitions/divestitures | (1 | %) | (1 | %) | — | % | — | % | |||||||||||||||
Impact from foreign currency | — | % | — | % | — | % | — | % | |||||||||||||||
Change in organic net sales | — | % | 1 | % | (2 | %) | (1 | %) |
Guidance | ||||||||||||||
Third Quarter 2024 | Full Year 2024 | |||||||||||||
Estimated diluted EPS attributable to IDEX | $1.61 - $1.66 | $6.85 - $6.95 | ||||||||||||
Fair value inventory step-up charge | — | 0.03 | ||||||||||||
Tax impact on fair value inventory step-up charge | — | (0.01) | ||||||||||||
Restructuring expenses and asset impairments | — | 0.03 | ||||||||||||
Tax impact on restructuring expenses and asset impairments | — | (0.01) | ||||||||||||
Gain on sale of business | — | (0.06) | ||||||||||||
Tax impact on gain of sale of business | — | — | ||||||||||||
Acquisition-related intangible asset amortization | 0.31 | 1.25 | ||||||||||||
Tax impact on acquisition-related intangible asset amortization | (0.07) | (0.28) | ||||||||||||
Estimated adjusted diluted EPS attributable to IDEX | $1.85 - $1.90 | $7.80 - $7.90 |
Guidance | |||||||||||||||||||||||
Third Quarter 2024 | Full Year 2024 | ||||||||||||||||||||||
Low End | High End | Low End | High End | ||||||||||||||||||||
Reported net income | $ | 123.1 | $ | 127.0 | $ | 520.2 | $ | 527.9 | |||||||||||||||
Provision for income taxes | 36.8 | 37.9 | 148.1 | 150.4 | |||||||||||||||||||
Interest expense - net | 9.8 | 9.8 | 37.1 | 37.1 | |||||||||||||||||||
Gain on sale of business | — | — | (4.6) | (4.6) | |||||||||||||||||||
Depreciation | 16.9 | 16.9 | 66.7 | 66.7 | |||||||||||||||||||
Amortization of intangible assets | 23.7 | 23.7 | 95.8 | 95.8 | |||||||||||||||||||
Fair value inventory step-up charge | — | — | 2.5 | 2.5 | |||||||||||||||||||
Restructuring expenses and asset impairments | — | — | 2.4 | 2.4 | |||||||||||||||||||
Adjusted EBITDA | $ | 210.3 | $ | 215.3 | $ | 868.2 | $ | 878.2 | |||||||||||||||
Net sales | $ | 782.0 | $ | 791.5 | $ | 3,195.7 | $ | 3,230.0 | |||||||||||||||
Net income margin | 15.7% | 16.0% | 16.3% | 16.3% | |||||||||||||||||||
Adjusted EBITDA margin | 26.9% | 27.2% | 27.2% | 27.2% |
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