Business Wire | Jul 23, 2020 04:15PM EDT

IDEX Reports Second Quarter Results

Jul. 23, 2020

LAKE FOREST, Ill.--(BUSINESS WIRE)--Jul. 23, 2020--IDEX Corporation (NYSE: IEX) today announced its financial results for the three month period ended June 30, 2020.

Second Quarter 2020 Highlights

* Cash from operations of $169.5 million led to record quarterly FCF of $161.1 million * Completed a public offering of $500 million 3.0% Senior Notes * Operating margin of 19.7%; adjusted operating margin of 21.1% * Adjusted EBITDA margin of 25.1%

Second Quarter 2020

Orders of $521.9 million were down 17 percent compared with the prior year period (-18 percent organic, +2 percent acquisitions and -1 percent foreign currency translation).

Sales of $561.2 million were down 13 percent compared with the prior year period (-17 percent organic, +5 percent acquisitions and -1 percent foreign currency translation).

Gross margin of 41.8 percent was down 370 basis points compared with the prior year period as a result of reduced volume, business mix, the dilutive impact to margins from the recent acquisitions and a $4.1 million pre-tax fair value inventory step-up charge related to the Flow MD acquisition included in the current year period. Excluding the $4.1 million fair value inventory step-up charge, adjusted gross margin of 42.6 percent was down 290 basis points compared with the adjusted prior year period.

Operating income of $110.6 million resulted in an operating margin of 19.7 percent which was down 450 basis points compared with the prior year period as a result of lower sales volume, the dilutive impact to margins from the recent acquisitions, the fair value inventory step-up charge and higher restructuring expenses in 2020, partially offset by price, restructuring savings and an overall reduction in variable expenses. Excluding the $4.1 million fair value inventory step-up charge and $3.8 million of restructuring expenses, adjusted operating income was $118.5 million with an adjusted operating margin of 21.1 percent, down 340 basis points compared with the adjusted prior year period.

Provision for income taxes of $20.8 million in the second quarter of 2020 resulted in an effective tax rate (ETR) of 22.7 percent, which was higher than the prior year period ETR of 21.7 percent primarily due to a decrease in the excess tax benefits related to share-based compensation.

Net income was $70.9 million which resulted in EPS of $0.93. Excluding the fair value inventory step-up charge, restructuring expenses and the loss on early debt redemption, adjusted EPS was $1.10, a decrease of 40 cents, or 27 percent, from the adjusted prior year period EPS. EBITDA of $124.8 million was 22 percent of sales and covered interest expense by 10 times. Adjusted EBITDA of $141.1 million was 25 percent of sales and covered interest expense by over 11 times.

Cash from operations of $169.5 million was up 29% from the prior year period due to favorable working capital, partially offset by lower earnings in the second quarter of 2020. Cash from operations led to free cash flow of $161.1 million, which was up 36 percent from the prior year period and 193 percent of adjusted net income.

The Company repurchased 9,600 shares of common stock for $1.4 million in the second quarter of 2020 at an average price of $149.44.

"I want to thank our employees around the world for their exceptional work overthe past several months under the most difficult circumstances. With safety asour first priority, these women and men continued to provide our essentialproducts across the globe while adhering to a myriad of new safety protocols,from taking temperatures to social distancing and face coverings. The secondquarter of 2020 was unprecedented, but the resiliency of our businesses and theresolve of our teams were on full display, with strong operating performanceand the fast-track development of several new products to support the battleagainst COVID-19.



The global health pandemic continued to impact our commercial performance, withsecond quarter organic orders decreasing 18 percent and organic salesdecreasing 17 percent. Sales of $561 million drove adjusted operating margin of21.1 percent and adjusted EPS of $1.10. Our recent acquisitions negativelyimpacted adjusted gross margin and adjusted operating margin by 100 basispoints and 70 basis points, respectively. As expected with the steep decline inrevenue, the balance sheet delevered resulting in record quarterly free cashflow of $161 million. We ended the quarter with record cash of $746 million andnearly $800 million available under our revolving credit facility. Our balancesheet and liquidity position are key strengths and we are well positioned todeploy capital when opportunities arise.



Our business continues to demonstrate durability given the mission criticalnature of our products. Our businesses and products supporting maintenance,repair and operating fared better than our businesses and products that aremore reliant on the deployment of new capital. We believe we hit the bottom inthe second quarter, but we still face much uncertainty regarding the futurepath of the economy due to the evolving global pandemic. As the timing and paceof an economic recovery are uncertain, we are unable to provide detailedfinancial guidance other than based on currently available information we nowexpect third quarter organic sales to be down approximately 12 to 17 percentversus prior year."



Andrew K. Silvernail

Chairman and Chief Executive Officer

Second Quarter 2020 Segment Highlights

Fluid & Metering Technologies

* Sales of $219.1 million reflected an 11 percent decrease compared to the second quarter of 2019 (-20 percent organic, +10 percent acquisition and -1 percent foreign currency translation). * Operating income of $50.9 million resulted in an operating margin of 23.2 percent which was down 690 basis points compared with the prior year period primarily due to lower volume and the impact of the Flow MD acquisition as well as a $4.1 million fair value inventory step-up charge related to the Flow MD acquisition and higher restructuring expenses included in the current year period, partially offset by price, restructuring savings and lower variable costs. Excluding the $4.1 million fair value inventory step-up charge and $1.8 million of restructuring expenses, adjusted operating income was $56.8 million with an adjusted operating margin of 26.0 percent, a 450 basis point decrease compared to the adjusted prior year period. * EBITDA of $57.8 million resulted in an EBITDA margin of 26.4 percent. Excluding the $4.1 million fair value inventory step-up charge and $1.8 million of restructuring expenses, adjusted EBITDA of $63.7 million resulted in an adjusted EBITDA margin of 29.1 percent, a 360 basis point decrease compared to the adjusted prior year period primarily due to lower volume.

Health & Science Technologies

* Sales of $215.7 million reflected a 7 percent decrease compared to the second quarter of 2019 (-10 percent organic, +4 percent acquisition and -1 percent foreign currency translation). * Operating income of $48.0 million resulted in an operating margin of 22.3 percent which was down 210 basis points compared with the prior year period primarily due to lower volume, the impact of the Velcora acquisition and higher restructuring expenses, partially offset by price, restructuring savings and lower variable costs. Excluding $1.2 million of restructuring expenses, adjusted operating income was $49.2 million with an adjusted operating margin of 22.8 percent, a 180 basis point decrease compared to the adjusted prior year period. * EBITDA of $57.5 million resulted in an EBITDA margin of 26.6 percent. Excluding the $1.2 million of restructuring expenses, adjusted EBITDA of $58.7 million resulted in an adjusted EBITDA margin of 27.2 percent, a 150 basis point decrease compared to the adjusted prior year period primarily due to lower volume.

Fire & Safety/Diversified Products

* Sales of $127.1 million reflected a 23 percent decrease compared to the second quarter of 2019 (-22 percent organic and -1 percent foreign currency translation). * Operating income of $28.8 million resulted in an operating margin of 22.7 percent which was down 390 basis points compared with the prior year period as a result of lower volume and business mix, partially offset by price and restructuring savings as well as lower variable costs and lower restructuring expenses. Excluding $0.6 million of restructuring expenses, adjusted operating income was $29.4 million with an adjusted operating margin of 23.2 percent, a 390 basis point decrease compared to the adjusted prior year period. * EBITDA of $32.5 million resulted in an EBITDA margin of 25.6 percent. Excluding the $0.6 million of restructuring expenses, adjusted EBITDA of $33.1 million resulted in an adjusted EBITDA margin of 26.1 percent, a 330 basis point decrease compared to the prior year period primarily due to lower volume.

For the second quarter of 2020, Fluid & Metering Technologies contributed 39 percent of sales, 40 percent of operating income and 39 percent of EBITDA; Health & Science Technologies accounted for 38 percent of sales, 37 percent of operating income and 39 percent of EBITDA; and Fire & Safety/Diversified Products represented 23 percent of sales, 23 percent of operating income and 22 percent of EBITDA.

Corporate Costs

Corporate costs decreased to $17.2 million in the second quarter of 2020 from $19.2 million in the second quarter of 2019 primarily as a result of tightly controlling discretionary spending, restructuring savings and lower variable costs in 2020.

Debt Offering and Redemption

On April 29, 2020, the Company completed a public offering of $500.0 million 3.0% Senior Notes due May 1, 2030. The net proceeds from the offering were $494.9 million. The net proceeds were used to redeem and repay the $300.0 million 4.5% Senior Notes due December 15, 2020 and the related "make-whole" redemption premium of $6.8 million. The Company also recognized $1.6 million of deferred costs related to the 4.5% Senior Notes for a total loss on early debt redemption of $8.4 million which was recorded within Other (income) expense - net.

New Joint Venture

On May 12, 2020, a subsidiary of IDEX entered into a joint venture agreement with a third party to form a limited liability company (the "Joint Venture") that will manufacture and sell high performance elastomer seals for the oil and gas industry to customers within the Kingdom of Saudi Arabia as well as for the export market. The Company will contribute $0.6 million and will own 55% of the share capital while the third party partner will contribute $0.5 million and will own 45% of the share capital. As of June 30, 2020, the Joint Venture had not yet been funded or begun its operations. Since we will control the entity, we expect to consolidate the Joint Venture and record a noncontrolling interest in our financial statements once funding occurs and operations begin, both of which are currently expected to occur during the third quarter of 2020.

COVID-19 Impact

The Company continues to help in the fight against COVID-19 with several of our businesses playing critical roles in keeping essential activities operating. We also continue to be focused on making sure our employees are safe and our operations have the ability to deliver the products needed to support the COVID-19 battle. Most of our sites are considered essential businesses and have remained open during the pandemic. However, the virus did cause several of our sites to temporarily shut down for cleaning due to employees testing positive for COVID-19. All such sites returned to operations within a short period of time. COVID-19 and the enacted containment measures have adversely affected our business and results of operations and the businesses of our customers, who are purchasing less products in response to the economic conditions caused by COVID-19. The Company expects the months ahead will remain challenging as this global pandemic continues and, based on currently available information and management's current expectations, the Company anticipates that organic sales will be down approximately 12 to 17 percent in the third quarter of 2020. Based on management's current expectations, we believe our strong balance sheet, with over $1.5 billion of liquidity and gross leverage of 1.6 times, will provide IDEX the necessary capital to navigate the COVID-19 pandemic for the foreseeable future. Additionally, IDEX has implemented certain cost reduction actions, including employee reductions and has maintained a tight cost control environment.

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 gross profit is calculated as gross profit plus the fair value inventory step-up charge. * Adjusted gross margin is calculated as adjusted gross profit divided by net sales. * Adjusted operating income is calculated as operating income plus the fair value inventory step-up charge 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 the fair value inventory step-up charge plus restructuring expenses plus the loss on early debt redemption, 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. * Adjusted EBITDA is calculated as EBITDA plus the fair value inventory step-up charge plus restructuring expenses plus the loss on early debt redemption. * Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net sales. * 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 June 30, 2020 Six Months Ended June 30, 2020

FMT HST FSDP IDEX FMT HST FSDP IDEX

Change in (11) % (7) % (23) % (13) % (9) % (4) % (15) % (9) %net sales

- Net impactfrom 10 % 4 % - % 5 % 5 % 4 % - % 3 %acquisitions

- Impact (1) % (1) % (1) % (1) % (1) % (1) % (1) % (1) %from FX

Change inorganic net (20) % (10) % (22) % (17) % (13) % (7) % (14) % (11) %sales

Table 2: Reconciliations of Reported-to-Adjusted Gross Profit and Margin (dollars in thousands)



Three Months Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

Gross profit $ 234,800 $ 292,337 $ 506,756 $ 576,171

+ Fair valueinventory step-up 4,107 - 4,107 - charge

Adjusted gross profit $ 238,907 $ 292,337 $ 510,863 $ 576,171



Net sales $ 561,249 $ 642,099 $ 1,155,711 $ 1,264,330



Gross margin 41.8 % 45.5 % 43.8 % 45.6 %

Adjusted gross margin 42.6 % 45.5 % 44.2 % 45.6 %

Table 3: Reconciliations of Reported-to-Adjusted Operating Income and Margin (dollars in thousands)

Three Months Ended June 30,

2020 2019

FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX

Reported operating income $ 50,938 $ 48,007 $ 28,837 $ (17,188) $ 110,594 $ 74,146 $ 56,763 $ 43,614 $ (19,240) $ 155,283 (loss)

+ Restructuring expenses 1,848 1,184 641 168 3,841 930 330 819 47 2,126

+ Fair value inventory step-up 4,107 - - - 4,107 - - - - - charge

Adjusted operating income $ 56,893 $ 49,191 $ 29,478 $ (17,020) $ 118,542 $ 75,076 $ 57,093 $ 44,433 $ (19,193) $ 157,409 (loss)



Net sales (eliminations) $ 219,112 $ 215,668 $ 127,076 $ (607) $ 561,249 $ 246,189 $ 232,253 $ 164,043 $ (386) $ 642,099



Reported operating margin 23.2 % 22.3 % 22.7 % n/m 19.7 % 30.1 % 24.4 % 26.6 % n/m 24.2 %

Adjusted operating margin 26.0 % 22.8 % 23.2 % n/m 21.1 % 30.5 % 24.6 % 27.1 % n/m 24.5 %

Six Months Ended June 30,

2020 2019

FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX

Reported operating income $ 117,709 $ 100,650 $ 66,874 $ (34,698) $ 250,535 $ 146,012 $ 110,917 $ 83,942 $ (37,806) $ 303,065 (loss)

+ Restructuring expenses 1,848 1,184 641 168 3,841 930 330 819 47 2,126

+ Fair value inventory step-up 4,107 - - - 4,107 - - - - - charge

Adjusted operating income $ 123,664 $ 101,834 $ 67,515 $ (34,530) $ 258,483 $ 146,942 $ 111,247 $ 84,761 $ (37,759) $ 305,191 (loss)



Net sales (eliminations) $ 445,973 $ 439,727 $ 271,400 $ (1,389) $ 1,155,711 $ 488,711 $ 457,543 $ 320,202 $ (2,126) $ 1,264,330



Reported operating margin 26.4 % 22.9 % 24.6 % n/m 21.7 % 29.9 % 24.2 % 26.2 % n/m 24.0 %

Adjusted operating margin 27.7 % 23.2 % 24.9 % n/m 22.4 % 30.1 % 24.3 % 26.5 % n/m 24.1 %

Table 4: Reconciliations of Reported-to-Adjusted Net Income and EPS (in thousands, except EPS)



Three Months Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

Reported net income $ 70,864 $ 113,209 $ 172,862 $ 223,477

+ Restructuring expenses 3,841 2,126 3,841 2,126

+ Tax impact on (837) (560) (837) (560) restructuring expenses

+ Fair value inventory 4,107 - 4,107 - step-up charge

+ Tax impact on fair value (932) - (932) - inventory step-up charge

+ Loss on early debt 8,421 - 8,421 - redemption

+ Tax impact on loss on (1,912) - (1,912) - early debt redemption

Adjusted net income $ 83,552 $ 114,775 $ 185,550 $ 225,043



Three Months Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

Reported diluted EPS $ 0.93 $ 1.48 $ 2.27 $ 2.92

+ Restructuring expenses 0.05 0.03 0.05 0.03

+ Tax impact on (0.01) (0.01) (0.01) (0.01) restructuring expenses

+ Fair value inventory 0.05 - 0.05 - step-up charge

+ Tax impact on fair value (0.01) - (0.01) - inventory step-up charge

+ Loss on early debt 0.11 - 0.11 - redemption

+ Tax impact on loss on (0.02) - (0.02) - early debt redemption

Adjusted diluted EPS $ 1.10 $ 1.50 $ 2.44 $ 2.94



Diluted weighted average 75,937 76,387 76,198 76,334 shares outstanding

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

Three Months Ended June 30,

2020 2019

FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX

Reported operating income $ 50,938 $ 48,007 $ 28,837 $ (17,188) $ 110,594 $ 74,146 $ 56,763 $ 43,614 $ (19,240) $ 155,283 (loss)

- Other (income) expense - (82) 472 123 5,947 6,460 239 80 (140) (557) (378) net

+ Depreciation and 6,809 9,917 3,796 104 20,626 5,640 9,635 3,717 172 19,164 amortization

EBITDA 57,829 57,452 32,510 (23,031) 124,760 79,547 66,318 47,471 (18,511) 174,825

- Interest expense 12,439 11,011

- Provision for income taxes 20,831 31,441

- Depreciation and 20,626 19,164 amortization

Reported net income $ 70,864 $ 113,209



Net sales (eliminations) $ 219,112 $ 215,668 $ 127,076 $ (607) $ 561,249 $ 246,189 $ 232,253 $ 164,043 $ (386) $ 642,099



Reported operating margin 23.2 % 22.3 % 22.7 % n/m 19.7 % 30.1 % 24.4 % 26.6 % n/m 24.2 %

EBITDA margin 26.4 % 26.6 % 25.6 % n/m 22.2 % 32.3 % 28.6 % 28.9 % n/m 27.2 %

Six Months Ended June 30,

2020 2019

FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX

Reported operating income $ 117,709 $ 100,650 $ 66,874 $ (34,698) $ 250,535 $ 146,012 $ 110,917 $ 83,942 $ (37,806) $ 303,065 (loss)

- Other (income) expense - 684 (59) (192) 7,592 8,025 317 364 365 (1,564) (518) net

+ Depreciation and 12,207 20,576 7,555 285 40,623 11,146 19,142 7,179 356 37,823 amortization

EBITDA 129,232 121,285 74,621 (42,005) 283,133 156,841 129,695 90,756 (35,886) 341,406

- Interest expense 23,316 21,932

- Provision for income taxes 46,332 58,174

- Depreciation and 40,623 37,823 amortization

Reported net income $ 172,862 $ 223,477



Net sales (eliminations) $ 445,973 $ 439,727 $ 271,400 $ (1,389) $ 1,155,711 $ 488,711 $ 457,543 $ 320,202 $ (2,126) $ 1,264,330



Reported operating margin 26.4 % 22.9 % 24.6 % n/m 21.7 % 29.9 % 24.2 % 26.2 % n/m 24.0 %

EBITDA margin 29.0 % 27.6 % 27.5 % n/m 24.5 % 32.1 % 28.3 % 28.3 % n/m 27.0 %

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

Three Months Ended June 30,

2020 2019

FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX

EBITDA^(1) $ 57,829 $ 57,452 $ 32,510 $ (23,031) $ 124,760 $ 79,547 $ 66,318 $ 47,471 $ (18,511) $ 174,825

+ Restructuring expenses 1,848 1,184 641 168 3,841 930 330 819 47 2,126

+ Fair value inventory step-up 4,107 - - - 4,107 - - - - - charge

+ Loss on early debt - - - 8,421 8,421 redemption

Adjusted EBITDA $ 63,784 $ 58,636 $ 33,151 $ (14,442) $ 141,129 $ 80,477 $ 66,648 $ 48,290 $ (18,464) $ 176,951



Adjusted EBITDA margin 29.1 % 27.2 % 26.1 % n/m 25.1 % 32.7 % 28.7 % 29.4 % n/m 27.6 %

Six Months Ended June 30,

2020 2019

FMT HST FSDP Corporate IDEX FMT HST FSDP Corporate IDEX

EBITDA^(1) $ 129,232 $ 121,285 $ 74,621 $ (42,005) $ 283,133 $ 156,841 $ 129,695 $ 90,756 $ (35,886) $ 341,406

+ Restructuring expenses 1,848 1,184 641 168 3,841 930 330 819 47 2,126

+ Fair value inventory step-up 4,107 - - - 4,107 - - - - - charge

+ Loss on early debt - - - 8,421 8,421 - - - - - redemption

Adjusted EBITDA $ 135,187 $ 122,469 $ 75,262 $ (33,416) $ 299,502 $ 157,771 $ 130,025 $ 91,575 $ (35,839) $ 343,532



Adjusted EBITDA margin 30.3 % 27.9 % 27.7 % n/m 25.9 % 32.3 % 28.4 % 28.6 % n/m 27.2 %

(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 Ended Six Months Ended

June 30, March 31, June 30,

2020 2019 2020 2020 2019

Cash flowsfrom $ 169,453 $ 131,175 $ 84,760 $ 254,213 $ 219,838 operatingactivities

- Capital 8,323 12,867 12,762 21,085 25,742 expenditures

Free cash $ 161,130 $ 118,308 $ 71,998 $ 233,128 $ 194,096 flow

Conference Call to be Broadcast over the Internet

IDEX will broadcast its second quarter earnings conference call over the Internet on Friday, July 24, 2020 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 #13694805.

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 anticipated continuing effects of the coronavirus pandemic, including with respect to the Company's sales, facility closures, supply chains and access to capital, 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: the duration of the coronavirus pandemic and the continuing effects of the coronavirus 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, 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 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(r) clamp holding your side airbag safely in place. If you were ever in a car accident, a Hurst Jaws of Life(r) 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 growing IDEX Health & Science team. Founded in 1988 with three small, entrepreneurial manufacturing companies, we're proud to say that we now call 40 diverse businesses around the world part of the IDEX family. With 7,000 employees and manufacturing operations in more than 20 countries, IDEX is a high-performing, global $2+ billion company 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 Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net sales $ 561,249 $ 642,099 $ 1,155,711 $ 1,264,330

Cost of sales 326,449 349,762 648,955 688,159

Gross profit 234,800 292,337 506,756 576,171

Selling, general andadministrative 120,365 134,928 252,380 270,980 expenses

Restructuring 3,841 2,126 3,841 2,126 expenses

Operating income 110,594 155,283 250,535 303,065

Other (income) 6,460 (378) 8,025 (518) expense - net

Interest expense 12,439 11,011 23,316 21,932

Income before income 91,695 144,650 219,194 281,651 taxes

Provision for income 20,831 31,441 46,332 58,174 taxes

Net income $ 70,864 $ 113,209 $ 172,862 $ 223,477



Earnings per Common Share:

Basic earnings per $ 0.94 $ 1.50 $ 2.29 $ 2.96 common share

Diluted earnings per $ 0.93 $ 1.48 $ 2.27 $ 2.92 common share



Share Data:

Basic weightedaverage common shares 75,171 75,460 75,459 75,450 outstanding

Diluted weightedaverage common shares 75,937 76,387 76,198 76,334 outstanding

IDEX CORPORATION

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

June 30, 2020 December 31, 2019

Assets

Current assets

Cash and cash equivalents $ 746,348 $ 632,581

Receivables - net 270,255 298,186

Inventories 324,931 293,467

Other current assets 55,716 37,211

Total current assets 1,397,250 1,261,445

Property, plant and equipment - net 281,852 280,316

Goodwill and intangible assets - net 2,264,958 2,167,776

Other noncurrent assets 129,532 104,375

Total assets $ 4,073,592 $ 3,813,912



Liabilities and shareholders' equity

Current liabilities

Trade accounts payable $ 137,413 $ 138,463

Accrued expenses 225,931 180,290

Short-term borrowings 228 388

Dividends payable 37,735 38,736

Total current liabilities 401,307 357,877

Long-term borrowings 1,044,445 848,864

Other noncurrent liabilities 366,803 343,942

Total liabilities 1,812,555 1,550,683

Total shareholders' equity 2,261,037 2,263,229

Total liabilities and shareholders' equity $ 4,073,592 $ 3,813,912

IDEX CORPORATION

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Six Months Ended June 30,

2020 2019

Cash flows from operating activities

Net income $ 172,862 $ 223,477

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 20,591 19,870

Amortization of intangible assets 20,032 17,953

Amortization of debt issuance expenses 976 669

Share-based compensation expense 13,665 14,413

Deferred income taxes 2,421 10,685

Non-cash interest expense associated with forward 4,284 3,171 starting swaps

Changes in (net of the effect from acquisitions):

Receivables 34,253 (14,177)

Inventories (9,529) (21,007)

Other current assets (18,421) (12,382)

Trade accounts payable (6,842) 17,276

Accrued expenses 17,776 (39,602)

Other - net 2,145 (508)

Net cash flows provided by operating activities 254,213 219,838

Cash flows from investing activities

Purchases of property, plant and equipment (21,085) (25,742)

Acquisition of businesses, net of cash acquired (120,839) -

Proceeds from disposal of fixed assets 2,114 780

Other - net (636) 501

Net cash flows used in investing activities (140,446) (24,461)

Cash flows from financing activities

Borrowings under revolving credit facilities 150,000 -

Proceeds from issuance of 3.0% Senior Notes 499,100 -

Payment of 4.5% Senior Notes (300,000) -

Payments under revolving credit facilities (150,000) -

Payment of make-whole redemption premium (6,756) -

Debt issuance costs (4,166) -

Dividends paid (76,498) (71,283)

Proceeds from stock option exercises 13,111 20,761

Repurchases of common stock (110,342) (54,668)

Shares surrendered for tax withholding (12,148) (11,509)

Other - net (251) (1,929)

Net cash flows provided by (used in) financing 2,050 (118,628) activities

Effect of exchange rate changes on cash and cash (2,050) 33 equivalents

Net increase in cash 113,767 76,782

Cash and cash equivalents at beginning of year 632,581 466,407

Cash and cash equivalents at end of period $ 746,348 $ 543,189

IDEX CORPORATION

Company and Segment Financial Information - Reported

(dollars in thousands)

(unaudited)

Three Months Ended June Six Months Ended June 30, ^ 30, ^(a) (a)

2020 2019 2020 2019

Fluid & Metering Technologies

Net sales $ 219,112 $ 246,189 $ 445,973 $ 488,711

Operating income^ 50,938 74,146 117,709 146,012 (b)

Operating margin 23.2 % 30.1 % 26.4 % 29.9 %

EBITDA^(c) $ 57,829 $ 79,547 $ 129,232 $ 156,841

EBITDA margin^(c) 26.4 % 32.3 % 29.0 % 32.1 %

Depreciation and $ 6,809 $ 5,640 $ 12,207 $ 11,146 amortization

Capital 1,794 3,350 6,322 6,580 expenditures



Health & Science Technologies

Net sales $ 215,668 $ 232,253 $ 439,727 $ 457,543

Operating income^ 48,007 56,763 100,650 110,917 (b)

Operating margin 22.3 % 24.4 % 22.9 % 24.2 %

EBITDA^(c) $ 57,452 $ 66,318 $ 121,285 $ 129,695

EBITDA margin^(c) 26.6 % 28.6 % 27.6 % 28.3 %

Depreciation and $ 9,917 $ 9,635 $ 20,576 $ 19,142 amortization

Capital 4,955 5,913 10,284 11,217 expenditures



Fire & Safety/ Diversified Products

Net sales $ 127,076 $ 164,043 $ 271,400 $ 320,202

Operating income^ 28,837 43,614 66,874 83,942 (b)

Operating margin 22.7 % 26.6 % 24.6 % 26.2 %

EBITDA^(c) $ 32,510 $ 47,471 $ 74,621 $ 90,756

EBITDA margin^(c) 25.6 % 28.9 % 27.5 % 28.3 %

Depreciation and $ 3,796 $ 3,717 $ 7,555 $ 7,179 amortization

Capital 1,310 3,534 4,194 6,487 expenditures



Corporate Office and Eliminations

Intersegment sales $ (607) $ (386) $ (1,389) $ (2,126) eliminations

Operating income^ (17,188) (19,240) (34,698) (37,806) (b)

EBITDA^(c) (23,031) (18,511) (42,005) (35,886)

Depreciation and 104 172 285 356 amortization^ (d)

Capital 264 70 285 1,458 expenditures



Company

Net sales $ 561,249 $ 642,099 $ 1,155,711 $ 1,264,330

Operating income 110,594 155,283 250,535 303,065

Operating margin 19.7 % 24.2 % 21.7 % 24.0 %

EBITDA^(c) $ 124,760 $ 174,825 $ 283,133 $ 341,406

EBITDA margin^(c) 22.2 % 27.2 % 24.5 % 27.0 %

Depreciation and $ 20,626 $ 19,164 $ 40,623 $ 37,823 amortization^ (d)

Capital 8,323 12,867 21,085 25,742 expenditures



IDEX CORPORATION

Company and Segment Financial Information - Adjusted (Non-GAAP)

(dollars in thousands)

(unaudited)

Three Months Ended Six Months Ended June 30, ^(a) June 30, ^(a)

2020 2019 2020 2019

Fluid & Metering Technologies

Net sales $ 219,112 $ 246,189 $ 445,973 $ 488,711

Adjusted operating 56,893 75,076 123,664 146,942 income^ (b)(c)

Adjusted operating 26.0 % 30.5 % 27.7 % 30.1 % margin^(c)

Adjusted EBITDA^(c) $ 63,784 $ 80,477 $ 135,187 $ 157,771

Adjusted EBITDA 29.1 % 32.7 % 30.3 % 32.3 % margin^(c)

Depreciation and $ 6,809 $ 5,640 $ 12,207 $ 11,146 amortization

Capital 1,794 3,350 6,322 6,580 expenditures



Health & Science Technologies

Net sales $ 215,668 $ 232,253 $ 439,727 $ 457,543

Adjusted operating 49,191 57,093 101,834 111,247 income^ (b)(c)

Adjusted operating 22.8 % 24.6 % 23.2 % 24.3 % margin^(c)

Adjusted EBITDA^(c) $ 58,636 $ 66,648 $ 122,469 $ 130,025

Adjusted EBITDA 27.2 % 28.7 % 27.9 % 28.4 % margin^(c)

Depreciation and $ 9,917 $ 9,635 $ 20,576 $ 19,142 amortization

Capital 4,955 5,913 10,284 11,217 expenditures



Fire & Safety/ Diversified Products

Net sales $ 127,076 $ 164,043 $ 271,400 $ 320,202

Adjusted operating 29,478 44,433 67,515 84,761 income^ (b)(c)

Adjusted operating 23.2 % 27.1 % 24.9 % 26.5 % margin^(c)

Adjusted EBITDA^(c) $ 33,151 $ 48,290 $ 75,262 $ 91,575

Adjusted EBITDA 26.1 % 29.4 % 27.7 % 28.6 % margin^(c)

Depreciation and $ 3,796 $ 3,717 $ 7,555 $ 7,179 amortization

Capital 1,310 3,534 4,194 6,487 expenditures



Corporate Office and Eliminations

Intersegment sales $ (607) $ (386) $ (1,389) $ (2,126) eliminations

Adjusted operating (17,020) (19,193) (34,530) (37,759) income^ (b)(c)

Adjusted EBITDA^(c) (14,442) (18,464) (33,416) (35,839)

Depreciation and 104 172 285 356 amortization^(d)

Capital 264 70 285 1,458 expenditures



Company

Net sales $ 561,249 $ 642,099 $ 1,155,711 $ 1,264,330

Adjusted operating 118,542 157,409 258,483 305,191 income^(c)

Adjusted operating 21.1 % 24.5 % 22.4 % 24.1 % margin^(c)

Adjusted EBITDA^(c) $ 141,129 $ 176,951 $ 299,502 $ 343,532

Adjusted EBITDA 25.1 % 27.6 % 25.9 % 27.2 % margin^(c)

Depreciation and $ 20,626 $ 19,164 $ 40,623 $ 37,823 amortization^ (d)

Capital 8,323 12,867 21,085 25,742 expenditures

Three and six month data includes the results of the Velcora acquisition(a) (July 2019) in the Health & Science Technologies segment and the Flow MD acquisition (February 2020) in the Fluid & Metering Technologies segment.

(b) Segment operating income excludes unallocated corporate operating expenses which are included in Corporate Office and Eliminations.

These are non-GAAP financial measures. For a reconciliation of these(c) 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200723005901/en/

CONTACT: Investor Contact: William K. Grogan Senior Vice President and Chief Financial Officer (847) 498-7070