Second Quarter 2023
Highlights
(All comparisons are against the second quarter of 2022 unless
otherwise noted)
- Record sales of $846.2 million, up 6% overall and 3%
organically
- Reported EPS of $1.82, up 1% and record adjusted EPS of $2.18,
up 8%
- Strong operating cash flow of $141 million, up 26%; free cash
flow of $120 million, up 24%
- Completed acquisition of Iridian Spectral Technologies on May
19, 2023
IDEX Corporation (NYSE: IEX) today announced its financial
results for the three month period ended June 30, 2023.
“IDEX achieved record sales and adjusted earnings per share in
the second quarter,” said Eric D. Ashleman, IDEX Corporation Chief
Executive Officer and President. “Our view on core IDEX industrial
markets continues to hold as inventory and backlog recalibrates in
line with our supply chain improvements and lead time reductions.
Our Fluid & Metering and Fire & Safety / Diversified
Products businesses delivered strong organic growth and
profitability within this environment.”
“Our businesses within our Health & Science Technologies
segment remained challenged, impacted by customers' sharp inventory
recalibration and demand softness after two years of double-digit
growth. At this point we no longer expect market recovery within
the second half of the year. Our teams are appropriately balanced
as they execute targeted cost reductions to mitigate a portion of
these volume declines, drive strong cash flow overall, and continue
to innovate for our customers.”
"Regardless of macroeconomic fluctuations, we remain focused on
initiatives to drive long-term growth. IDEX continues to be well
positioned in markets with strong secular growth trends and
critical technologies that enable above-market performance over an
economic cycle. Our balance sheet is strong and provides ample
capacity to fund our disciplined capital deployment strategy."
2023 Outlook Full year 2023
organic sales are projected to decline 1 to 2 percent over the
prior year, with GAAP EPS of $6.80 - $6.90 (adjusted EPS of $7.90 -
$8.00).
Third quarter 2023 organic sales are projected to decline 7 to 8
percent over the prior year period, with GAAP EPS of $1.60 - $1.65
(adjusted EPS of $1.84 - $1.89).
Consolidated Results
Three Months Ended June
30,
(Dollars in millions, except per share
amounts)
2023
2022
Increase
(Decrease)
Net sales
$
846.2
$
796.1
$
50.1
Organic net sales growth*
3
%
Gross profit
378.0
356.9
21.1
Adjusted gross profit*
378.0
357.3
20.7
Net income attributable to IDEX
138.6
138.2
0.4
Adjusted net income attributable to
IDEX*
165.4
153.6
11.8
Adjusted EBITDA*
240.7
219.2
21.5
Diluted EPS attributable to
IDEX
1.82
1.81
0.01
Adjusted diluted EPS attributable to
IDEX*
2.18
2.02
0.16
Cash flows from operating
activities
141.2
112.3
28.9
Free cash flow*
119.6
96.7
22.9
Gross margin
44.7
%
44.8
%
(10) bps
Adjusted gross margin*
44.7
%
44.9
%
(20) bps
Net income margin
16.4
%
17.3
%
(90) bps
Adjusted EBITDA margin*
28.4
%
27.5
%
90 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.
Orders Second quarter 2023 orders
of $765.9 million reflected a 9 percent decrease compared with the
prior year period (-13 percent organic and +4 percent
acquisitions/divestitures).
Net Sales Second quarter 2023 net
sales of $846.2 million reflected a 6 percent increase compared
with the prior year period (+3 percent organic, +4 percent
acquisitions/divestitures and -1 percent foreign currency
translation).
Gross Margin Second quarter 2023
gross margin of 44.7 percent decreased 10 basis points compared
with the prior year period primarily due to lower volume leverage,
the dilutive impact of acquisitions and unfavorable mix, partially
offset by strong price/cost and favorable operational productivity,
net of higher employee-related costs.
Net Income and Earnings per Share
Attributable to IDEX Second quarter 2023 net income
attributable to IDEX increased $0.4 million to $138.6 million,
which resulted in EPS attributable to IDEX of $1.82 per share, an
increase of 1 cent per share, or 1 percent, from the prior year
period. The second quarter 2023 effective tax rate of 22.4 percent
was relatively consistent compared with the second quarter 2022
effective tax rate of 22.1 percent. Adjusted EPS attributable to
IDEX, which reflects the impact of non-GAAP adjustments, net of
related taxes, was $2.18 per share, an increase of 16 cents per
share, or 8 percent, from the prior year period.
Net Income Margin and Adjusted EBITDA
Margin Second quarter 2023 net income margin of 16.4 percent
decreased 90 basis points compared with the prior year period. The
decrease was driven by a reserve recorded on an investment with a
collaborative partner, higher amortization on new acquisitions and
higher interest expense, partially offset by operational
performance discussed below. Second quarter 2023 Adjusted EBITDA
margin of 28.4 percent, which reflects the impact of non-GAAP
adjustments, increased 90 basis points compared with the prior year
period driven by strong price/cost, operational productivity and
lower variable compensation costs, partially offset by lower volume
leverage, higher employee-related costs and unfavorable mix.
Cash Flow Second quarter 2023 cash
from operations of $141.2 million was up 26 percent primarily due
to lower investments in working capital in 2023 as compared with
2022. Second quarter 2023 free cash flow included higher capital
expenditures and was $119.6 million, up 24 percent compared with
the prior year period and constituted 72 percent of adjusted net
income attributable to IDEX.
Segment Highlights
Fluid & Metering Technologies ("FMT")
Three Months Ended June
30,
(Dollars in millions)
2023
2022
Increase
(Decrease)
Net sales
$
325.1
$
299.9
$
25.2
Adjusted EBITDA
114.1
95.0
19.1
Adjusted EBITDA margin
35.1
%
31.7
%
340 bps
- Second quarter 2023 net sales of $325.1 million reflected an 8
percent increase compared with the second quarter of 2022 (+10
percent organic, -1 percent acquisitions/divestitures and -1
percent foreign currency translation).
- Second quarter 2023 Adjusted EBITDA margin was 35.1%, up 340
basis points compared with the prior year period primarily due to
strong price/cost, higher volume leverage, lower discretionary
spending, favorable operational productivity and the accretive
impact of acquisitions, net of divestitures, partially offset by
higher employee-related costs and unfavorable mix.
Health & Science Technologies ("HST")
Three Months Ended June
30,
(Dollars in millions)
2023
2022
Increase
(Decrease)
Net sales
$
339.5
$
326.0
$
13.5
Adjusted EBITDA
93.7
103.6
(9.9
)
Adjusted EBITDA margin
27.6
%
31.8
%
(420) bps
- Second quarter 2023 net sales of $339.5 million reflected a 4
percent increase compared with the second quarter of 2022 (-6
percent organic and +10 percent acquisitions).
- Second quarter 2023 Adjusted EBITDA margin was 27.6%, down 420
basis points compared with the prior year period primarily due to
unfavorable volume leverage, higher employee-related costs and
unfavorable mix, partially offset by strong price/cost as well as
lower discretionary spending and lower variable compensation
costs.
Fire & Safety/Diversified Products ("FSDP")
Three Months Ended June
30,
(Dollars in millions)
2023
2022
Increase
(Decrease)
Net sales
$
184.8
$
171.2
$
13.6
Adjusted EBITDA
54.5
45.1
9.4
Adjusted EBITDA margin
29.4
%
26.4
%
300 bps
- Second quarter 2023 net sales of $184.8 million reflected an 8
percent increase compared with the second quarter of 2022 (+8
percent organic).
- Second quarter 2023 Adjusted EBITDA margin was 29.4%, up 300
basis points compared with the prior year period primarily due to
strong price/cost, favorable mix, lower variable compensation
costs, higher volume leverage and favorable operational
productivity, net of higher employee-related costs.
Corporate Costs Corporate
costs included in consolidated Adjusted EBITDA were $21.6 million
in the second quarter of 2023, a decrease of $2.9 million compared
with the prior year period as a result of lower compensation
costs.
Debt Offering and Redemption
On June 13, 2023, the Company completed a private placement of a
$100.0 million aggregate principal amount of 5.13% Senior Notes due
June 13, 2028. The Company used the proceeds from this Notes
issuance to repay the $100.0 million 3.20% Senior Notes due June
13, 2023.
Acquisition On May 19, 2023,
the Company completed the acquisition of Iridian Spectral
Technologies ("Iridian"). Iridian is a global leader in designing
and manufacturing thin-film, multi-layer optical filters serving
the laser communications, telecommunications and life sciences
markets and expands the Company’s array of optical technology
offerings. Headquartered in Ottawa, Ontario, Canada, Iridian
operates in the Company’s Scientific Fluidics & Optics
reporting unit within the HST segment. Iridian was acquired for
cash consideration of $110.3 million. The entire purchase price was
funded with cash on hand.
Conference Call to be Broadcast over
the Internet IDEX will broadcast its second quarter
earnings conference call over the Internet on Thursday, July 27,
2023 at 9:30 a.m. CT. Chief Executive Officer and President Eric
Ashleman and Senior Vice President and Chief Financial Officer
William Grogan will discuss the Company’s recent financial
performance and respond to questions from the financial analyst
community. IDEX invites interested investors to listen to the call
and view the accompanying slide presentation, which will be carried
live on its website at www.idexcorp.com. Those who wish to participate
should log on several minutes before the discussion begins. After
clicking on the presentation icon, investors should follow the
instructions to ensure their systems are set up to hear the event
and view the presentation slides or download the correct
applications at no charge. Investors will also be able to hear a
replay of the call by dialing 877.660.6853 (or 201.612.7415 for
international participants) using the ID #13734463.
Forward-Looking Statements
This news release contains “forward-looking” statements within the
meaning of the Private Securities Litigation Reform Act of 1995, as
amended. These statements may relate to, among other things, the
Company’s third quarter 2023 and full year 2023 outlook including
expected organic sales projections, expected earnings per share and
adjusted earnings per share, and the assumptions underlying these
expectations, anticipated future acquisition behavior, availability
of cash and financing alternatives and the anticipated benefits of
the Company’s recent acquisitions, including the acquisitions of
Nexsight, LLC and its businesses Envirosight, WinCan, MyTana and
Pipeline Renewal Technologies (“Nexsight”), KZ CO. ("KZValve"),
Muon B.V. and its subsidiaries ("Muon Group") and Iridian Spectral
Technologies ("Iridian"), and are indicated by words or phrases
such as “anticipates,” “estimates,” “plans,” “guidance,” “expects,”
“projects,” “forecasts,” “should,” “could,” “will,” “management
believes,” “the Company believes,” “the Company intends” and
similar words or phrases. These statements are subject to inherent
uncertainties and risks that could cause actual results to differ
materially from those anticipated at the date of this news
release.
The risks and uncertainties include, but are not limited to, the
following: levels of industrial activity and economic conditions in
the U.S. and other countries around the world, including
uncertainties in the financial markets and adverse developments
affecting the financial services industry; pricing pressures,
including inflation and rising interest rates, and other
competitive factors and levels of capital spending in certain
industries, all of which could have a material impact on order
rates and the Company’s results; the impact of health epidemics and
pandemics and terrorist attacks and wars, which could have an
adverse impact on the Company's business by creating disruptions in
the global supply chain and by potentially having an adverse impact
on the global economy; 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;
capacity utilization and the effect this has on costs; labor
markets; supply chain conditions; market conditions and material
costs; risks related to environmental, social and corporate
governance issues, including those related to climate change and
sustainability; 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 Securities and Exchange Commission (“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 (NYSE: IEX)
makes thousands of products and mission-critical components that
improve everyday life all around you. If you enjoy chocolate, it
quite possibly passed through a Viking® internal gear pump at the
candy factory. If you were ever in a car accident, emergency
workers may have used the Hurst Jaws of Life® rescue tool to save
your life. If your doctor ordered a DNA test to predict your risk
of disease or determine a course of treatment, the lab may have
used equipment containing components made by IDEX Health &
Science. Founded in 1988 with three small, entrepreneurial
manufacturing companies, we’re proud to say that we now call over
50 diverse businesses around the world part of the IDEX family.
With more than 8,500 employees and manufacturing operations in more
than 20 countries, IDEX is a high-performing, global company with
over $3.1 billion in annual sales, committed to making trusted
solutions that improve lives. IDEX shares are traded on the New
York Stock Exchange under the symbol “IEX.” For further information
on IDEX Corporation and its business units, visit the company’s
website at www.idexcorp.com.
(Financial reports follow)
IDEX CORPORATION Condensed
Consolidated Statements of Income (in millions, except per share
amounts) (unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net sales
$
846.2
$
796.1
$
1,691.6
$
1,547.2
Cost of sales
468.2
439.2
931.1
847.8
Gross profit
378.0
356.9
760.5
699.4
Selling, general and administrative
expenses
174.3
167.5
364.0
321.8
Restructuring expenses and asset
impairments
3.6
2.8
4.1
3.4
Operating income
200.1
186.6
392.4
374.2
Other expense (income) - net
8.3
—
7.7
(2.3
)
Interest expense
13.3
9.5
26.4
19.0
Income before income taxes
178.5
177.1
358.3
357.5
Provision for income taxes
40.0
39.0
80.0
79.5
Net income
138.5
138.1
278.3
278.0
Net loss attributable to noncontrolling
interest
0.1
0.1
0.1
0.2
Net income attributable to IDEX
$
138.6
$
138.2
$
278.4
$
278.2
Earnings per Common Share:
Basic earnings per common share
attributable to IDEX
$
1.83
$
1.82
$
3.68
$
3.66
Diluted earnings per common share
attributable to IDEX
$
1.82
$
1.81
$
3.66
$
3.65
Share Data:
Basic weighted average common shares
outstanding
75.6
75.8
75.6
76.0
Diluted weighted average common shares
outstanding
75.9
76.1
75.9
76.2
IDEX CORPORATION Condensed
Consolidated Balance Sheets (in millions) (unaudited)
June 30, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
457.0
$
430.2
Receivables - net
455.2
442.8
Inventories
482.5
470.9
Other current assets
93.2
55.4
Total current assets
1,487.9
1,399.3
Property, plant and equipment -
net
421.6
382.1
Goodwill and intangible assets
3,671.7
3,585.9
Other noncurrent assets
138.7
144.6
Total assets
$
5,719.9
$
5,511.9
Liabilities and equity
Current liabilities
Trade accounts payable
$
189.7
$
208.9
Accrued expenses
247.9
289.1
Short-term borrowings
0.5
—
Dividends payable
48.5
45.6
Total current liabilities
486.6
543.6
Long-term borrowings
1,471.5
1,468.7
Other noncurrent liabilities
482.9
460.0
Total liabilities
2,441.0
2,472.3
Shareholders' equity
3,278.7
3,039.3
Noncontrolling interest
0.2
0.3
Total equity
3,278.9
3,039.6
Total liabilities and equity
$
5,719.9
$
5,511.9
IDEX CORPORATION Condensed
Consolidated Statements of Cash Flows (in millions)
(unaudited)
Six Months Ended June
30,
2023
2022
Cash flows from operating
activities
Net income
$
278.3
$
278.0
Adjustments to reconcile net income to
net cash provided by operating activities:
Gains on sales of assets
(0.2
)
(2.6
)
Asset impairments
0.5
0.2
Credit loss on note receivable from
collaborative partner
7.7
—
Depreciation
27.2
24.7
Amortization of intangible
assets
46.8
32.2
Amortization of debt issuance
expenses
0.8
0.8
Share-based compensation
expense
17.0
13.5
Deferred income taxes
—
(0.2
)
Changes in (net of the effect from
acquisitions and foreign exchange):
Receivables
(5.8
)
(68.7
)
Inventories
(2.0
)
(84.5
)
Other current assets
(18.6
)
(17.8
)
Trade accounts payable
(17.9
)
36.2
Deferred revenue
4.2
1.3
Accrued expenses
(52.5
)
(22.5
)
Other - net
3.6
1.4
Net cash flows provided by operating
activities
289.1
192.0
Cash flows from investing
activities
Purchases of property, plant and
equipment
(48.2
)
(31.7
)
Acquisition of businesses, net of cash
acquired
(110.3
)
(234.9
)
Proceeds from disposal of fixed
assets
1.3
6.6
Purchases of marketable
securities
(19.1
)
—
Other - net
(0.3
)
(0.1
)
Net cash flows used in investing
activities
(176.6
)
(260.1
)
Cash flows from financing
activities
Proceeds from issuance of 5.13% Senior
Notes
100.0
—
Payment of 3.20% Senior Notes
(100.0
)
—
Dividends paid
(93.9
)
(86.9
)
Proceeds from stock option
exercises
8.0
5.2
Repurchases of common stock
(1.0
)
(110.4
)
Shares surrendered for tax
withholding
(4.6
)
(4.9
)
Other - net
(0.5
)
(0.1
)
Net cash flows used in financing
activities
(92.0
)
(197.1
)
Effect of exchange rate changes on cash
and cash equivalents
6.3
(32.4
)
Net increase (decrease) in cash and
cash equivalents
26.8
(297.6
)
Cash and cash equivalents at beginning
of year
430.2
855.4
Cash and cash equivalents at end of
period
$
457.0
$
557.8
IDEX CORPORATION Company
and Segment Financial Information (dollars in millions)
(unaudited)
Three Months Ended
June 30, (a)
Six Months Ended
June 30, (a)
2023
2022
2023
2022
Fluid & Metering
Technologies
Net sales
$
325.1
$
299.9
$
646.9
$
571.9
Adjusted EBITDA(b)
114.1
95.0
220.3
183.4
Adjusted EBITDA margin
35.1
%
31.7
%
34.1
%
32.1
%
Depreciation
4.1
4.2
7.2
8.1
Amortization of intangible
assets
5.7
5.6
11.7
9.3
Capital expenditures
5.6
4.8
13.0
9.7
Health & Science
Technologies
Net sales
$
339.5
$
326.0
$
690.5
$
641.2
Adjusted EBITDA(b)
93.7
103.6
194.4
203.4
Adjusted EBITDA margin
27.6
%
31.8
%
28.2
%
31.7
%
Depreciation
7.8
6.1
15.1
12.2
Amortization of intangible
assets
15.9
9.7
31.8
19.6
Capital expenditures
12.6
7.3
28.7
16.5
Fire & Safety/Diversified
Products
Net sales
$
184.8
$
171.2
$
359.2
$
335.9
Adjusted EBITDA(b)
54.5
45.1
104.2
89.5
Adjusted EBITDA margin
29.4
%
26.4
%
29.0
%
26.6
%
Depreciation
2.3
2.1
4.4
4.2
Amortization of intangible
assets
1.6
1.6
3.3
3.3
Capital expenditures
3.0
3.3
5.9
5.3
Corporate Office and
Eliminations
Intersegment sales eliminations
$
(3.2
)
$
(1.0
)
$
(5.0
)
$
(1.8
)
Adjusted EBITDA(b)
(21.6
)
(24.5
)
(48.4
)
(42.4
)
Depreciation
0.2
0.1
0.5
0.2
Capital expenditures
0.4
0.2
0.6
0.2
Company
Net sales
$
846.2
$
796.1
$
1,691.6
$
1,547.2
Adjusted EBITDA(c)
240.7
219.2
470.5
433.9
Adjusted EBITDA margin(c)
28.4
%
27.5
%
27.8
%
28.0
%
Depreciation
14.4
12.5
27.2
24.7
Amortization of intangible
assets
23.2
16.9
46.8
32.2
Capital expenditures
21.6
15.6
48.2
31.7
(a)
Three and six month data includes the
results of the KZValve acquisition (May 2022) and the Nexsight
acquisition (February 2022) in the FMT segment as well as the
Iridian acquisition (May 2023) and Muon Group acquisition (November
2022) in the HST segment from the date of acquisition. Three and
six month data also includes the results of Knight LLC ("Knight")
(September 2022) in the FMT segment through the date of
disposition.
(b)
Segment Adjusted EBITDA excludes
unallocated corporate costs which are included in Corporate Office
and Eliminations.
(c)
These are non-GAAP financial measures. For
a reconciliation of these non-GAAP financial measures to their most
directly comparable measure calculated and presented in accordance
with GAAP, see the reconciliation tables below.
Non-GAAP Measures of Financial
Performance The Company prepares its public financial
statements in conformity with accounting principles generally
accepted in the United States of America (GAAP). The Company
supplements certain GAAP financial performance metrics with
non-GAAP financial performance metrics. Management believes these
non-GAAP financial performance metrics provide investors with
greater insight, transparency and a more comprehensive
understanding of the financial information used by management in
its financial and operational decision making because certain of
these adjusted metrics exclude items not reflective of ongoing
operations, as identified in the reconciliations below.
Reconciliations of non-GAAP financial performance metrics to their
most directly comparable GAAP financial performance metrics are
defined and presented below and should not be considered a
substitute for, nor superior to, the financial data prepared in
accordance with GAAP. Due to rounding, numbers presented throughout
this and other documents may not add up or recalculate precisely.
There were no adjustments to GAAP financial performance metrics
other than the items noted below.
- Organic orders and net sales are calculated excluding amounts
from acquired or divested businesses during the first twelve months
of ownership or prior to divestiture and the impact of foreign
currency translation.
- Adjusted gross profit is calculated as gross profit plus fair
value inventory step-up charges.
- Adjusted gross margin is calculated as adjusted gross profit
divided by net sales.
- Adjusted net income attributable to IDEX is calculated as Net
income attributable to IDEX plus restructuring expenses and asset
impairments, plus fair value inventory step-up charges, less gains
on sales of assets, plus the credit loss on a note receivable from
a collaborative partner, plus acquisition-related intangible asset
amortization, all net of the statutory tax expense or benefit.
- Adjusted diluted EPS attributable to IDEX is calculated as
adjusted net income attributable to IDEX divided by the diluted
weighted average shares outstanding.
- Consolidated Adjusted EBITDA is calculated as consolidated
earnings before interest, taxes, depreciation and amortization, or
consolidated EBITDA, plus fair value inventory step-up charges,
plus restructuring expenses and asset impairments, less gains on
sales of assets, plus the credit loss on a note receivable from a
collaborative partner.
- Consolidated Adjusted EBITDA margin is calculated as
Consolidated Adjusted EBITDA divided by Net sales.
- Free cash flow is calculated as cash flows from operating
activities less capital expenditures.
Table 1: Reconciliations of the Change in Net Sales to
Organic Net Sales
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
FMT
HST
FSDP
IDEX
FMT
HST
FSDP
IDEX
Change in net sales
8
%
4
%
8
%
6
%
13
%
8
%
7
%
9
%
- Net impact from
acquisitions/divestitures
(1
%)
10
%
—
4
%
4
%
11
%
—
6
%
- Impact from foreign currency
(1
%)
—
—
(1
%)
(1
%)
(1
%)
(2
%)
(1
%)
Change in organic net sales
10
%
(6
%)
8
%
3
%
10
%
(2
%)
9
%
4
%
Table 2: Reconciliations of Reported-to-Adjusted Gross Profit
and Margin
Three Months Ended June
30,
Six Months Ended June
30,
(Dollars in millions)
2023
2022
2023
2022
Gross profit
$
378.0
$
356.9
$
760.5
$
699.4
+ Fair value inventory step-up
charges
—
0.4
—
0.4
Adjusted gross profit
$
378.0
$
357.3
$
760.5
$
699.8
Net sales
$
846.2
$
796.1
$
1,691.6
$
1,547.2
Gross margin
44.7
%
44.8
%
45.0
%
45.2
%
Adjusted gross margin
44.7
%
44.9
%
45.0
%
45.2
%
Table 3: Reconciliations of Reported-to-Adjusted Net Income
and Diluted EPS
Three Months Ended June
30,
Six Months Ended June
30,
(In millions)
2023
2022
2023
2022
Reported net income attributable to
IDEX
$
138.6
$
138.2
$
278.4
$
278.2
+ Restructuring expenses and asset
impairments
3.6
2.8
4.1
2.8
+ Tax impact on restructuring expenses
and asset impairments
(0.8
)
(0.7
)
(0.9
)
(0.7
)
+ Fair value inventory step-up
charges
—
0.4
—
0.4
+ Tax impact on fair value inventory
step-up charges
—
(0.1
)
—
(0.1
)
- Gains on sales of assets
—
—
—
(2.7
)
+ Tax impact on gains on sales of
assets
—
—
—
0.6
+ Credit loss on note receivable from
collaborative partner(1)
7.7
—
7.7
—
+ Tax impact on credit loss on note
receivable from collaborative partner
(1.6
)
—
(1.6
)
—
+ Acquisition-related intangible asset
amortization
23.2
16.9
46.8
32.2
+ Tax impact on acquisition-related
intangible asset amortization
(5.3
)
(3.9
)
(10.5
)
(7.3
)
Adjusted net income attributable to
IDEX
$
165.4
$
153.6
$
324.0
$
303.4
(1) Represents a reserve recorded on an
investment with a collaborative partner that may no longer be
recoverable.
Table 3: Reconciliations of Reported-to-Adjusted Net Income
and Diluted EPS (Continued)
Three Months Ended June
30,
Six Months Ended June
30,
(In millions, except per share
amounts)
2023
2022
2023
2022
Reported diluted EPS attributable to
IDEX
$
1.82
$
1.81
$
3.66
$
3.65
+ Restructuring expenses and asset
impairments
0.05
0.04
0.06
0.04
+ Tax impact on restructuring expenses
and asset impairments
(0.01
)
(0.01
)
(0.01
)
(0.01
)
+ Fair value inventory step-up
charges
—
—
—
—
+ Tax impact on fair value inventory
step-up charges
—
—
—
—
- Gains on sales of assets
—
—
—
(0.03
)
+ Tax impact on gains on sales of
assets
—
—
—
0.01
+ Credit loss on note receivable from
collaborative partner(1)
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
0.22
0.62
0.42
+ Tax impact on acquisition-related
intangible asset amortization
(0.07
)
(0.04
)
(0.14
)
(0.10
)
Adjusted diluted EPS attributable to
IDEX
$
2.18
$
2.02
$
4.27
$
3.98
Diluted weighted average shares
outstanding
75.9
76.1
75.9
76.2
(1) Represents a reserve recorded on an
investment with a collaborative partner that may no longer be
recoverable.
Table 4: Reconciliations of Net Income to Adjusted
EBITDA
Three Months Ended June
30,
2023
2022
(Dollars in millions)
FMT
HST
FSDP
Corporate
IDEX
FMT
HST
FSDP
Corporate
IDEX
Reported net income
$
—
$
—
$
—
$
—
$
138.5
$
—
$
—
$
—
$
—
$
138.1
+ Provision for income taxes
—
—
—
—
40.0
—
—
—
—
39.0
+ Interest expense
—
—
—
—
13.3
—
—
—
—
9.5
- Other income (expense) - net
—
—
—
—
(8.3
)
—
—
—
—
—
Operating income (loss)
103.3
67.5
50.6
(21.3
)
200.1
82.9
86.5
39.9
(22.7
)
186.6
+ Other income (expense) - net
0.4
(0.2
)
(0.3
)
(8.2
)
(8.3
)
0.2
1.2
0.5
(1.9
)
—
+ Depreciation
4.1
7.8
2.3
0.2
14.4
4.2
6.1
2.1
0.1
12.5
+ Amortization
5.7
15.9
1.6
—
23.2
5.6
9.7
1.6
—
16.9
+ Fair value inventory step-up
charges
—
—
—
—
—
0.4
—
—
—
0.4
+ Restructuring expenses and asset
impairments
0.6
2.7
0.3
—
3.6
1.7
0.1
1.0
—
2.8
+ Credit loss on note receivable from
collaborative partner(1)
—
—
—
7.7
7.7
—
—
—
—
—
Adjusted EBITDA
$
114.1
$
93.7
$
54.5
$
(21.6
)
$
240.7
$
95.0
$
103.6
$
45.1
$
(24.5
)
$
219.2
Net sales (eliminations)
$
325.1
$
339.5
$
184.8
$
(3.2
)
$
846.2
$
299.9
$
326.0
$
171.2
$
(1.0
)
$
796.1
Net income margin
16.4
%
17.3
%
Adjusted EBITDA margin
35.1
%
27.6
%
29.4
%
n/m
28.4
%
31.7
%
31.8
%
26.4
%
n/m
27.5
%
(1) Represents a reserve recorded on an
investment with a collaborative partner that may no longer be
recoverable.
Table 4: Reconciliations of Net Income to Adjusted EBITDA
(Continued)
Six Months Ended June
30,
2023
2022
(Dollars in millions)
FMT
HST
FSDP
Corporate
IDEX
FMT
HST
FSDP
Corporate
IDEX
Reported net income
$
—
$
—
$
—
$
—
$
278.3
$
—
$
—
$
—
$
—
$
278.0
+ Provision for income taxes
—
—
—
—
80.0
—
—
—
—
79.5
+ Interest expense
—
—
—
—
26.4
—
—
—
—
19.0
- Other income (expense) - net
—
—
—
—
(7.7
)
—
—
—
—
2.3
Operating income (loss)
199.8
145.0
96.6
(49.0
)
392.4
163.3
170.1
80.4
(39.6
)
374.2
+ Other income (expense) - net
0.9
(0.5
)
(0.5
)
(7.6
)
(7.7
)
1.8
1.4
2.1
(3.0
)
2.3
+ Depreciation
7.2
15.1
4.4
0.5
27.2
8.1
12.2
4.2
0.2
24.7
+ Amortization
11.7
31.8
3.3
—
46.8
9.3
19.6
3.3
—
32.2
+ Fair value inventory step-up
charges
—
—
—
—
—
0.4
—
—
—
0.4
+ Restructuring expenses and asset
impairments
0.7
3.0
0.4
—
4.1
1.7
0.1
1.0
—
2.8
- Gains on sales of assets
—
—
—
—
—
(1.2
)
—
(1.5
)
—
(2.7
)
+ Credit loss on note receivable from
collaborative partner(1)
—
—
—
7.7
7.7
—
—
—
—
—
Adjusted EBITDA
$
220.3
$
194.4
$
104.2
$
(48.4
)
$
470.5
$
183.4
$
203.4
$
89.5
$
(42.4
)
$
433.9
Net sales (eliminations)
$
646.9
$
690.5
$
359.2
$
(5.0
)
$
1,691.6
$
571.9
$
641.2
$
335.9
$
(1.8
)
$
1,547.2
Net income margin
16.4
%
18.0
%
Adjusted EBITDA margin
34.1
%
28.2
%
29.0
%
n/m
27.8
%
32.1
%
31.7
%
26.6
%
n/m
28.0
%
(1) Represents a reserve recorded on an
investment with a collaborative partner that may no longer be
recoverable
Table 5: Reconciliations of Cash Flows from Operating
Activities to Free Cash Flow
Three Months Ended June
30,
Six Months Ended June
30,
(Dollars in millions)
2023
2022
2023
2022
Cash flows from operating
activities
$
141.2
$
112.3
$
289.1
$
192.0
- Capital expenditures
21.6
15.6
48.2
31.7
Free cash flow
$
119.6
$
96.7
$
240.9
$
160.3
Table 6: Reconciliation of Estimated 2023 EPS to Adjusted EPS
Attributable to IDEX
Guidance
Third Quarter 2023
Full Year 2023
Estimated diluted EPS attributable to
IDEX
$1.60 - $1.65
$6.80 - $6.90
+ Restructuring expenses and asset
impairments
—
0.06
+ Tax impact on restructuring expenses
and asset impairments
—
(0.01)
+ Credit loss on note receivable from
collaborative partner(1)
—
0.10
+ Tax impact on credit loss on note
receivable from collaborative partner
—
(0.02)
+ Acquisition-related intangible asset
amortization
0.32
1.26
+ Tax impact on acquisition-related
intangible asset amortization
(0.08)
(0.29)
Estimated adjusted diluted EPS
attributable to IDEX
$1.84 - $1.89
$7.90 - $8.00
(1) Represents a reserve recorded on an
investment with a collaborative partner that may no longer be
recoverable.
Table 7: Reconciliation of Estimated 2023 Net Income to
Adjusted EBITDA
Guidance
Third Quarter 2023
Full Year 2023
(Dollars in millions)
Low End
High End
Low End
High End
Reported net income
$
121.3
$
124.5
$
516.6
$
524.1
+ Provision for income taxes
35.0
36.0
148.8
151.0
+ Interest expense
14.0
14.0
54.4
54.4
+ Depreciation
15.8
15.8
59.2
59.2
+ Amortization of intangible
assets
24.1
24.1
94.9
94.9
+ Restructuring expenses and asset
impairments
—
—
4.1
4.1
+ Credit loss on note receivable from
collaborative partner(1)
—
—
7.7
7.7
Adjusted EBITDA
$
210.2
$
214.4
$
885.7
$
895.4
Net sales
$
785.7
$
795.2
$
3,264.1
$
3,284.6
Net income margin
15
%
16
%
16
%
16
%
Adjusted EBITDA margin
27
%
27
%
27
%
27
%
(1) Represents a reserve recorded on an
investment with a collaborative partner that may no longer be
recoverable.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726554040/en/
Investor Contact: Allison S. Lausas Vice President and
Chief Accounting Officer (847) 498-7070
IDEX (NYSE:IEX)
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IDEX (NYSE:IEX)
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