U.S. Markets close in 1 hr 3 mins

IDEX Reports Record Fourth Quarter and Full Year 2018 Results; Q4 Sales up 5 Percent Overall and Organically; Q4 Reported EPS Was $1.27 with Adjusted EPS of $1.31

LAKE FOREST, Ill.--(BUSINESS WIRE)--

IDEX Corporation (IEX) today announced its financial results for the three- and twelve- month periods ended December 31, 2018.

Full Year 2018 Highlights

  • Orders were up 7 percent overall and 6 percent organically
  • Sales were up 9 percent overall and 8 percent organically
  • Reported operating margin was 22.9 percent with adjusted operating margin of 23.4 percent, up 150 bps
  • Reported EPS was $5.29 with adjusted EPS of $5.41, up 26 percent
  • Repurchased 1.3 million shares of common stock for $174 million
  • Acquired Finger Lakes Instrumentation and the intellectual property assets of Phantom Controls

Full Year 2018

Orders of $2.5 billion were up 7 percent compared with the prior year (+6 percent organic and +1 percent foreign currency translation).

Sales of $2.5 billion were up 9 percent compared with the prior year (+8 percent organic and +1 percent foreign currency translation).

Gross margin of 45.0 percent was up 10 basis points compared with the prior year primarily due to productivity initiatives and volume leverage, partially offset by higher engineering costs.

Operating income of $569.1 million resulted in an operating margin of 22.9 percent. Excluding $12.1 million of restructuring expenses, adjusted operating income was $581.2 million with an adjusted operating margin of 23.4 percent, up 150 basis points from the prior year mainly due to volume leverage. Adjusted operating income drove adjusted EBITDA of $662.7 million which was 27 percent of sales and covered interest expense by 15 times.

Provision for income taxes of $118.4 million resulted in an effective tax rate (ETR) of 22.4 percent and included the tax impact from restructuring expenses. Excluding the tax impact from restructuring expenses, provision for income taxes was $121.4 million which resulted in an adjusted ETR of 22.4 percent.

Net income was $410.6 million which resulted in EPS of $5.29. Excluding restructuring expenses, adjusted EPS of $5.41 increased $1.10, or 26 percent, from prior year adjusted EPS.

Cash from operations of $479.3 million was up 11 percent from the prior year and led to free cash flow of $423.3 million, which was up 9 percent from the prior year and 101 percent of adjusted net income primarily due to working capital and capital expenditure investments to support long-term growth.

Fourth Quarter 2018

Orders of $610.3 million were up 1 percent compared with the prior year period (+2 percent organic and -1 percent foreign currency translation).

Sales of $614.1 million were up 5 percent compared with the prior year period (+5 percent organic, +1 percent acquisition/divestitures and -1 percent foreign currency translation).

Gross margin of 44.6 percent was up 10 basis points compared with the prior year period primarily due to productivity initiatives and volume leverage, partially offset by higher engineering costs.

Operating income of $139.4 million resulted in an operating margin of 22.7 percent. Excluding $3.8 million of restructuring expenses, adjusted operating income was $143.2 million with an adjusted operating margin of 23.3 percent, up 120 basis points from the prior year period mainly due to volume leverage. Adjusted operating income drove adjusted EBITDA of $162.0 million which was 26 percent of sales and covered interest expense by almost 15 times.

Provision for income taxes of $30.7 million resulted in an ETR of 23.8 percent and included the tax impact from restructuring expenses. Excluding the tax impact from restructuring expenses, provision for income taxes was $31.7 million which resulted in an adjusted ETR of 23.9 percent.

Net income was $98.1 million which resulted in EPS of $1.27. Excluding restructuring expenses, adjusted EPS of $1.31 increased 19 cents, or 17 percent, from the prior year period adjusted EPS.

Cash from operations of $153.6 million was up 13 percent from the prior year period and led to free cash flow of $137.4 million, which was up 14 percent from the prior year period and 136 percent of adjusted net income.

The Company repurchased 917 thousand shares of common stock for $122 million in the fourth quarter of 2018.

 
“Strong demand in the industrial market coupled with solid execution drove a second consecutive record year for IDEX. We delivered annual all-time highs in orders, sales, operating income, operating margin, EPS and free cash flow. Annual organic order and sales growth were 6 and 8 percent, respectively. The 8 percent annual organic sales growth was our highest annual rate in 7 years. I'm very impressed with these growth rates, and I am especially encouraged with the diversity of the growth across all segments. FMT's annual organic revenue growth was 9 percent, FSDP delivered 7 percent and HST achieved 6 percent. Adjusted operating margin increased 150 basis points with robust expansion across each of the segments and we achieved record adjusted EPS of $5.41, up 26 percent from the prior year. Overall, I am extremely pleased with our team’s performance in 2018.
           
We continue to invest in our best organic growth opportunities as evidenced by the record capital expenditures of $56 million in 2018. M&A remains a key priority, we continue to work our solid funnel, and we will remain committed to our disciplined approach to capital deployment. In 2018, we deployed $174 million on stock repurchases, with $122 million occurring in the fourth quarter. We also returned $127 million to our shareholders via dividends in 2018, achieving our goal of distributing over 30 percent of earnings back to our shareholders.
 
Looking forward to 2019, although trade tensions persist and the geopolitical environment remains uncertain, we are confident in our outlook given our market leading positions in our diversified portfolio and our track record of strong execution in volatile times. Consistent with our long-term strategic objective to grow faster than underlying market growth, we are projecting 4 to 5 percent organic revenue growth in 2019. Full year 2019 EPS is expected to be in the range of $5.60 to $5.80 with first quarter EPS in the range of $1.35 to $1.38, which include approximately 15 cents and 6 cents of foreign currency headwind, respectively."
 
Andrew K. Silvernail
            Chairman and Chief Executive Officer
 

Fourth Quarter 2018 Segment Highlights

Fluid & Metering Technologies

  • Sales of $237.2 million reflected a 7 percent increase compared to the fourth quarter of 2017 (+8 percent organic and -1 percent foreign currency translation).
  • Operating income of $67.9 million resulted in an operating margin of 28.6 percent. Excluding $1.1 million of restructuring expenses, adjusted operating income was $69.0 million with an adjusted operating margin of 29.1 percent, a 70 basis point increase compared to the prior year period primarily due to higher volume and productivity initiatives.
  • EBITDA of $73.1 million resulted in an EBITDA margin of 30.8 percent. Excluding $1.1 million of restructuring expenses, adjusted EBITDA of $74.2 million resulted in an adjusted EBITDA margin of 31.3 percent, a 50 basis point increase compared to the prior year period.

Health & Science Technologies

  • Sales of $225.5 million reflected an 8 percent increase compared to the fourth quarter of 2017 (+7 percent organic, +2 percent acquisition and -1 percent foreign currency translation).
  • Operating income of $52.2 million resulted in an operating margin of 23.1 percent. Excluding $0.6 million of restructuring expenses, adjusted operating income was $52.8 million with an adjusted operating margin of 23.4 percent, a 110 basis point increase compared to the prior year period primarily due to higher volume and productivity initiatives, partially offset by higher engineering costs.
  • EBITDA of $62.2 million resulted in an EBITDA margin of 27.6 percent. Excluding $0.6 million of restructuring expenses, adjusted EBITDA of $62.8 million resulted in an adjusted EBITDA margin of 27.8 percent, a 10 basis point decrease compared to the prior year period.

Fire & Safety/Diversified Products

  • Sales of $151.7 million reflected a 2 percent decrease compared to the fourth quarter of 2017 (-1 percent organic and -1 percent foreign currency translation).
  • Operating income of $38.4 million resulted in an operating margin of 25.3 percent. Excluding $1.8 million of restructuring expenses, adjusted operating income was $40.2 million with an adjusted operating margin of 26.5 percent, flat compared to the prior year period primarily due to productivity initiatives offset by lower volume.
  • EBITDA of $42.1 million resulted in an EBITDA margin of 27.8 percent. Excluding $1.8 million of restructuring expenses, adjusted EBITDA of $43.9 million resulted in an adjusted EBITDA margin of 28.9 percent, a 30 basis point increase compared to the prior year period.

For the fourth quarter of 2018, Fluid & Metering Technologies contributed 39 percent of sales, 43 percent of operating income and 41 percent of EBITDA; Health & Science Technologies accounted for 37 percent of sales, 33 percent of operating income and 35 percent of EBITDA; and Fire & Safety/Diversified Products represented 24 percent of sales, 24 percent of operating income and 24 percent of EBITDA.

Corporate Costs

Corporate costs decreased to $18.7 million in the fourth quarter of 2018 from $21.2 million in the fourth quarter of 2017 as a result of lower outside consulting costs.

Corporate costs increased to $78.7 million in 2018 compared to $74.2 million in 2017 as a result of a stamp duty tax in Switzerland associated with the restructuring of intercompany loans and higher stock compensation.

Restructuring Actions

The Company recorded $3.8 million and $12.1 million of restructuring expenses in the fourth quarter and full year 2018, respectively, as part of initiatives that support the implementation of key strategic efforts designed to facilitate long-term, sustainable growth through cost reduction actions, primarily consisting of employee reductions and facility rationalization. A portion of the restructuring expenses also relates to expenses associated with the consolidation of three facilities into our Optics Center of Excellence in Rochester, New York. The consolidation of these facilities is expected to be completed by early 2019.

Non-U.S. GAAP Measures of Financial Performance

The Company supplements certain U.S. GAAP financial performance metrics with non-U.S. GAAP financial performance metrics in order to provide investors with better insight and increased transparency while also allowing for a more comprehensive understanding of the financial information used by management in its decision making. Reconciliations of non-U.S. GAAP financial performance metrics to their most comparable U.S. GAAP financial performance metrics are defined and presented below and should not be considered a substitute for, nor superior to, the financial data prepared in accordance with U.S. GAAP. There were no adjustments to U.S. GAAP financial performance metrics other than the items noted below.

  • Organic orders and sales are calculated excluding amounts from acquired or divested businesses during the first twelve months of ownership or divestiture and the impact of foreign currency translation.
  • Adjusted operating income is calculated as operating income plus restructuring expenses plus or minus the net loss or gain on sale of businesses.
  • Adjusted operating margin is calculated as adjusted operating income divided by net sales.
  • Adjusted net income is calculated as net income plus restructuring expenses plus or minus the net loss or gain on sale of businesses, net of the statutory tax expense or benefit.
  • EBITDA is calculated as net income plus interest expense plus provision for income taxes plus depreciation and amortization. We reconciled EBITDA to net income on a consolidated basis as we do not allocate consolidated interest expense or consolidated provision for income taxes to our segments.
  • Adjusted EBITDA is calculated as EBITDA plus restructuring expenses plus or minus the net loss or gain on sale of businesses.
  • 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

  For the Quarter Ended   For the Year Ended
December 31, 2018 December 31, 2018
FMT   HST   FSDP   IDEX FMT   HST   FSDP   IDEX
Change in net sales 7 % 8 % (2 )% 5 % 8 % 9 % 8 % 9 %
- Net impact from acquisitions/divestitures % 2 % % 1 % (2 )% 2 % % %
- Impact from FX (1 )% (1 )% (1 )% (1 )% 1 % 1 % 1 % 1 %
Change in organic net sales 8 % 7 % (1 )% 5 % 9 % 6 % 7 % 8 %
 

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

  For the Quarter Ended December 31,
2018   2017
FMT   HST   FSDP   Corporate   IDEX FMT   HST   FSDP   Corporate   IDEX
Reported operating income (loss) $ 67,911 $ 52,160 $ 38,439 $ (19,069 ) $139,441 $ 61,200 $ 44,962 $ 41,006 $ (11,920 ) $135,248
+ Restructuring expenses 1,145 606 1,757 324 3,832 1,808 1,668 182 3,658
+ Gain on sale of business                 (9,273 ) (9,273 )
Adjusted operating income (loss) $ 69,056   $ 52,766   $ 40,196   $ (18,745 ) $ 143,273   $ 63,008   $ 46,630   $ 41,188   $ (21,193 ) $ 129,633  
 
Net sales (eliminations) $ 237,206 $ 225,515 $ 151,723 $ (350 ) $ 614,094 $ 222,052 $ 208,916 $ 155,504 $ (568 ) $ 585,904
 
Reported operating margin 28.6 % 23.1 % 25.3 % n/m 22.7 % 27.6 % 21.5 % 26.4 % n/m 23.1 %
Adjusted operating margin 29.1 % 23.4 % 26.5 % n/m 23.3 % 28.4 % 22.3 % 26.5 % n/m 22.1 %
 
  For the Year Ended December 31,
2018   2017
FMT   HST   FSDP   Corporate   IDEX FMT   HST   FSDP   Corporate   IDEX
Reported operating income (loss) $ 275,060 $ 205,679 $ 168,601 $ (80,252 ) $569,088 $ 241,030 $ 179,567 $ 147,028 $ (65,069 ) $502,556
+ Restructuring expenses 2,458 5,904 2,184 1,537 12,083 3,374 4,696 255 130 8,455
+ Gain on sale of business                 (9,273 ) (9,273 )
Adjusted operating income (loss) $ 277,518   $ 211,583   $ 170,785   $ (78,715 ) $ 581,171   $ 244,404   $ 184,263   $ 147,283   $ (74,212 ) $ 501,738  
 
Net sales (eliminations) $ 951,552 $ 896,419 $ 637,028 $ (1,333 ) $ 2,483,666 $ 880,957 $ 820,131 $ 587,533 $ (1,309 ) $ 2,287,312
 
Reported operating margin 28.9 % 22.9 % 26.5 % n/m 22.9 % 27.4 % 21.9 % 25.0 % n/m 22.0 %
Adjusted operating margin 29.2 % 23.6 % 26.8 % n/m 23.4 % 27.7 % 22.5 % 25.1 % n/m 21.9 %
 

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

  For the Quarter Ended   For the Year Ended
December 31, December 31,
2018   2017 2018   2017
Reported net income $ 98,137 $ 93,746 $ 410,573 $ 337,257
+ Restructuring expenses 3,832 3,658 12,083 8,455
+ Tax impact on restructuring expenses (1,029 ) (1,243 ) (3,032 ) (2,772 )
+ Gain on sale of business (9,273 ) (9,273 )
+ Tax impact on gain on sale of business        
Adjusted net income $ 100,940   $ 86,888   $ 419,624   $ 333,667  
 
  For the Quarter Ended   For the Year Ended
December 31, December 31,
2018   2017 2018   2017
Reported EPS $ 1.27 $ 1.21 $ 5.29 $ 4.36
+ Restructuring expenses 0.05 0.05 0.16 0.11
+ Tax impact on restructuring expenses (0.01 ) (0.02 ) (0.04 ) (0.04 )
+ Gain on sale of business (0.12 ) (0.12 )
+ Tax impact on gain on sale of business        
Adjusted EPS $ 1.31   $ 1.12   $ 5.41   $ 4.31  
 
Diluted weighted average shares 77,100 77,597 77,563 77,333
 

Table 4: Reconciliations of EBITDA to Net Income (dollars in thousands)

  For the Quarter Ended December 31,
2018   2017
FMT   HST   FSDP   Corporate   IDEX FMT   HST   FSDP   Corporate   IDEX
Reported operating income (loss) $ 67,911 $ 52,160 $ 38,439 $ (19,069 ) $ 139,441 $ 61,200 $ 44,962 $ 41,006 $ (11,920 ) $ 135,248
- Other (income) expense - net 295 (912 ) (120 ) 317 (420 ) 300 (892 ) 296 973 677
+ Depreciation and amortization 5,469   9,079   3,581   185   18,314   5,764   10,840   3,603   203   20,410  
EBITDA 73,085 62,151 42,140 (19,201 ) 158,175 66,664 56,694 44,313 (12,690 ) 154,981
- Interest expense 11,036 10,969
- Provision for income taxes 30,688 29,856
- Depreciation and amortization 18,314   20,410  
Reported net income $ 98,137   $ 93,746  
 
Net sales (eliminations) $ 237,206 $ 225,515 $ 151,723 $ (350 ) $ 614,094 $ 222,052 $ 208,916 $ 155,504 $ (568 ) $ 585,904
 
Reported operating margin 28.6 % 23.1 % 25.3 % n/m 22.7 % 27.6 % 21.5 % 26.4 % n/m 23.1 %
EBITDA margin 30.8 % 27.6 % 27.8 % n/m 25.8 % 30.0 % 27.1 % 28.5 % n/m 26.5 %
 
  For the Year Ended December 31,
2018   2017
FMT   HST   FSDP   Corporate   IDEX FMT   HST   FSDP   Corporate   IDEX
Reported operating income (loss) $ 275,060 $ 205,679 $ 168,601 $ (80,252 ) $ 569,088 $ 241,030 $ 179,567 $ 147,028 $ (65,069 ) $ 502,556
- Other (income) expense - net 1,351 (1,192 ) (3,444 ) (700 ) (3,985 ) 1,007 (795 ) 1,959 223 2,394
+ Depreciation and amortization 22,370   39,939   14,493   742   77,544   23,587   45,287   14,541   801   84,216  
EBITDA 296,079 246,810 186,538 (78,810 ) 650,617 263,610 225,649 159,610 (64,491 ) 584,378
- Interest expense 44,134 44,889
- Provision for income taxes 118,366 118,016
- Depreciation and amortization 77,544   84,216  
Reported net income $410,573   $337,257  
 
Net sales (eliminations) $ 951,552 $ 896,419 $ 637,028 $ (1,333 ) $ 2,483,666 $ 880,957 $ 820,131 $ 587,533 $ (1,309 ) $ 2,287,312
 
Reported operating margin 28.9 % 22.9 % 26.5 % n/m 22.9 % 27.4 % 21.9 % 25.0 % n/m 22.0 %
EBITDA margin 31.1 % 27.5 % 29.3 % n/m 26.2 % 29.9 % 27.5 % 27.2 % n/m 25.5 %
 

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

  For the Quarter Ended December 31,
2018   2017
FMT   HST   FSDP   Corporate   IDEX FMT   HST   FSDP   Corporate   IDEX
EBITDA $ 73,085 $ 62,151 $ 42,140 $ (19,201 ) $ 158,175 $ 66,664 $ 56,694 $ 44,313 $ (12,690 ) $ 154,981
+ Restructuring expenses 1,145 606 1,757 324 3,832 1,808 1,668 182 3,658
+ Gain on sale of business                 (9,273 ) (9,273 )
Adjusted EBITDA $ 74,230   $ 62,757   $ 43,897   $ (18,877 ) $ 162,007   $ 68,472   $ 58,362   $ 44,495   $ (21,963 ) $ 149,366  
 
Adjusted EBITDA margin 31.3 % 27.8 % 28.9 % n/m 26.4 % 30.8 % 27.9 % 28.6 % n/m 25.5 %
 
  For the Year Ended December 31,
2018   2017
FMT   HST   FSDP   Corporate   IDEX FMT   HST   FSDP   Corporate   IDEX
EBITDA $ 296,079 $ 246,810 $ 186,538 $ (78,810 ) $ 650,617 $ 263,610 $ 225,649 $ 159,610 $ (64,491 ) $ 584,378
+ Restructuring expenses 2,458 5,904 2,184 1,537 12,083 3,374 4,696 255 130 8,455
+ Gain on sale of business                 (9,273 ) (9,273 )
Adjusted EBITDA $ 298,537   $ 252,714   $ 188,722   $ (77,273 ) $ 662,700   $ 266,984   $ 230,345   $ 159,865   $ (73,634 ) $ 583,560  
 
Adjusted EBITDA margin 31.4 % 28.2 % 29.6 % n/m 26.7 % 30.3 % 28.1 % 27.2 % n/m 25.5 %
 

Table 6: Reconciliations of Free Cash Flow (in thousands)

  For the Quarter Ended  

For the Year Ended
December 31,

December 31,   September 30,
2018   2017 2018 2018   2017
Cash flow from operating activities $ 153,592 $ 136,173 $ 133,327 $ 479,345 $ 432,753
- Capital expenditures 16,233   15,804   18,888   56,089   43,858
Free cash flow $ 137,359   $ 120,369   $ 114,439   $ 423,256   $ 388,895
 

Conference Call to be Broadcast over the Internet

IDEX will broadcast its fourth quarter earnings conference call over the Internet on Wednesday, January 30, 2019 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 #13684161.

Forward-Looking Statements

This news release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, capital expenditures, acquisitions, cost reductions, cash flow, revenues, earnings, market conditions, global economies and operating improvements, and are indicated by words or phrases such as “anticipates,” “estimates,” “plans,” “expects,” “projects,” “forecasts,” “should,” “could,” “will,” “management believes,” “the Company believes,” “the Company intends,” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this news release. The risks and uncertainties include, but are not limited to, the following: economic and political consequences resulting from terrorist attacks and wars; levels of industrial activity and economic conditions in the U.S. and other countries around the world; pricing pressures 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 filed with the SEC and the other risks discussed in the Company’s filings with the SEC. The forward-looking statements included here are only made as of the date of this news release, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.

About IDEX

IDEX is a global fluidics leader serving high growth specialized markets. We are best known for our expertise in highly engineered fluidics systems and components, as well as for our expertise in fire and safety products including the Jaws of Life® family of rescue and recovery tools. Our products touch lives every day. Whether it’s a life-saving rescue operation, dispensing fresh juice to a first grader or fueling aircraft, IDEX is a leader in creating enabling technology used in many of the most common everyday activities. For more information, please visit www.idexcorp.com. IDEX shares are traded on the New York Stock Exchange under the symbol “IEX”.

(Financial reports follow)

   

IDEX CORPORATION

Condensed Consolidated Statements of Operations

(in thousands except for per share amounts)

(unaudited)

 
For the Quarter Ended For the Year Ended
December 31, December 31,
2018   2017 2018   2017
Net sales $ 614,094 $ 585,904 $ 2,483,666 $ 2,287,312
Cost of sales   340,451     325,022     1,365,771     1,260,634  
Gross profit 273,643 260,882 1,117,895 1,026,678
Selling, general and administrative expenses 130,370 131,249 536,724 524,940
Gain on sale of business (9,273 ) (9,273 )
Restructuring expenses   3,832     3,658     12,083     8,455  
Operating income 139,441 135,248 569,088 502,556
Other (income) expense - net (420 ) 677 (3,985 ) 2,394
Interest expense   11,036     10,969     44,134     44,889  
Income before income taxes 128,825 123,602 528,939 455,273
Provision for income taxes   30,688     29,856     118,366     118,016  
Net income   $ 98,137     $ 93,746     $ 410,573     $ 337,257  
 
Earnings per Common Share:
Basic earnings per common share $ 1.29 $ 1.23 $ 5.36 $ 4.41
Diluted earnings per common share $ 1.27 $ 1.21 $ 5.29 $ 4.36
 
Share Data:
Basic weighted average common shares outstanding 76,128 76,283 76,412 76,232
Diluted weighted average common shares outstanding 77,100 77,597 77,563 77,333
   
IDEX CORPORATION

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 
December 31, December 31,
2018 2017
Assets
Current assets
Cash and cash equivalents $ 466,407 $ 375,950
Receivables - net 314,753 294,166
Inventories 279,995 259,724
Other current assets   31,377     74,203
Total current assets 1,092,532 1,004,043
Property, plant and equipment - net 281,220 258,350
Goodwill and intangible assets 2,081,282 2,118,904
Other noncurrent assets   15,765     18,331
Total assets   $ 3,470,799     $ 3,399,628
 
Liabilities and shareholders' equity
Current liabilities
Trade accounts payable $ 143,196 $ 147,067
Accrued expenses 187,536 184,705
Short-term borrowings 483 258
Dividends payable   33,446     28,945
Total current liabilities 364,661 360,975
Long-term borrowings 848,335 858,788
Other noncurrent liabilities   264,627     293,323
Total liabilities 1,477,623 1,513,086
Shareholders' equity   1,993,176     1,886,542
Total liabilities and shareholders' equity   $ 3,470,799     $ 3,399,628
 
IDEX CORPORATION

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 
For the Year Ended
December 31,
2018   2017
Cash flows from operating activities
Net income $ 410,573 $ 337,257
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on sale of fixed assets - net 946 315
Gain on sale of business (9,273 )
Depreciation and amortization 39,049 38,314
Amortization of intangible assets 38,495 45,902
Amortization of debt issuance expenses 1,332 1,320
Share-based compensation expense 24,754 24,405
Deferred income taxes (4,346 ) (33,742 )
Non-cash interest expense associated with forward starting swaps 6,475 6,655
Changes in (net of the effect from acquisitions and divestitures):
Receivables (26,063 ) (15,803 )
Inventories (23,031 ) 760
Other current assets 27,806 (20,031 )
Trade accounts payable (1,220 ) 12,556
Accrued expenses 4,148 19,710
Other - net   (19,573 )   24,408  
Net cash flows provided by operating activities 479,345 432,753
Cash flows from investing activities
Purchases of property, plant and equipment (56,089 ) (43,858 )
Purchase of intellectual property (4,000 )
Acquisition of businesses, net of cash acquired (20,205 ) (38,161 )
Proceeds from sale of business 21,795
Proceeds from fixed asset disposals 363 6,011
Other - net   (1,500 )   (533 )
Net cash flows used in investing activities (81,431 ) (54,746 )
Cash flows from financing activities
Borrowings under revolving credit facilities 33,000
Payments under revolving credit facilities (11,284 ) (200,618 )
Dividends paid (127,478 ) (111,172 )
Proceeds from stock option exercises 27,639 22,935
Purchases of common stock (173,926 ) (29,074 )
Shares surrendered for tax withholding (11,555 ) (6,228 )
Settlement of foreign exchange contracts   6,593     13,736  
Net cash flows used in financing activities (290,011 ) (277,421 )
Effect of exchange rate changes on cash and cash equivalents   (17,446 )   39,400  
Net increase in cash 90,457 139,986
Cash and cash equivalents at beginning of year   375,950     235,964  
Cash and cash equivalents at end of period   $ 466,407     $ 375,950  
     
IDEX CORPORATION

Company and Segment Financial Information - Reported

(dollars in thousands)

(unaudited)

 
For the Quarter Ended For the Year Ended

December 31,(a)

December 31,(a)

2018   2017 2018   2017
Fluid & Metering Technologies
Net sales $ 237,206 $ 222,052 $ 951,552 $ 880,957
Operating income (b) 67,911 61,200 275,060 241,030
Operating margin 28.6 % 27.6 % 28.9 % 27.4 %
EBITDA $ 73,085 $ 66,664 $ 296,079 $ 263,610
EBITDA margin 30.8 % 30.0 % 31.1 % 29.9 %
Depreciation and amortization $ 5,469 $ 5,764 $ 22,370 $ 23,587
Capital expenditures 4,399 6,059 19,541 18,218
 
Health & Science Technologies
Net sales $ 225,515 $ 208,916 $ 896,419 $ 820,131
Operating income (b) 52,160 44,962 205,679 179,567
Operating margin 23.1 % 21.5 % 22.9 % 21.9 %
EBITDA $ 62,151 $ 56,694 $ 246,810 $ 225,649
EBITDA margin 27.6 % 27.1 % 27.5 % 27.5 %
Depreciation and amortization $ 9,079 $ 10,840 $ 39,939 $ 45,287
Capital expenditures 8,743 4,851 26,039 16,340
 
Fire & Safety/Diversified Products
Net sales $ 151,723 $ 155,504 $ 637,028 $ 587,533
Operating income (b) 38,439 41,006 168,601 147,028
Operating margin 25.3 % 26.4 % 26.5 % 25.0 %
EBITDA $ 42,140 $ 44,313 $ 186,538 $ 159,610
EBITDA margin 27.8 % 28.5 % 29.3 % 27.2 %
Depreciation and amortization $ 3,581 $ 3,603 $ 14,493 $ 14,541
Capital expenditures 3,086 2,185 10,318 6,363
 
Corporate Office and Eliminations
Intersegment sales eliminations $ (350 ) $ (568 ) $ (1,333 ) $ (1,309 )
Operating income (b) (19,069 ) (11,920 ) (80,252 ) (65,069 )
EBITDA (19,201 ) (12,690 ) (78,810 ) (64,491 )
Depreciation and amortization 185 203 742 801
Capital expenditures 5 2,709 191 2,937
 
Company
Net sales $ 614,094 $ 585,904 $ 2,483,666 $ 2,287,312
Operating income 139,441 135,248 569,088 502,556
Operating margin 22.7 % 23.1 % 22.9 % 22.0 %
EBITDA $ 158,175 $ 154,981 $ 650,617 $ 584,378
EBITDA margin 25.8 % 26.5 % 26.2 % 25.5 %
Depreciation and amortization (c) $ 18,314 $ 20,410 $ 77,544 $ 84,216
Capital expenditures 16,233 15,804 56,089 43,858
     
IDEX CORPORATION

Company and Segment Financial Information - Adjusted

(dollars in thousands)

(unaudited)

 
For the Quarter Ended For the Year Ended

December 31,(a)

December 31,(a)

2018   2017 2018   2017
Fluid & Metering Technologies
Net sales $ 237,206 $ 222,052 $ 951,552 $ 880,957
Adjusted operating income (b) 69,056 63,008 277,518 244,404
Adjusted operating margin 29.1 % 28.4 % 29.2 % 27.7 %
Adjusted EBITDA $ 74,230 $ 68,472 $ 298,537 $ 266,984
Adjusted EBITDA margin 31.3 % 30.8 % 31.4 % 30.3 %
Depreciation and amortization $ 5,469 $ 5,764 $ 22,370 $ 23,587
Capital expenditures 4,399 6,059 19,541 18,218
 
Health & Science Technologies
Net sales $ 225,515 $ 208,916 $ 896,419 $ 820,131
Adjusted operating income (b) 52,766 46,630 211,583 184,263
Adjusted operating margin 23.4 % 22.3 % 23.6 % 22.5 %
Adjusted EBITDA $ 62,757 $ 58,362 $ 252,714 $ 230,345
Adjusted EBITDA margin 27.8 % 27.9 % 28.2 % 28.1 %
Depreciation and amortization $ 9,079 $ 10,840 $ 39,939 $ 45,287
Capital expenditures 8,743 4,851 26,039 16,340
 
Fire & Safety/Diversified Products
Net sales $ 151,723 $ 155,504 $ 637,028 $ 587,533
Adjusted operating income (b) 40,196 41,188 170,785 147,283
Adjusted operating margin 26.5 % 26.5 % 26.8 % 25.1 %
Adjusted EBITDA $ 43,897 $ 44,495 $ 188,722 $ 159,865
Adjusted EBITDA margin 28.9 % 28.6 % 29.6 % 27.2 %
Depreciation and amortization $ 3,581 $ 3,603 $ 14,493 $ 14,541
Capital expenditures 3,086 2,185 10,318 6,363
 
Corporate Office and Eliminations
Intersegment sales eliminations $ (350 ) $ (568 ) $ (1,333 ) $ (1,309 )
Adjusted operating income (b) (18,745 ) (21,193 ) (78,715 ) (74,212 )
Adjusted EBITDA (18,877 ) (21,963 ) (77,273 ) (73,634 )
Depreciation and amortization 185 203 742 801
Capital expenditures 5 2,709 191 2,937
 
Company
Net sales $ 614,094 $ 585,904 $ 2,483,666 $ 2,287,312
Adjusted operating income 143,273 129,633 581,171 501,738
Adjusted operating margin 23.3 % 22.1 % 23.4 % 21.9 %
Adjusted EBITDA $ 162,007 $ 149,366 $ 662,700 $ 583,560
Adjusted EBITDA margin 26.4 % 25.5 % 26.7 % 25.5 %
Depreciation and amortization (c) $ 18,314 $ 20,410 $ 77,544 $ 84,216
Capital expenditures 16,233 15,804 56,089 43,858
 
(a)   Three and twelve months data include the results of Finger Lakes Instrumentation (July 2018) and thinXXS (December 2017) in the Health & Science Technologies segment from the date of acquisition and the results of Faure Herman (October 2017) in the Fluid & Metering Technologies segment through the date of disposition.
(b) Segment operating income excludes unallocated corporate operating expenses which are included in Corporate Office and Eliminations.
(c) Depreciation and amortization excludes amortization of debt issuance costs.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190129005909/en/