Third Quarter 2024
Highlights (All comparisons are against the third
quarter of 2023 unless otherwise noted)
- Sales of $798 million, up 1% overall and flat organically
- Reported diluted EPS of $1.57, down 43%, and adjusted diluted
EPS of $1.90, down 10%
- Operating cash flow of $205 million, down 9%; and 172% of net
income, up from 108%
- Free cash flow of $192 million, down 7%; and 133% of adjusted
net income, up from 129%
- Completed acquisition of Mott Corporation on September 5,
2024
- Completed a public offering of $500 million principal amount of
4.950% Senior Notes, due September 2029
Full Year 2024 Outlook
- Full year organic sales growth is projected to decline 1% to 2%
versus the prior year
- Full year GAAP diluted EPS of $6.65 - $6.70 vs. previous
guidance of $6.85 - $6.95. Current guidance includes purchase
accounting impacts, such as acquisition-related amortization, from
the acquisition of Mott Corporation
- Adjusted diluted EPS of $7.85 - $7.90 vs. previous guidance of
$7.80 - $7.90
IDEX Corporation (NYSE: IEX) today announced its financial
results for the three-month period ended September 30,
2024.
“We are encouraged by our third quarter performance. The teams
within our Fluid & Metering Technologies and Fire & Safety
/ Diversified Products segments drove organic growth against an
uncertain economic backdrop while delivering strong margins through
operational execution,” said Eric D. Ashleman, IDEX Corporation
Chief Executive Officer and President. “We saw a healthy organic
increase in orders within our Health & Science Technologies
segment, strengthening our business positioning as we look for
signs of extended recovery within the life science and
semiconductor sectors.”
“Meanwhile, less than two months since completing our
acquisition of Mott, the partnership is off to a fast start. Teams
from other IDEX businesses are already collaborating with their
Mott colleagues, designing new prototypes together that incorporate
Mott’s highly engineered filtration products. Talented IDEX
employees have been integrated into Mott leadership since closing,
helping initiate a smooth integration,” Ashleman said. “The core
advanced technology markets Mott serves, including semiconductor
wafer fabrication, transformative energy solutions, medical
technologies, and water purification, are advantaged to outperform
over the long haul.”
“IDEX remains well-positioned, solving difficult problems with
customers on the cutting edge of new technologies. We expect to
continue deploying resources across our portfolio with our 8020
mindset toward growth accelerators to position us to drive
long-term value creation.”
Consolidated Financial
Results
Three Months Ended September
30,
(Dollars in millions, except per share
amounts)
2024
2023
Increase (Decrease)
Orders
$
780.5
$
712.3
$
68.2
Change in organic orders*
8
%
Net sales
798.2
793.4
4.8
Change in organic net sales*
—
Gross profit
353.9
349.6
4.3
Adjusted gross profit*
356.0
350.8
5.2
Net income attributable to IDEX
119.1
209.1
(90.0
)
Adjusted net income attributable to
IDEX*
144.1
160.6
(16.5
)
Adjusted EBITDA*
214.3
225.5
(11.2
)
Diluted EPS attributable to
IDEX
1.57
2.75
(1.18
)
Adjusted diluted EPS attributable to
IDEX*
1.90
2.12
(0.22
)
Cash flows from operating
activities
205.3
226.6
(21.3
)
Free cash flow*
191.6
206.5
(14.9
)
Gross margin
44.3
%
44.1
%
20 bps
Adjusted gross margin*
44.6
%
44.2
%
40 bps
Net income margin
14.9
%
26.3
%
(1,140) bps
Adjusted EBITDA margin*
26.9
%
28.4
%
(150) 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.
- Net sales increased 1% compared to the prior year period as a
result of the net impact of acquisitions and divestitures. Organic
net sales were flat, reflecting lower volumes in our Health &
Science Technologies segment, which were mitigated by price capture
across all segments.
- Gross margin of 44.3% increased 20 bps primarily due to strong
price/cost, partially offset by higher employee-related costs.
- Net income margin of 14.9% decreased 1,140 bps and reported
Diluted EPS of $1.57 decreased $1.18, primarily as a result of the
absence of the gain on sale of the Micropump, Inc. (“Micropump”)
business, which occurred in the prior year period. Diluted EPS was
further impacted by lower operating results as well as a higher
effective tax rate. The effective tax rate in the prior year period
included one-time benefits that lowered the effective tax rate,
partially offset by tax recorded on the gain from the Micropump
divestiture.
- Adjusted EBITDA margin of 26.9% decreased 150 bps and Adjusted
diluted EPS of $1.90 decreased $0.22 reflecting strong price/cost,
which was more than offset by higher employee-related costs and
lower volume. Additionally, the current year period included $3.7
million of higher transaction-related expenses in connection with
the acquisition of Mott Corporation and its subsidiaries
(“Mott").
- Adjusted diluted EPS also reflects an $0.11 impact of a higher
effective tax rate as compared to the prior year period as
discussed above. The adjusted effective tax rate in the prior year
period excludes the gain and associated tax impacts of the
Micropump divestiture.
Segment Financial
Results
Three Months Ended September
30, (a)
(Dollars in millions)
2024
2023
Increase (Decrease)
Fluid &
Metering Technologies ("FMT")
Net sales
$
300.8
$
301.1
$
(0.3
)
Change in organic net sales*
2
%
Adjusted EBITDA(b)
98.5
103.6
(5.1
)
Adjusted EBITDA margin
32.8
%
34.4
%
(160) bps
Health &
Science Technologies ("HST")
Net sales
$
311.0
$
313.2
$
(2.2
)
Change in organic net sales*
(5
%)
Adjusted EBITDA(b)
82.6
84.4
(1.8
)
Adjusted EBITDA margin
26.5
%
26.9
%
(40) bps
Fire &
Safety/Diversified Products ("FSDP")
Net sales
$
188.0
$
180.6
$
7.4
Change in organic net sales*
4
%
Adjusted EBITDA(b)
54.7
52.8
1.9
Adjusted EBITDA margin
29.1
%
29.3
%
(20) bps
Corporate Office
and Eliminations
Intersegment sales eliminations
$
(1.6
)
$
(1.5
)
$
(0.1
)
Adjusted EBITDA(b)
(21.5
)
(15.3
)
(6.2
)
*These are non-GAAP measures. See the
definitions of these non-GAAP measures in the section in this
release titled “Non-GAAP Measures of Financial Performance” and
reconciliations to their most directly comparable GAAP financial
measures in the reconciliation tables at the end of this
release.
(a) Three month data includes the results
of the acquisitions of STC Material Solutions (December 2023) and
Mott Corporation (September 2024) in the HST segment. Three month
data also includes the results of Micropump (August 2023) and
Novotema, SpA (December 2023) in the HST segment and Alfa Valvole,
Srl (June 2024) in the FMT segment through the respective dates of
disposition.
(b) Segment Adjusted EBITDA excludes
unallocated corporate costs which are included in Corporate and
other.
Fluid & Metering Technologies
Segment
- Net sales were relatively flat compared to the prior year
period while organic net sales were up 2%. Positive impacts of
price capture were offset by the impact of divestitures. Volumes
were relatively flat period over period with improvement in the
industrial market and strength in our water business, offset by a
down agriculture cycle and softness in the energy market.
- Adjusted EBITDA margin for the third quarter 2024 decreased
primarily due to higher employee-related costs, higher
discretionary spending and unfavorable mix, partially offset by
price/cost.
Health & Science Technologies
Segment
- Net sales for the third quarter 2024 were relatively flat while
organic net sales were down 5%. Net sales were negatively impacted
by lower volumes driven by continued broad based market softness.
This decrease was partially offset by price capture and the
positive net impact of acquisitions and divestitures.
- Adjusted EBITDA margin for the third quarter 2024 decreased
primarily due to lower volume and higher employee-related costs,
partially offset by price/cost, favorable operational productivity
and the net accretive impact of acquisitions and divestitures.
Fire & Safety/Diversified Products
Segment
- Both reported and organic net sales for the third quarter 2024
were up 4% and positively impacted by price capture and higher
volumes. The benefit of key growth initiatives and strength in the
aerospace market was partially offset by the cyclical nature of
project sales in our North American dispensing business.
- Adjusted EBITDA margin for the third quarter 2024 decreased due
to unfavorable mix. Positive price/cost offset higher employee
related costs.
Mott Acquisition
On September 5, 2024, IDEX acquired Mott for cash consideration
of $986.2 million, net of cash acquired of $3.1 million. When
adjusted for the present value of expected tax benefits of
approximately $100 million, the net transaction value is
approximately $900 million. This represents approximately 19x
Mott’s forecasted full year 2024 EBITDA and a mid-teens multiple
based on Mott’s forecasted 2025 EBITDA. The acquisition is expected
to be accretive to IDEX’s adjusted earnings per share in fiscal
year 2026.
Conference Call to be Broadcast over
the Internet
IDEX will broadcast its third quarter earnings conference call
over the Internet on Wednesday, October 30, 2024 at 9:30 a.m. CT.
Chief Executive Officer and President Eric Ashleman and Senior Vice
President and Chief Financial Officer Abhi Khandelwal 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 available 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 #13742105.
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 fourth quarter 2024 and full year 2024
outlook including expected sales, expected organic sales, expected
earnings per share, expected adjusted earnings per share, estimated
net income and estimated adjusted EBITDA and the assumptions
underlying these expectations, anticipated future acquisition
behavior, resource deployment and focus and organic and inorganic
growth, anticipated trends in end markets, anticipated growth
initiatives, the anticipated benefits of the Company’s recent
acquisitions and integration plans, including the projected EBITDA
of Mott and the related impact and timing for such impact on the
Company’s earnings, 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; pricing pressures,
including inflation and rising interest rates, and other
competitive factors and levels of capital spending in certain
industries; the impact of severe weather events, natural disasters
and public health threats; economic and political consequences
resulting from terrorist attacks and wars; the Company’s ability to
make acquisitions and to integrate and operate acquired businesses
on a profitable basis; cybersecurity incidents; 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; 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 Corporation (NYSE: IEX) designs and builds engineered
products and mission-critical components that make everyday life
better. IDEX precision components help craft the microchip powering
your electronics, treat water so it is safe to drink, and protect
communities and the environment from sewer overflows. Our optics
enable global broadband satellite communications, and our pumps
move challenging fluids that range from hot, to viscous, to
caustic. IDEX components assist healthcare professionals in saving
lives as part of many leading diagnostic machines, including DNA
sequencers that help doctors personalize treatment. And our fire
and rescue tools, including the industry-leading Hurst Jaws of
Life®, are trusted by rescue workers around the world. These are
just some of the thousands of products that help IDEX live its
purpose – Trusted Solutions, Improving Lives™. Founded in 1988 with
three small, entrepreneurial manufacturing companies, IDEX now
includes more than 50 diverse businesses around the world. With
about 8,800 employees and manufacturing operations in more than 20
countries, IDEX is a diversified, high-performing, global company
with approximately $3.3 billion in annual sales.
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 September
30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net sales
$
798.2
$
793.4
$
2,405.9
$
2,485.0
Cost of sales
444.3
443.8
1,327.8
1,374.9
Gross profit
353.9
349.6
1,078.1
1,110.1
Selling, general and administrative
expenses
182.9
165.9
560.8
529.9
Restructuring expenses and asset
impairments
3.0
4.1
5.4
8.2
Operating income
168.0
179.6
511.9
572.0
Gain on sale of business(1)
0.6
(93.8
)
(4.0
)
(93.8
)
Other expense (income) – net
2.7
(2.1
)
—
5.6
Interest expense - net
10.3
13.7
27.8
40.1
Income before income taxes
154.4
261.8
488.1
620.1
Provision for income taxes
35.5
52.8
106.7
132.8
Net income
118.9
209.0
381.4
487.3
Net loss attributable to noncontrolling
interest
0.2
0.1
0.4
0.2
Net income attributable to IDEX
$
119.1
$
209.1
$
381.8
$
487.5
Earnings per Common Share:
Basic earnings per common share
attributable to IDEX
$
1.57
$
2.76
$
5.03
$
6.44
Diluted earnings per common share
attributable to IDEX
$
1.57
$
2.75
$
5.02
$
6.42
Share Data:
Basic weighted average common shares
outstanding
75.7
75.6
75.7
75.6
Diluted weighted average common shares
outstanding
75.9
75.9
75.9
75.9
(1)
Activity recorded during the three months
ended September 30, 2024 represents the finalization of the gain on
the sale of Alfa Valvole, Srl resulting in a $0.6 million downward
adjustment during the third quarter of 2024.
IDEX CORPORATION
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
September 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
633.2
$
534.3
Receivables - net
475.1
427.8
Inventories - net
488.2
420.8
Other current assets
81.3
63.4
Total current assets
1,677.8
1,446.3
Property, plant and equipment -
net
468.6
430.3
Goodwill
3,316.0
2,838.3
Intangible assets - net
1,349.4
1,011.8
Other noncurrent assets
155.7
138.5
Total assets
$
6,967.5
$
5,865.2
Liabilities and equity
Current liabilities
Trade accounts payable
$
210.4
$
179.7
Accrued expenses
301.2
271.5
Current portion of long-term
borrowings
0.6
0.6
Dividends payable
52.4
48.5
Total current liabilities
564.6
500.3
Long-term borrowings - net
2,075.1
1,325.1
Deferred income taxes
301.3
291.9
Other noncurrent liabilities
208.2
206.7
Total liabilities
3,149.2
2,324.0
Shareholders' equity
Preferred stock
—
—
Common stock
0.9
0.9
Treasury stock
(1,176.5
)
(1,187.0
)
Additional paid-in capital
859.9
839.0
Retained earnings
4,159.3
3,934.3
Accumulated other comprehensive
loss
(24.7
)
(45.8
)
Total shareholders' equity
3,818.9
3,541.4
Noncontrolling interest
(0.6
)
(0.2
)
Total equity
3,818.3
3,541.2
Total liabilities and equity
$
6,967.5
$
5,865.2
IDEX CORPORATION
Condensed Consolidated Statements
of Cash Flows
(in millions)
(unaudited)
Nine Months Ended September
30,
2024
2023
Cash flows from operating
activities
Net income
$
381.4
$
487.3
Adjustments to reconcile net income to
net cash flows provided by operating activities:
Gain on sale of business
(4.0
)
(93.8
)
Credit loss on note receivable from
collaborative partner
—
7.7
Depreciation
49.9
41.9
Amortization of intangible
assets
75.0
70.6
Share-based compensation
expense
20.9
18.9
Deferred income taxes
0.4
(1.8
)
Changes in (net of the effect from
acquisitions/divestitures and foreign currency
translation):
Receivables - net
(14.5
)
11.6
Inventories - net
(21.6
)
24.5
Other current assets
(4.6
)
0.3
Trade accounts payable
15.3
(30.2
)
Deferred revenue
(4.3
)
5.6
Accrued expenses
(0.5
)
(34.0
)
Other - net
2.1
7.1
Net cash flows provided by operating
activities
495.5
515.7
Cash flows from investing
activities
Capital expenditures
(49.6
)
(68.3
)
Acquisition of businesses, net of cash
acquired
(984.5
)
(110.3
)
Proceeds from sale of business, net of
cash remitted
45.1
110.3
Purchases of marketable
securities
—
(24.6
)
Proceeds from sale of marketable
securities
4.5
—
Other - net
(7.3
)
2.9
Net cash flows used in investing
activities
(991.8
)
(90.0
)
Cash flows from financing
activities
Borrowings under revolving credit
facilities
279.3
—
Proceeds from issuance of long-term
borrowings
496.7
100.0
Payment of long-term borrowings
(25.0
)
(250.0
)
Debt issuance costs
(1.2
)
—
Cash dividends paid to
shareholders
(153.0
)
(142.3
)
Proceeds from share issuances, net of
shares withheld for taxes
10.5
7.7
Repurchases of common stock
—
(1.1
)
Other - net
(0.6
)
(1.0
)
Net cash flows provided by (used in)
financing activities
606.7
(286.7
)
Effect of exchange rate changes on cash
and cash equivalents
6.6
(6.5
)
Net increase in cash and cash
equivalents and restricted cash
117.0
132.5
Cash and cash equivalents at beginning
of year(1)
534.3
430.2
Cash and cash equivalents and
restricted cash at end of period(1)
$
651.3
$
562.7
(1)
Includes $18.1 million of restricted cash
at September 30, 2024. The restricted cash has been included in
Other current assets in the Condensed Consolidated Balance Sheets.
There was no restricted cash as of September 30, 2023, December 31,
2023, or December 31, 2022.
IDEX CORPORATION
Company and Segment Financial
Information
(in millions)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Fluid & Metering
Technologies
Depreciation
$
4.3
$
3.1
$
12.9
$
10.3
Amortization of intangible
assets
5.2
5.6
15.7
17.3
Restructuring expenses and asset
impairments
1.0
1.7
1.6
2.4
Health & Science
Technologies
Depreciation
$
10.6
$
9.0
$
29.5
$
24.1
Amortization of intangible
assets
19.7
16.7
54.6
48.5
Restructuring expenses and asset
impairments
1.7
1.5
3.3
4.5
Fire & Safety/Diversified
Products
Depreciation
$
2.2
$
2.3
$
6.7
$
6.7
Amortization of intangible
assets
1.6
1.5
4.7
4.8
Restructuring expenses and asset
impairments
0.1
0.4
0.2
0.8
Corporate Office and
Eliminations
Depreciation
$
0.3
$
0.3
$
0.8
$
0.8
Restructuring expenses and asset
impairments
0.2
0.5
0.3
0.5
Total IDEX
Depreciation
$
17.4
$
14.7
$
49.9
$
41.9
Amortization of intangible
assets
26.5
23.8
75.0
70.6
Restructuring expenses and asset
impairments
3.0
4.1
5.4
8.2
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. The Company has
not provided a reconciliation of Mott’s expected EBITDA for fiscal
year 2024 or fiscal year 2025 because it is unable to quantify
certain amounts that would be required to be included in Mott’s
contribution to net income without unreasonable efforts. In
addition, the Company believes such reconciliation would imply a
degree of precision that would be confusing or misleading to
investors.
All table footnotes can be found at the end of this Non-GAAP
Measures section. 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 excluding 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 fair value inventory step-up
charges, plus restructuring expenses and asset impairments, less
the gain on sale of a business, 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 expense - net, taxes, depreciation and
amortization, or consolidated EBITDA, less the gain on sale of a
business, plus fair value inventory step-up charges, plus
restructuring expenses and asset impairments, 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. Free cash flow conversion is
calculated as free cash flow divided by adjusted net income
attributable to IDEX.
Table 1: Reconciliations of the Change
in Net Sales to Organic Net Sales
FMT
HST
FSDP
IDEX
Three Months Ended September
30, 2024
Change in net sales
—
%
(1
%)
4
%
1
%
Less:
Net impact from
acquisitions/divestitures(1)
(3
%)
4
%
—
%
1
%
Impact from foreign currency
1
%
—
%
—
%
—
%
Change in organic net sales
2
%
(5
%)
4
%
—
%
Nine Months Ended September
30, 2024
Change in net sales
(1
%)
(8
%)
2
%
(3
%)
Less:
Net impact from
acquisitions/divestitures(1)
(1
%)
2
%
—
%
—
%
Impact from foreign currency
—
%
—
%
—
%
—
%
Change in organic net sales
—
%
(10
%)
2
%
(3
%)
Table 2: Reconciliations of
Reported-to-Adjusted Gross Profit and Gross Margin (dollars in
millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Gross profit
$
353.9
$
349.6
$
1,078.1
$
1,110.1
Fair value inventory step-up
charge
2.1
1.2
4.6
1.2
Adjusted gross profit
$
356.0
$
350.8
$
1,082.7
$
1,111.3
Net sales
$
798.2
$
793.4
$
2,405.9
$
2,485.0
Gross margin
44.3
%
44.1
%
44.8
%
44.7
%
Adjusted gross margin
44.6
%
44.2
%
45.0
%
44.7
%
Table 3: Reconciliations of
Reported-to-Adjusted Net Income Attributable to IDEX and Diluted
EPS Attributable to IDEX (in millions, other than per share
amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Reported net income attributable to
IDEX
$
119.1
$
209.1
$
381.8
$
487.5
Fair value inventory step-up
charge
2.1
1.2
4.6
1.2
Tax impact on fair value inventory
step-up charge
(0.5
)
(0.3
)
(1.0
)
(0.3
)
Restructuring expenses and asset
impairments
3.0
4.1
5.4
8.2
Tax impact on restructuring expenses
and asset impairments
(0.7
)
(0.9
)
(1.3
)
(1.8
)
Gain on sale of business(2)
0.6
(93.8
)
(4.0
)
(93.8
)
Tax impact on gain of sale of
business
—
22.7
—
22.7
Credit loss on note receivable from
collaborative partner(3)
—
—
—
7.7
Tax impact on credit loss on note
receivable from collaborative partner
—
—
—
(1.6
)
Acquisition-related intangible asset
amortization
26.5
23.8
75.0
70.6
Tax impact on acquisition-related
intangible asset amortization
(6.0
)
(5.3
)
(17.1
)
(15.8
)
Adjusted net income attributable to
IDEX
$
144.1
$
160.6
$
443.4
$
484.6
Reported diluted EPS attributable to
IDEX
$
1.57
$
2.75
$
5.02
$
6.42
Fair value inventory step-up
charge
0.03
0.02
0.06
0.02
Tax impact on fair value inventory
step-up charge
—
—
(0.01
)
—
Restructuring expenses and asset
impairments
0.04
0.06
0.07
0.11
Tax impact on restructuring expenses
and asset impairments
(0.01
)
(0.01
)
(0.02
)
(0.03
)
Gain on sale of business(2)
0.01
(1.24
)
(0.05
)
(1.24
)
Tax impact on gain of sale of
business
—
0.30
—
0.30
Credit loss on note receivable from
collaborative partner(3)
—
—
—
0.10
Tax impact on credit loss on note
receivable from collaborative partner
—
—
—
(0.02
)
Acquisition-related intangible asset
amortization
0.35
0.31
0.99
0.93
Tax impact on acquisition-related
intangible asset amortization
(0.09
)
(0.07
)
(0.22
)
(0.21
)
Adjusted diluted EPS attributable to
IDEX
$
1.90
$
2.12
$
5.84
$
6.38
Diluted weighted average shares
outstanding
75.9
75.9
75.9
75.9
Table 4: Reconciliations of Net Income
to Adjusted EBITDA (dollars in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Reported net income
$
118.9
$
209.0
$
381.4
$
487.3
Provision for income taxes
35.5
52.8
106.7
132.8
Interest expense - net
10.3
13.7
27.8
40.1
Gain on sale of business(2)
0.6
(93.8
)
(4.0
)
(93.8
)
Depreciation
17.4
14.7
49.9
41.9
Amortization
26.5
23.8
75.0
70.6
Fair value inventory step-up
charges
2.1
1.2
4.6
1.2
Restructuring expenses and asset
impairments
3.0
4.1
5.4
8.2
Credit loss on note receivable from
collaborative partner(3)
—
—
—
7.7
Adjusted EBITDA
$
214.3
$
225.5
$
646.8
$
696.0
Adjusted EBITDA Components:
FMT
$
98.5
$
103.6
$
311.6
$
323.9
HST
82.6
84.4
248.2
278.8
FSDP
54.7
52.8
159.9
157.0
Corporate and other
(21.5
)
(15.3
)
(72.9
)
(63.7
)
Total Adjusted EBITDA
$
214.3
$
225.5
$
646.8
$
696.0
Net sales
$
798.2
$
793.4
$
2,405.9
$
2,485.0
Net income margin
14.9
%
26.3
%
15.9
%
19.6
%
Adjusted EBITDA margin
26.9
%
28.4
%
26.9
%
28.0
%
Table 5: Reconciliations of Cash Flows
from Operating Activities to Free Cash Flow (dollars in
millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Cash flows from operating
activities
$
205.3
$
226.6
$
495.5
$
515.7
Less: Capital expenditures
13.7
20.1
49.6
68.3
Free cash flow
$
191.6
$
206.5
$
445.9
$
447.4
Reported net income attributable to
IDEX
$
119.1
$
209.1
$
381.8
$
487.5
Adjusted net income attributable to
IDEX
144.1
160.6
443.4
484.6
Operating cash flow conversion
172
%
108
%
130
%
106
%
Free cash flow conversion
133
%
129
%
101
%
92
%
Table 6: Reconciliation of Estimated
2024 Change in Net Sales to Change in Organic Net Sales
Guidance
Fourth Quarter 2024
Full Year 2024
Low End
High End
Low End
High End
Change in net sales
10
%
11
%
—
%
1
%
Less:
Net impact from
acquisitions/divestitures
6
%
6
%
2
%
2
%
Impact from foreign currency
1
%
1
%
—
%
—
%
Change in organic net sales
3
%
4
%
(2
%)
(1
%)
Table 7: Reconciliation of Estimated
2024 Diluted EPS Attributable to IDEX to Adjusted Diluted EPS
Attributable to IDEX
Guidance
Fourth Quarter 2024
Full Year 2024
Estimated diluted EPS attributable to
IDEX
$1.64 - $1.69
$6.65 - $6.70
Fair value inventory step-up
charge
0.05
0.12
Tax impact on fair value inventory
step-up charge
(0.01)
(0.03)
Restructuring expenses and asset
impairments
—
0.08
Tax impact on restructuring expenses
and asset impairments
—
(0.02)
Gain on sale of business
—
(0.05)
Tax impact on gain of sale of
business
—
—
Acquisition-related intangible asset
amortization
0.43
1.42
Tax impact on acquisition-related
intangible asset amortization
(0.10)
(0.32)
Estimated adjusted diluted EPS
attributable to IDEX
$2.01 - $2.06
$7.85 - $7.90
Table 8: Reconciliation of Estimated 2024 Net Income to
Adjusted EBITDA (dollars in millions)
Guidance
Fourth Quarter 2024
Full Year 2024
Low End
High End
Low End
High End
Estimated Reported net income
$
123.1
$
127.4
$
504.5
$
508.8
Provision for income taxes
38.0
39.4
144.7
146.1
Interest expense - net
18.2
18.2
46.0
46.0
Gain on sale of business
—
—
(4.0
)
(4.0
)
Depreciation
19.3
19.3
69.2
69.2
Amortization of intangible
assets
32.6
32.6
107.6
107.6
Fair value inventory step-up
charge
4.2
4.2
8.8
8.8
Restructuring expenses and asset
impairments
0.4
0.4
5.8
5.8
Estimated Adjusted EBITDA
$
235.8
$
241.5
$
882.6
$
888.3
Estimated Net sales
$
874.3
$
882.3
$
3,280.2
$
3,288.2
Estimated Net income margin
14.1
%
14.4
%
15.4
%
15.5
%
Estimated Adjusted EBITDA
margin
27.0
%
27.4
%
26.9
%
27.0
%
(1)
Represents the sales from acquired or
divested businesses during the first 12 months of ownership or
prior to divestiture.
(2)
Activity recorded during the three months
ended September 30, 2024 represents the finalization of the gain on
the sale of Alfa Valvole, Srl resulting in a $0.6 million downward
adjustment during the third quarter of 2024.
(3)
Represents a reserve on an investment with
a collaborative partner recorded in Other expense (income) – net
during the nine months ended September 30, 2023. During the fourth
quarter of 2023, the Company converted the promissory note
receivable from the collaborative partner to equity, resulting in a
cost method investment with zero value.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241029769149/en/
Investor Contact: Wendy Palacios Vice President FP&A
and Investor Relations (847) 498-7070
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