UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report: January 29, 2018
(Date of earliest event reported)
IDEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 1-10235 | 36-3555336 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
of incorporation) | Identification No.) | |||
1925 W. Field Court
Lake Forest, Illinois 60045
(Address of principal executive offices, including zip code)
(847) 498-7070
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02 – Results of Operations and Financial Condition.
On January 29, 2018, IDEX Corporation (the “Company”) issued a press release announcing financial results for the period ended December 31, 2017.
A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Current Report furnished pursuant to Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. This information shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended.
Item 9.01 – Financial Statements and Exhibits.
(d) | Exhibits |
99.1 | Press release dated January 29, 2018 announcing IDEX Corporation’s quarterly and annual operating results. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
IDEX CORPORATION | ||
By: | /s/ WILLIAM K. GROGAN | |
William K. Grogan | ||
Senior Vice President and Chief Financial Officer | ||
January 29, 2018 | ||
EXHBIT INDEX
Exhibit Number | Description | |
99.1 | ||
For further information: TRADED: NYSE (IEX)
Investor Contact:
William K. Grogan
Senior Vice President and Chief Financial Officer
(847) 498-7070
MONDAY, JANUARY 29, 2018
IDEX REPORTS RECORD FOURTH QUARTER AND FULL YEAR 2017 RESULTS;
Q4 ORDERS AND SALES UP 10 PERCENT OVERALL AND 9 PERCENT ORGANICALLY;
Q4 REPORTED EPS WAS $1.21 WITH ADJUSTED EPS OF $1.12
LAKE FOREST, IL, JANUARY 29 - IDEX Corporation (NYSE: IEX) today announced its financial results for the three- and twelve- month periods ended December 31, 2017.
Full Year 2017 Highlights
• | Orders were up 9 percent overall and 7 percent organically |
• | Sales were up 8 percent overall and 6 percent organically |
• | Reported EPS was $4.36 with adjusted EPS of $4.31, up 15 percent |
• | Cash from operations of $432.8 million led to FCF of $388.9 million, 117 percent of adjusted net income |
• | Acquired thinXXS Microtechnology and divested Faure Herman |
• | The enactment of the Tax Cuts and Jobs Act resulted in a $0.1 million net income tax benefit |
Full Year 2017
Orders of $2.3 billion were up 9 percent compared with the prior year (+7 percent organic and +2 percent acquisitions/divestitures).
Sales of $2.3 billion were up 8 percent compared with the prior year (+6 percent organic and +2 percent acquisitions/divestitures).
Gross margin of 44.9 percent was up 90 basis points compared with the prior year. Excluding $14.7 million of pre-tax fair value inventory step-up charges from acquisitions in the prior year period, gross margin increased 20 basis points.
Operating income of $502.6 million resulted in an operating margin of 22.0 percent. Excluding a $9.3 million gain on divestiture and $8.5 million of restructuring expenses, adjusted operating income was $501.7 million with an adjusted operating margin of 21.9 percent, up 120 basis points from the prior year. Excluding the fair value step-up charges from acquisitions in the prior year period, adjusted operating margin was up 50 basis points. Adjusted operating income drove adjusted EBITDA of $583.6 million which was 26 percent of sales and covered interest expense by 13 times.
Provision for income taxes of $118.0 million resulted in an effective tax rate (ETR) of 25.9 percent and included the tax impact from the gain on divestiture and restructuring expenses. Excluding the tax impact from the gain on divestiture and restructuring expenses, provision for income taxes was $120.8 million which resulted in an adjusted ETR of 26.6 percent.
Net income was $337.3 million which resulted in EPS of $4.36. Excluding the gain on divestiture and restructuring expenses, adjusted EPS of $4.31 increased 56 cents, or 15 percent, from prior year adjusted EPS.
Cash from operations of $432.8 million was up 8 percent from the prior year and led to free cash flow of $388.9 million, which was up 8 percent from the prior year and 117 percent of adjusted net income.
Fourth Quarter 2017
Orders of $603.0 million were up 10 percent compared with the prior year period (+9 percent organic, -1 percent acquisition/divestitures and +2 percent foreign currency translation).
Sales of $585.9 million were up 10 percent compared with the prior year period (+9 percent organic, -1 percent acquisition/divestitures and +2 percent foreign currency translation).
Gross margin of 44.5 percent was up 70 basis points compared with the prior year period. Excluding the $4.4 million pre-tax fair value inventory step-up charge from an acquisition in the prior year period, gross margin was down 20 basis points primarily due to additional engineering investments and operational challenges associated with the strong growth within HST.
Operating income of $135.2 million resulted in an operating margin of 23.1 percent. Excluding a $9.3 million gain on divestiture and $3.7 million of restructuring expenses, adjusted operating income was $129.6 million with an adjusted operating margin of 22.1 percent, up 150 basis points from the prior year. Excluding the fair value step-up charge from an acquisition in the prior year period, adjusted operating margin was up 60 basis points. Adjusted operating income drove adjusted EBITDA of $149.4 million which was 25 percent of sales and covered interest expense by 14 times.
Provision for income taxes of $29.9 million resulted in an ETR of 24.2 percent and included the tax impact from the gain on divestiture and restructuring expenses. Excluding the tax impact from the gain on divestiture and restructuring expenses, provision for income taxes was $31.1 million which resulted in an adjusted ETR of 26.4 percent.
Net income was $93.7 million which resulted in EPS of $1.21. Excluding the gain on divestiture and restructuring expenses, adjusted EPS of $1.12 increased 16 cents, or 17 percent, from the prior year period adjusted EPS.
Cash from operations of $136.2 million was up 18 percent from the prior year period and led to free cash flow of $120.4 million, which was up 14 percent from the prior year period and 139 percent of adjusted net income.
“Strong demand and solid execution, coupled with favorable market conditions, drove a record year for IDEX. We delivered all-time highs in orders, sales, operating margin, EPS and free cash flow. Our fourth quarter adjusted EPS of $1.12 was also a record and 5 cents above the midpoint of our previous guidance, 2 cents of which was operational over-performance while 3 cents was due to a lower effective tax rate compared to our prior estimate. While I am very pleased with our financial results, I am even more encouraged with the organization's progress on our targeted organic growth initiatives. This once again enabled us to outperform the market, evidenced by our 9 percent organic growth rate for both orders and sales within the fourth quarter. | |
In the fourth quarter we executed on our disciplined capital deployment and segmentation strategies as we sold our Faure Herman business within our Energy group, and purchased thinXXS to support our microfluidics technologies within our Scientific Fluidics & Optics group. We continue to invest in the best organic growth opportunities and remain committed to strategic M&A, shareholder dividends and opportunistically repurchasing shares. Tax Reform in the United States will help bolster our already strong financial profile by providing additional earnings, cash flow and capital availability. We will use these additional resources to drive our existing strategy to maximize profitable growth and strong returns on capital. In line with our expectations for earnings growth in 2018, and subject to Board approval, we intend to raise our dividend 15 to 18 percent which would take us to the high end of our stated goal of distributing 30 to 35 percent of earnings to our shareholders. | |
Based on continued order strength in the fourth quarter, as well as benefits from our growth initiatives and segmentation efforts, we project approximately 5 percent organic revenue growth in 2018. Full year 2018 EPS is expected to be in the range of $4.90 to $5.10, with first quarter EPS in the range of $1.20 to $1.24. At the mid-point of our expected full year 2018 guidance, EPS is up 69 cents, or 16 percent, compared to adjusted 2017 EPS of $4.31. Approximately 60 percent of the increase is due to our organic growth and operational initiatives, while the remaining 40 percent is the result of an expected 2018 effective tax rate in the range of 22 to 23 percent." | |
Andrew K. Silvernail | |
Chairman and Chief Executive Officer | |
Fourth Quarter 2017 Segment Highlights
Fluid & Metering Technologies
• | Sales of $222.1 million reflected a 7 percent increase compared to the fourth quarter of 2016 (+7 organic, -2 percent divestiture and +2 percent foreign currency translation). |
• | Operating income of $61.2 million resulted in an operating margin of 27.6 percent. Excluding $1.8 million of restructuring expenses, adjusted operating income was $63.0 million with an adjusted operating margin of 28.4 percent, a 100 basis point increase compared to the prior year period primarily due to higher volume and productivity initiatives. |
• | EBITDA of $66.7 million resulted in an EBITDA margin of 30.0 percent. Excluding $1.8 million of restructuring expenses, adjusted EBITDA of $68.5 million resulted in an adjusted EBITDA margin of 30.8 percent, a 60 basis point increase compared to the prior year period. |
Health & Science Technologies
• | Sales of $208.9 million reflected an 11 percent increase compared to the fourth quarter of 2016 (+11 percent organic, -2 percent acquisition/divestiture and +2 percent foreign currency translation). |
• | Operating income of $44.9 million resulted in an operating margin of 21.5 percent. Excluding $1.7 million of restructuring expenses, adjusted operating income was $46.6 million with an adjusted operating margin of 22.3 percent, a 330 basis point increase compared to the prior year period primarily due to the $4.4 million pre-tax fair value inventory step-up charge from the SFC acquisition and higher volume. |
• | EBITDA of $56.7 million resulted in an EBITDA margin of 27.1 percent. Excluding $1.7 million of restructuring expenses, adjusted EBITDA of $58.4 million resulted in an adjusted EBITDA margin of 27.9 percent, a 210 basis point increase compared to the prior year period. |
Fire & Safety/Diversified Products
• | Sales of $155.5 million reflected a 15 percent increase compared to the fourth quarter of 2016 (+12 percent organic and +3 percent foreign currency translation). |
• | Operating income of $41.0 million resulted in an operating margin of 26.4 percent. Excluding $0.2 million of restructuring expenses, adjusted operating income was $41.2 million with an adjusted operating margin of 26.5 percent, a 250 basis point increase compared to the prior year period primarily due to higher volume and productivity initiatives. |
• | EBITDA of $44.3 million resulted in an EBITDA margin of 28.5 percent. Excluding $0.2 million of restructuring expenses, adjusted EBITDA of $44.5 million resulted in an adjusted EBITDA margin of 28.6 percent, a 190 basis point increase compared to the prior year period. |
For the fourth quarter of 2017, Fluid & Metering Technologies contributed 38 percent of sales, 41 percent of operating income and 40 percent of EBITDA; Health & Science Technologies accounted for 36 percent of sales, 31 percent of operating income and 34 percent of EBITDA; and Fire & Safety/Diversified Products represented 26 percent of sales, 28 percent of operating income and 26 percent of EBITDA.
Corporate Costs
Corporate costs, excluding the net loss (gain) on divestitures, increased to $21.2 million in the fourth quarter of 2017 from $15.5 million in the fourth quarter of 2016 as a result of higher variable and stock compensation and outside consulting costs.
Corporate costs, excluding restructuring expenses and the net loss (gain) on divestitures, increased to $74.2 million in 2017 compared to $59.9 million in 2016 as a result of higher variable and stock compensation and outside consulting costs in 2017 and the prior year benefiting from the reversal of $4.7 million of contingent consideration.
Restructuring Actions
The Company recorded $3.7 million and $8.5 million of restructuring expenses in the fourth quarter and full year 2017, 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.
Acquisition/Divestiture
In October 2017, the Company divested Faure Herman, a business within the Energy group of our Fluid & Metering Technologies segment. This business, which no longer aligned with our long-term strategic objectives, was sold for cash proceeds of $21.8 million and generated a gain of $9.3 million. This business contributed approximately $14 million of revenue through its date of sale which was included in the Company’s 2017 results.
In December 2017, the Company acquired thinXXS, a leader in the design, manufacture and sale of microfluidic components for the life science market. The addition of thinXXS to the Company's existing Scientific Fluidics and Optics portfolio, within the Health & Science Technologies segment, provides us with a solid position as the next generation microfluidics technologies are adopted.
Tax Cuts and Jobs Act of 2017
In December 2017, the Tax Cuts and Jobs Act (Tax Reform) was enacted and lowers U.S. corporate income tax rates as of January 1, 2018, implements a territorial tax system and imposes a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The estimated impact of Tax Reform was a decrease in income tax expense of $0.1 million in the fourth quarter of 2017. Although the net effect from Tax Reform was insignificant, there were several offsetting adjustments including a $40.6 million tax benefit due to the effects of the remeasurement of U.S. deferred taxes at the lower enacted corporate tax rate of 21 percent, offset by $30.2 million of expense related to repatriation taxes and $10.3 million of other tax expense due to tax planning strategies implemented in the fourth quarter of 2017 as a result of Tax Reform. These tax planning strategies will allow us increased flexibility to access our worldwide cash balances. The impact of Tax Reform may differ from this estimate due to, among other things, further refinement of the Company's calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of Tax Reform.
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 plus the pension settlement charge, 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 plus the pension settlement charge. |
• | 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 December 31, 2017 | For the Year Ended December 31, 2017 | ||||||||||||||||||||||
FMT | HST | FSDP | IDEX | FMT | HST | FSDP | IDEX | ||||||||||||||||
Change in net sales | 7 | % | 11 | % | 15 | % | 10 | % | 4 | % | 10 | % | 13 | % | 8 | % | |||||||
- Net impact from acquisitions/divestitures | (2 | )% | (2 | )% | — | % | (1 | )% | (2 | )% | 3 | % | 9 | % | 2 | % | |||||||
- Impact from FX | 2 | % | 2 | % | 3 | % | 2 | % | — | % | (1 | )% | — | % | — | % | |||||||
Change in organic net sales | 7 | % | 11 | % | 12 | % | 9 | % | 6 | % | 8 | % | 4 | % | 6 | % | |||||||
Table 2: Reconciliations of Reported-to-Adjusted Operating Income and Margin (dollars in thousands)
For the Quarter Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 (a) | ||||||||||||||||||||||||||||||||||||||
FMT | HST | FSDP | Corporate | IDEX | FMT | HST | FSDP | Corporate | IDEX | ||||||||||||||||||||||||||||||
Reported operating income (loss) | $ | 61,200 | $ | 44,962 | $ | 41,006 | $ | (11,920 | ) | $135,248 | $ | 55,718 | $ | 34,706 | $ | 31,039 | $ | (35,942 | ) | $85,521 | |||||||||||||||||||
+ Restructuring expenses | 1,808 | 1,668 | 182 | — | 3,658 | 932 | 1,117 | 1,425 | 200 | 3,674 | |||||||||||||||||||||||||||||
+ Loss (gain) on sale of businesses - net | — | — | — | (9,273 | ) | (9,273 | ) | — | — | — | 20,231 | 20,231 | |||||||||||||||||||||||||||
Adjusted operating income (loss) | $ | 63,008 | $ | 46,630 | $ | 41,188 | $ | (21,193 | ) | $ | 129,633 | $ | 56,650 | $ | 35,823 | $ | 32,464 | $ | (15,511 | ) | $ | 109,426 | |||||||||||||||||
Net sales (eliminations) | $ | 222,052 | $ | 208,916 | $ | 155,504 | $ | (568 | ) | $ | 585,904 | $ | 207,113 | $ | 188,334 | $ | 135,013 | $ | (41 | ) | $ | 530,419 | |||||||||||||||||
Reported operating margin | 27.6 | % | 21.5 | % | 26.4 | % | n/m | 23.1 | % | 26.9 | % | 18.4 | % | 23.0 | % | n/m | 16.1 | % | |||||||||||||||||||||
Adjusted operating margin | 28.4 | % | 22.3 | % | 26.5 | % | n/m | 22.1 | % | 27.4 | % | 19.0 | % | 24.0 | % | n/m | 20.6 | % | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 (a) | ||||||||||||||||||||||||||||||||||||||
FMT | HST | FSDP | Corporate | IDEX | FMT | HST | FSDP | Corporate | IDEX | ||||||||||||||||||||||||||||||
Reported operating income (loss) | $ | 241,030 | $ | 179,567 | $ | 147,028 | $ | (65,069 | ) | $502,556 | $ | 217,500 | $ | 153,691 | $ | 123,605 | $ | (82,399 | ) | $412,397 | |||||||||||||||||||
+ Restructuring expenses | 3,374 | 4,696 | 255 | 130 | 8,455 | 932 | 1,117 | 1,425 | 200 | 3,674 | |||||||||||||||||||||||||||||
+ Loss (gain) on sale of businesses - net | — | — | — | (9,273 | ) | (9,273 | ) | — | — | — | 22,298 | 22,298 | |||||||||||||||||||||||||||
Adjusted operating income (loss) | $ | 244,404 | $ | 184,263 | $ | 147,283 | $ | (74,212 | ) | $ | 501,738 | $ | 218,432 | $ | 154,808 | $ | 125,030 | $ | (59,901 | ) | $ | 438,369 | |||||||||||||||||
Net sales (eliminations) | $ | 880,957 | $ | 820,131 | $ | 587,533 | $ | (1,309 | ) | $ | 2,287,312 | $ | 849,101 | $ | 744,809 | $ | 520,009 | $ | (876 | ) | $ | 2,113,043 | |||||||||||||||||
Reported operating margin | 27.4 | % | 21.9 | % | 25.0 | % | n/m | 22.0 | % | 25.6 | % | 20.6 | % | 23.8 | % | n/m | 19.5 | % | |||||||||||||||||||||
Adjusted operating margin | 27.7 | % | 22.5 | % | 25.1 | % | n/m | 21.9 | % | 25.7 | % | 20.8 | % | 24.0 | % | n/m | 20.7 | % | |||||||||||||||||||||
Table 3: Reconciliations of Reported-to-Adjusted Net Income and EPS (in thousands, except EPS)
For the Quarter Ended December 31, | For the Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Reported net income | $ | 93,746 | $ | 57,347 | $ | 337,257 | $ | 271,109 | |||||||
+ Restructuring expenses | 3,658 | 3,674 | 8,455 | 3,674 | |||||||||||
+ Tax impact on restructuring expenses | (1,243 | ) | (1,299 | ) | (2,772 | ) | (1,299 | ) | |||||||
+ Loss (gain) on sale of businesses - net | (9,273 | ) | 20,231 | (9,273 | ) | 22,298 | |||||||||
+ Tax impact on loss (gain) on sale of businesses - net | — | (8,239 | ) | — | (9,706 | ) | |||||||||
+ Pension settlement | — | 3,554 | — | 3,554 | |||||||||||
+ Tax impact on pension settlement | — | (1,257 | ) | — | (1,257 | ) | |||||||||
Adjusted net income | $ | 86,888 | $ | 74,011 | $ | 333,667 | $ | 288,373 | |||||||
For the Quarter Ended December 31, | For the Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Reported EPS | $ | 1.21 | $ | 0.75 | $ | 4.36 | $ | 3.53 | |||||||
+ Restructuring expenses | 0.05 | 0.05 | 0.11 | 0.05 | |||||||||||
+ Tax impact on restructuring expenses | (0.02 | ) | (0.02 | ) | (0.04 | ) | (0.02 | ) | |||||||
+ Loss (gain) on sale of businesses - net | (0.12 | ) | 0.26 | (0.12 | ) | 0.29 | |||||||||
+ Tax impact on loss (gain) on sale of businesses - net | — | (0.11 | ) | — | (0.13 | ) | |||||||||
+ Pension settlement | — | 0.05 | — | 0.05 | |||||||||||
+ Tax impact on pension settlement | — | (0.02 | ) | — | (0.02 | ) | |||||||||
Adjusted EPS | $ | 1.12 | $ | 0.96 | $ | 4.31 | $ | 3.75 | |||||||
Diluted weighted average shares | 77,597 | 76,806 | 77,333 | 76,758 | |||||||||||
Table 4: Reconciliations of EBITDA to Net Income (dollars in thousands)
For the Quarter Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 (a) | ||||||||||||||||||||||||||||||||||||||
FMT | HST | FSDP | Corporate | IDEX | FMT | HST | FSDP | Corporate | IDEX | ||||||||||||||||||||||||||||||
Reported operating income (loss) | $ | 61,200 | $ | 44,962 | $ | 41,006 | $ | (11,920 | ) | $ | 135,248 | $ | 55,718 | $ | 34,706 | $ | 31,039 | $ | (35,942 | ) | $ | 85,521 | |||||||||||||||||
- Other (income) expense - net | 300 | (892 | ) | 296 | 973 | 677 | 2,500 | (443 | ) | 646 | (1,938 | ) | 765 | ||||||||||||||||||||||||||
+ Depreciation and amortization | 5,764 | 10,840 | 3,603 | 203 | 20,410 | 6,447 | 12,254 | 3,640 | 227 | 22,568 | |||||||||||||||||||||||||||||
EBITDA | 66,664 | 56,694 | 44,313 | (12,690 | ) | 154,981 | 59,665 | 47,403 | 34,033 | (33,777 | ) | 107,324 | |||||||||||||||||||||||||||
- Interest expense | 10,969 | 12,009 | |||||||||||||||||||||||||||||||||||||
- Provision for income taxes | 29,856 | 15,400 | |||||||||||||||||||||||||||||||||||||
- Depreciation and amortization | 20,410 | 22,568 | |||||||||||||||||||||||||||||||||||||
Reported net income | $ | 93,746 | $ | 57,347 | |||||||||||||||||||||||||||||||||||
Net sales (eliminations) | $ | 222,052 | $ | 208,916 | $ | 155,504 | $ | (568 | ) | $ | 585,904 | $ | 207,113 | $ | 188,334 | $ | 135,013 | $ | (41 | ) | $ | 530,419 | |||||||||||||||||
Reported operating margin | 27.6 | % | 21.5 | % | 26.4 | % | n/m | 23.1 | % | 26.9 | % | 18.4 | % | 23.0 | % | n/m | 16.1 | % | |||||||||||||||||||||
EBITDA margin | 30.0 | % | 27.1 | % | 28.5 | % | n/m | 26.5 | % | 28.8 | % | 25.2 | % | 25.2 | % | n/m | 20.2 | % | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 (a) | ||||||||||||||||||||||||||||||||||||||
FMT | HST | FSDP | Corporate | IDEX | FMT | HST | FSDP | Corporate | IDEX | ||||||||||||||||||||||||||||||
Reported operating income (loss) | $ | 241,030 | $ | 179,567 | $ | 147,028 | $ | (65,069 | ) | $ | 502,556 | $ | 217,500 | $ | 153,691 | $ | 123,605 | $ | (82,399 | ) | $ | 412,397 | |||||||||||||||||
- Other (income) expense - net | 1,007 | (795 | ) | 1,959 | 223 | 2,394 | 3,066 | (1,991 | ) | 161 | (2,967 | ) | (1,731 | ) | |||||||||||||||||||||||||
+ Depreciation and amortization | 23,587 | 45,287 | 14,541 | 801 | 84,216 | 28,458 | 45,298 | 11,956 | 1,180 | 86,892 | |||||||||||||||||||||||||||||
EBITDA | 263,610 | 225,649 | 159,610 | (64,491 | ) | 584,378 | 242,892 | 200,980 | 135,400 | (78,252 | ) | 501,020 | |||||||||||||||||||||||||||
- Interest expense | 44,889 | 45,616 | |||||||||||||||||||||||||||||||||||||
- Provision for income taxes | 118,016 | 97,403 | |||||||||||||||||||||||||||||||||||||
- Depreciation and amortization | 84,216 | 86,892 | |||||||||||||||||||||||||||||||||||||
Reported net income | $337,257 | $271,109 | |||||||||||||||||||||||||||||||||||||
Net sales (eliminations) | $ | 880,957 | $ | 820,131 | $ | 587,533 | $ | (1,309 | ) | $ | 2,287,312 | $ | 849,101 | $ | 744,809 | $ | 520,009 | $ | (876 | ) | $ | 2,113,043 | |||||||||||||||||
Reported operating margin | 27.4 | % | 21.9 | % | 25.0 | % | n/m | 22.0 | % | 25.6 | % | 20.6 | % | 23.8 | % | n/m | 19.5 | % | |||||||||||||||||||||
EBITDA margin | 29.9 | % | 27.5 | % | 27.2 | % | n/m | 25.5 | % | 28.6 | % | 27.0 | % | 26.0 | % | n/m | 23.7 | % | |||||||||||||||||||||
Table 5: Reconciliations of EBITDA to Adjusted EBITDA (dollars in thousands)
For the Quarter Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||||||||||||||||
FMT | HST | FSDP | Corporate | IDEX | FMT | HST | FSDP | Corporate | IDEX | ||||||||||||||||||||||||||||||
EBITDA | $ | 66,664 | $ | 56,694 | $ | 44,313 | $ | (12,690 | ) | $ | 154,981 | $ | 59,665 | $ | 47,403 | $ | 34,033 | $ | (33,777 | ) | $ | 107,324 | |||||||||||||||||
+ Restructuring expenses | 1,808 | 1,668 | 182 | — | 3,658 | 932 | 1,117 | 1,425 | 200 | 3,674 | |||||||||||||||||||||||||||||
+ Loss (gain) on sale of businesses - net | — | — | — | (9,273 | ) | (9,273 | ) | — | — | — | 20,231 | 20,231 | |||||||||||||||||||||||||||
+ Pension settlement | — | — | — | — | — | 2,032 | — | 540 | 982 | 3,554 | |||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 68,472 | $ | 58,362 | $ | 44,495 | $ | (21,963 | ) | $ | 149,366 | $ | 62,629 | $ | 48,520 | $ | 35,998 | $ | (12,364 | ) | $ | 134,783 | |||||||||||||||||
Adjusted EBITDA margin | 30.8 | % | 27.9 | % | 28.6 | % | n/m | 25.5 | % | 30.2 | % | 25.8 | % | 26.7 | % | n/m | 25.4 | % | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||||||||||||||||
FMT | HST | FSDP | Corporate | IDEX | FMT | HST | FSDP | Corporate | IDEX | ||||||||||||||||||||||||||||||
EBITDA | $ | 263,610 | $ | 225,649 | $ | 159,610 | $ | (64,491 | ) | $ | 584,378 | $ | 242,892 | $ | 200,980 | $ | 135,400 | $ | (78,252 | ) | $ | 501,020 | |||||||||||||||||
+ Restructuring expenses | 3,374 | 4,696 | 255 | 130 | 8,455 | 932 | 1,117 | 1,425 | 200 | 3,674 | |||||||||||||||||||||||||||||
+ Loss (gain) on sale of businesses - net | — | — | — | (9,273 | ) | (9,273 | ) | — | — | — | 22,298 | 22,298 | |||||||||||||||||||||||||||
+ Pension settlement | — | — | — | — | — | 2,032 | — | 540 | 982 | 3,554 | |||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 266,984 | $ | 230,345 | $ | 159,865 | $ | (73,634 | ) | $ | 583,560 | $ | 245,856 | $ | 202,097 | $ | 137,365 | $ | (54,772 | ) | $ | 530,546 | |||||||||||||||||
Adjusted EBITDA margin | 30.3 | % | 28.1 | % | 27.2 | % | n/m | 25.5 | % | 29.0 | % | 27.1 | % | 26.4 | % | n/m | 25.1 | % | |||||||||||||||||||||
Table 6: Reconciliations of Free Cash Flow (in thousands)
For the Quarter Ended | For the Year Ended December 31, | ||||||||||||||||||
December 31, | September 30, | ||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||
Cash flow from operating activities | $ | 136,173 | $ | 115,593 | $ | 124,000 | $ | 432,753 | $ | 399,917 | |||||||||
- Capital expenditures | 15,804 | 9,600 | 8,515 | 43,858 | 38,242 | ||||||||||||||
Free cash flow | $ | 120,369 | $ | 105,993 | $ | 115,485 | $ | 388,895 | $ | 361,675 | |||||||||
Table 7: Reconciliations of Reported Effective Tax Rate to Adjusted Effective Tax Rate (dollars in thousands)
For the quarter ended December 31, 2017 | For the year ended December 31, 2017 | |||||||||||||||||||
Income before income taxes | Provision for Income Taxes | Effective Tax Rate | Income before income taxes | Provision for Income Taxes | Effective Tax Rate | |||||||||||||||
Reported | $ | 123,602 | $ | 29,856 | 24.2% | $ | 455,273 | $ | 118,016 | 25.9 | % | |||||||||
+ Restructuring expenses | 3,658 | 1,243 | 8,455 | 2,772 | ||||||||||||||||
+ Gain on divestiture | (9,273 | ) | — | (9,273 | ) | — | ||||||||||||||
Adjusted | $ | 117,987 | $ | 31,099 | 26.4% | $ | 454,455 | $ | 120,788 | 26.6 | % | |||||||||
Conference Call to be Broadcast over the Internet
IDEX will broadcast its fourth quarter earnings conference call over the Internet on Tuesday, January 30, 2018 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 #13675214.
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 “anticipate,” “estimate,” “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 IDEX’s results, particularly in light of the low levels of order backlogs it typically maintains; its 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; 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 December 31, | For the Year Ended December 31, | ||||||||||||||
2017 | 2016 (a) | 2017 | 2016 (a) | ||||||||||||
Net sales | $ | 585,904 | $ | 530,419 | $ | 2,287,312 | $ | 2,113,043 | |||||||
Cost of sales | 325,022 | 297,934 | 1,260,634 | 1,182,276 | |||||||||||
Gross profit | 260,882 | 232,485 | 1,026,678 | 930,767 | |||||||||||
Selling, general and administrative expenses | 131,249 | 123,059 | 524,940 | 492,398 | |||||||||||
Loss (gain) on sale of businesses - net | (9,273 | ) | 20,231 | (9,273 | ) | 22,298 | |||||||||
Restructuring expenses | 3,658 | 3,674 | 8,455 | 3,674 | |||||||||||
Operating income | 135,248 | 85,521 | 502,556 | 412,397 | |||||||||||
Other (income) expense — net | 677 | 765 | 2,394 | (1,731 | ) | ||||||||||
Interest expense | 10,969 | 12,009 | 44,889 | 45,616 | |||||||||||
Income before income taxes | 123,602 | 72,747 | 455,273 | 368,512 | |||||||||||
Provision for income taxes | 29,856 | 15,400 | 118,016 | 97,403 | |||||||||||
Net income | $ | 93,746 | $ | 57,347 | $ | 337,257 | $ | 271,109 | |||||||
Earnings per Common Share (b): | |||||||||||||||
Basic earnings per common share | $ | 1.23 | $ | 0.75 | $ | 4.41 | $ | 3.57 | |||||||
Diluted earnings per common share | $ | 1.21 | $ | 0.75 | $ | 4.36 | $ | 3.53 | |||||||
Share Data: | |||||||||||||||
Basic weighted average common shares outstanding | 76,283 | 75,955 | 76,232 | 75,803 | |||||||||||
Diluted weighted average common shares outstanding | 77,597 | 76,806 | 77,333 | 76,758 | |||||||||||
IDEX CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 375,950 | $ | 235,964 | |||
Receivables - net | 294,166 | 272,813 | |||||
Inventories | 259,724 | 252,859 | |||||
Other current assets | 74,203 | 61,085 | |||||
Total current assets | 1,004,043 | 822,721 | |||||
Property, plant and equipment - net | 258,350 | 247,816 | |||||
Goodwill and intangible assets | 2,118,904 | 2,068,096 | |||||
Other noncurrent assets | 18,331 | 16,311 | |||||
Total assets | $ | 3,399,628 | $ | 3,154,944 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities | |||||||
Trade accounts payable | $ | 147,067 | $ | 128,933 | |||
Accrued expenses | 184,705 | 152,852 | |||||
Short-term borrowings | 258 | 1,046 | |||||
Dividends payable | 28,945 | 26,327 | |||||
Total current liabilities | 360,975 | 309,158 | |||||
Long-term borrowings | 858,788 | 1,014,235 | |||||
Other noncurrent liabilities | 293,323 | 287,657 | |||||
Total liabilities | 1,513,086 | 1,611,050 | |||||
Shareholders' equity | 1,886,542 | 1,543,894 | |||||
Total liabilities and shareholders' equity | $ | 3,399,628 | $ | 3,154,944 | |||
IDEX CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
For the Year Ended December 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 337,257 | $ | 271,109 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss (gain) on sale of fixed assets | 315 | (28 | ) | ||||
Loss (gain) on sale of businesses - net | (9,273 | ) | 22,298 | ||||
Asset impairments | — | 205 | |||||
Depreciation and amortization | 38,314 | 37,854 | |||||
Amortization of intangible assets | 45,902 | 49,038 | |||||
Amortization of debt issuance expenses | 1,320 | 1,295 | |||||
Share-based compensation expense | 24,405 | 20,326 | |||||
Deferred income taxes | (33,742 | ) | (17,308 | ) | |||
Non-cash interest expense associated with forward starting swaps | 6,655 | 6,851 | |||||
Pension settlement | — | 3,554 | |||||
Changes in (net of the effect from acquisitions and divestitures): | |||||||
Receivables | (15,803 | ) | 302 | ||||
Inventories | 760 | 32,747 | |||||
Other current assets | (20,031 | ) | (22,006 | ) | |||
Trade accounts payable | 12,556 | 73 | |||||
Accrued expenses | 19,710 | (5,470 | ) | ||||
Other — net | 24,408 | (c) | (923 | ) | |||
Net cash flows provided by operating activities | 432,753 | 399,917 | |||||
Cash flows from investing activities | |||||||
Purchases of property, plant and equipment | (43,858 | ) | (38,242 | ) | |||
Acquisition of businesses, net of cash acquired | (38,161 | ) | (510,001 | ) | |||
Proceeds from sale of business | 21,795 | 39,064 | |||||
Proceeds from fixed asset disposals | 6,011 | 49 | |||||
Other — net | (533 | ) | (69 | ) | |||
Net cash flows used in investing activities | (54,746 | ) | (509,199 | ) | |||
Cash flows from financing activities | |||||||
Borrowings under revolving facilities | 33,000 | 501,529 | |||||
Proceeds from issuance of 3.20% Senior Notes | — | 100,000 | |||||
Proceeds from issuance of 3.37% Senior Notes | — | 100,000 | |||||
Payments under revolving facilities | (200,618 | ) | (520,125 | ) | |||
Debt issuance costs | — | (246 | ) | ||||
Dividends paid | (111,172 | ) | (102,650 | ) | |||
Proceeds from stock option exercises | 22,935 | 30,240 | |||||
Purchase of common stock | (29,074 | ) | (57,272 | ) | |||
Unvested shares surrendered for tax withholding | (6,228 | ) | (4,928 | ) | |||
Settlement of foreign exchange contracts | 13,736 | — | |||||
Net cash flows (used in) provided by financing activities | (277,421 | ) | 46,548 | ||||
Effect of exchange rate changes on cash and cash equivalents | 39,400 | (29,320 | ) | ||||
Net increase (decrease) in cash | 139,986 | (92,054 | ) | ||||
Cash and cash equivalents at beginning of year | 235,964 | 328,018 | |||||
Cash and cash equivalents at end of period | $ | 375,950 | $ | 235,964 | |||
IDEX CORPORATION
Company and Segment Financial Information - Reported
(dollars in thousands)
(unaudited)
For the Quarter Ended December 31, (d) | For the Year Ended December 31, (d) | |||||||||||||||
2017 | 2016 (a) | 2017 | 2016 (a) | |||||||||||||
Fluid & Metering Technologies | ||||||||||||||||
Net sales | $ | 222,052 | $ | 207,113 | $ | 880,957 | $ | 849,101 | ||||||||
Operating income (e) | 61,200 | 55,718 | 241,030 | 217,500 | ||||||||||||
Operating margin | 27.6 | % | 26.9 | % | 27.4 | % | 25.6 | % | ||||||||
EBITDA | $ | 66,664 | $ | 59,665 | $ | 263,610 | $ | 242,892 | ||||||||
EBITDA margin | 30.0 | % | 28.8 | % | 29.9 | % | 28.6 | % | ||||||||
Depreciation and amortization | $ | 5,764 | $ | 6,447 | $ | 23,587 | $ | 28,458 | ||||||||
Capital expenditures | 6,059 | 3,685 | 18,218 | 16,389 | ||||||||||||
Health & Science Technologies | ||||||||||||||||
Net sales | $ | 208,916 | $ | 188,334 | $ | 820,131 | $ | 744,809 | ||||||||
Operating income (e) | 44,962 | 34,706 | 179,567 | 153,691 | ||||||||||||
Operating margin | 21.5 | % | 18.4 | % | 21.9 | % | 20.6 | % | ||||||||
EBITDA | $ | 56,694 | $ | 47,403 | $ | 225,649 | $ | 200,980 | ||||||||
EBITDA margin | 27.1 | % | 25.2 | % | 27.5 | % | 27.0 | % | ||||||||
Depreciation and amortization | $ | 10,840 | $ | 12,254 | $ | 45,287 | $ | 45,298 | ||||||||
Capital expenditures | 4,851 | 4,210 | 16,340 | 15,665 | ||||||||||||
Fire & Safety/Diversified Products | ||||||||||||||||
Net sales | $ | 155,504 | $ | 135,013 | $ | 587,533 | $ | 520,009 | ||||||||
Operating income (e) | 41,006 | 31,039 | 147,028 | 123,605 | ||||||||||||
Operating margin | 26.4 | % | 23.0 | % | 25.0 | % | 23.8 | % | ||||||||
EBITDA | $ | 44,313 | $ | 34,033 | $ | 159,610 | $ | 135,400 | ||||||||
EBITDA margin | 28.5 | % | 25.2 | % | 27.2 | % | 26.0 | % | ||||||||
Depreciation and amortization | $ | 3,603 | $ | 3,640 | $ | 14,541 | $ | 11,956 | ||||||||
Capital expenditures | 2,185 | 1,640 | 6,363 | 5,945 | ||||||||||||
Corporate Office and Eliminations | ||||||||||||||||
Intersegment sales eliminations | $ | (568 | ) | $ | (41 | ) | $ | (1,309 | ) | $ | (876 | ) | ||||
Operating income (e) | (11,920 | ) | (35,942 | ) | (65,069 | ) | (82,399 | ) | ||||||||
EBITDA | (12,690 | ) | (33,777 | ) | (64,491 | ) | (78,252 | ) | ||||||||
Depreciation and amortization | 203 | 227 | 801 | 1,180 | ||||||||||||
Capital expenditures | 2,709 | 65 | 2,937 | 243 | ||||||||||||
Company | ||||||||||||||||
Net sales | $ | 585,904 | $ | 530,419 | $ | 2,287,312 | $ | 2,113,043 | ||||||||
Operating income | 135,248 | 85,521 | 502,556 | 412,397 | ||||||||||||
Operating margin | 23.1 | % | 16.1 | % | 22.0 | % | 19.5 | % | ||||||||
EBITDA | $ | 154,981 | $ | 107,324 | $ | 584,378 | $ | 501,020 | ||||||||
EBITDA margin | 26.5 | % | 20.2 | % | 25.5 | % | 23.7 | % | ||||||||
Depreciation and amortization (f) | $ | 20,410 | $ | 22,568 | $ | 84,216 | $ | 86,892 | ||||||||
Capital expenditures | 15,804 | 9,600 | 43,858 | 38,242 | ||||||||||||
IDEX CORPORATION
Company and Segment Financial Information - Adjusted
(dollars in thousands)
(unaudited)
For the Quarter Ended December 31, (d) | For the Year Ended December 31, (d) | |||||||||||||||
2017 | 2016 (a) | 2017 | 2016 (a) | |||||||||||||
Fluid & Metering Technologies | ||||||||||||||||
Net sales | $ | 222,052 | $ | 207,113 | $ | 880,957 | $ | 849,101 | ||||||||
Adjusted operating income (e) | 63,008 | 56,650 | 244,404 | 218,432 | ||||||||||||
Adjusted operating margin | 28.4 | % | 27.4 | % | 27.7 | % | 25.7 | % | ||||||||
Adjusted EBITDA | $ | 68,472 | $ | 62,629 | $ | 266,984 | $ | 245,856 | ||||||||
Adjusted EBITDA margin | 30.8 | % | 30.2 | % | 30.3 | % | 29.0 | % | ||||||||
Depreciation and amortization | $ | 5,764 | $ | 6,447 | $ | 23,587 | $ | 28,458 | ||||||||
Capital expenditures | 6,059 | 3,685 | 18,218 | 16,389 | ||||||||||||
Health & Science Technologies | ||||||||||||||||
Net sales | $ | 208,916 | $ | 188,334 | $ | 820,131 | $ | 744,809 | ||||||||
Adjusted operating income (e) | 46,630 | 35,823 | 184,263 | 154,808 | ||||||||||||
Adjusted operating margin | 22.3 | % | 19.0 | % | 22.5 | % | 20.8 | % | ||||||||
Adjusted EBITDA | $ | 58,362 | $ | 48,520 | $ | 230,345 | $ | 202,097 | ||||||||
Adjusted EBITDA margin | 27.9 | % | 25.8 | % | 28.1 | % | 27.1 | % | ||||||||
Depreciation and amortization | $ | 10,840 | $ | 12,254 | $ | 45,287 | $ | 45,298 | ||||||||
Capital expenditures | 4,851 | 4,210 | 16,340 | 15,665 | ||||||||||||
Fire & Safety/Diversified Products | ||||||||||||||||
Net sales | $ | 155,504 | $ | 135,013 | $ | 587,533 | $ | 520,009 | ||||||||
Adjusted operating income (e) | 41,188 | 32,464 | 147,283 | 125,030 | ||||||||||||
Adjusted operating margin | 26.5 | % | 24.0 | % | 25.1 | % | 24.0 | % | ||||||||
Adjusted EBITDA | $ | 44,495 | $ | 35,998 | $ | 159,865 | $ | 137,365 | ||||||||
Adjusted EBITDA margin | 28.6 | % | 26.7 | % | 27.2 | % | 26.4 | % | ||||||||
Depreciation and amortization | $ | 3,603 | $ | 3,640 | $ | 14,541 | $ | 11,956 | ||||||||
Capital expenditures | 2,185 | 1,640 | 6,363 | 5,945 | ||||||||||||
Corporate Office and Eliminations | ||||||||||||||||
Intersegment sales eliminations | $ | (568 | ) | $ | (41 | ) | $ | (1,309 | ) | $ | (876 | ) | ||||
Adjusted operating income (e) | (21,193 | ) | (15,511 | ) | (74,212 | ) | (59,901 | ) | ||||||||
Adjusted EBITDA | (21,963 | ) | (12,364 | ) | (73,634 | ) | (54,772 | ) | ||||||||
Depreciation and amortization | 203 | 227 | 801 | 1,180 | ||||||||||||
Capital expenditures | 2,709 | 65 | 2,937 | 243 | ||||||||||||
Company | ||||||||||||||||
Net sales | $ | 585,904 | $ | 530,419 | $ | 2,287,312 | $ | 2,113,043 | ||||||||
Adjusted operating income | 129,633 | 109,426 | 501,738 | 438,369 | ||||||||||||
Adjusted operating margin | 22.1 | % | 20.6 | % | 21.9 | % | 20.7 | % | ||||||||
Adjusted EBITDA | $ | 149,366 | $ | 134,783 | $ | 583,560 | $ | 530,546 | ||||||||
Adjusted EBITDA margin | 25.5 | % | 25.4 | % | 25.5 | % | 25.1 | % | ||||||||
Depreciation and amortization (f) | $ | 20,410 | $ | 22,568 | $ | 84,216 | $ | 86,892 | ||||||||
Capital expenditures | 15,804 | 9,600 | 43,858 | 38,242 | ||||||||||||
(a) | Certain amounts in the prior year presentation have been reclassified to conform to the current presentation due to the early adoption of ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. | |||||||||||||||
(b) | Calculated by applying the two-class method of allocating earnings to common stock and participating securities as required by ASC 260, Earnings Per Share. | |||||||||||||||
(c) | Other-net within operating activities includes $27.9 million of non-current income taxes payable related to the repatriation tax recorded in conjunction with Tax Reform, which the Company intends to pay beginning in 2019 and thereafter. | |||||||||||||||
(d) | Three and twelve month data includes the results of thinXXS (December 2017) and SFC Koenig (September 2016) in the Health & Science Technologies segment and Akron Brass (March 2016) and AWG Fittings (July 2016) in the Fire & Safety/Diversified Products segment from the date of acquisition. Three and twelve month data also includes the results of Faure Herman (October 2017), Hydra-Stop (July 2016) and IETG (October 2016) in the Fluid & Metering Technologies segment and CVI Japan (September 2016) and CVI Korea (December 2016) in the Health & Science Technologies segment through the date of disposition. | |||||||||||||||
(e) | Segment operating income excludes unallocated corporate operating expenses which are included in Corporate Office and Eliminations. | |||||||||||||||
(f) | Depreciation and amortization excludes amortization of debt issuance costs. | |||||||||||||||