IDEX Corporation Reports Second Quarter 2010 Results; Adjusted Earnings Per Share of 50 Cents
NORTHBROOK, Ill., Jul 19, 2010 (BUSINESS WIRE) --
IDEX Corporation (NYSE: IEX) today announced second quarter 2010 results.
New orders in the quarter totaled $377 million, up 18 percent compared to the prior-year period. Sales in the quarter totaled $379 million, 13 percent higher than the prior-year period.
Second quarter 2010 operating income, adjusted for $1 million of restructuring related charges, was $64 million and resulted in adjusted operating margin of 16.9 percent, up 200 basis points from the prior year (excluding prior year restructuring related charges) due to volume and improved productivity. Adjusted and reported second quarter operating income includes approximately $2 million of acquisition related costs, primarily related to the previously announced Seals Ltd. acquisition.
Excluding the impact from restructuring related charges, second quarter diluted earnings per share was 50 cents, an increase of 13 cents, or 35 percent, from the second quarter of the previous year (excluding prior year restructuring related charges).
Second Quarter 2010 Highlights
"Our second quarter sales results were outstanding. The Health and Science and Fluid and Metering Technology segments outperformed our expectations and, more importantly, continue to outperform the growth rates in the markets we serve. Our Fire and Safety and Dispensing segments continue to perform as planned. These top line results drove strong profitability and this is reflected in a second quarter operating margin of nearly 17 percent, which is 200 basis points higher than the prior year.
Based on current outlook, our projected third quarter 2010 EPS is in the range of 46 to 48 cents on a fully diluted basis. Third quarter estimates exclude approximately $3 million of restructuring related costs associated with the closure of a Health and Science Technologies site in Denmark. Our outlook for the full year 2010 has improved from previous estimates; we expect organic revenue growth in the high single digit range which will result in diluted EPS of $1.85 to $1.90, excluding restructuring related charges."
Lawrence D. Kingsley
Chairman and Chief Executive Officer
Second Quarter 2010 Business Highlights (excluding restructuring related charges)
Fluid & Metering Technologies
Health & Science Technologies
Fire & Safety/Diversified Products
For the second quarter of 2010, Fluid & Metering Technologies contributed 46 percent of sales and 41 percent of operating income; Health & Science Technologies accounted for 26 percent of sales and 27 percent of operating income; Dispensing Equipment accounted for 11 percent of sales and 13 percent of operating income; and Fire & Safety/Diversified Products represented 17 percent of sales and 19 percent of operating income.
Conference Call to be Broadcast over the Internet
IDEX will broadcast its second quarter earnings conference call over the Internet on Tuesday, July 20, 2010 at 9:30 a.m. CT. Chairman and Chief Executive Officer Larry Kingsley and Vice President and Chief Financial Officer Dominic Romeo 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 800.642.1687 (or 706.645.9291 for international participants) using the ID # 81612030.
A Note on EBITDA and Free Cash Flow
EBITDA means earnings before interest, income taxes, depreciation and amortization, while free cash flow means cash flow from operating activities less capital expenditures plus the excess tax benefit from stock-based compensation. Management uses these non-GAAP financial measures as internal operating metrics and for enterprise valuation purposes. Management believes these measures are useful as analytical indicators of leverage capacity and debt servicing ability, and uses them to measure financial performance as well as for planning purposes. However, they should not be considered as alternatives to net income, cash flow from operating activities or any other items calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definitions of EBITDA and free cash flow used here may differ from those used by other companies.
|EBITDA and Free Cash Flow bridge||For the Quarter Ended|
Income before Taxes
Depreciation and Amortization
Cash Flow from Operating Activities
Excess Tax Benefit from Stock-Based Compensation
Free Cash Flow
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These statements may relate to, among other things, capital expenditures, cost reductions, cash flow, and operating improvements and are indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "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. 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. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.
IDEX Corporation is an applied solutions company specializing in fluid and metering technologies, health and science technologies, dispensing equipment, and fire, safety and other diversified products built to its customers' exacting specifications. Its products are sold in niche markets to a wide range of industries throughout the world. IDEX shares are traded on the New York Stock Exchange and Chicago Stock Exchange under the symbol "IEX".
For further information on IDEX Corporation and its business units, visit the company's Web site at www.idexcorp.com.
|Condensed Statements of Consolidated Operations|
|(in thousands except per share amounts)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Cost of sales||223,705||205,354||431,762||408,773|
|Selling, general and administrative expenses||91,010||81,116||178,791||162,898|
|Other income (expense) - net||239||(385||)||493||(576||)|
|Income before income taxes||59,420||41,910||114,133||76,059|
|Provision for income taxes||19,022||13,988||37,110||25,532|
|Earnings per Common Share:|
|Basic earnings per common share (a)||$||0.50||$||0.35||$||0.95||$||0.63|
|Diluted earnings per common share (a)||$||0.49||$||0.34||$||0.94||$||0.62|
|Basic weighted average common shares outstanding||80,369||79,675||80,225||79,594|
|Diluted weighted average common shares outstanding||81,800||80,507||81,655||80,363|
|Condensed Consolidated Balance Sheets|
|June 30,||December 31,|
|Cash and cash equivalents||$||159,138||$||73,526|
|Receivables - net||200,430||183,178|
|Other current assets||47,773||35,545|
|Total current assets||577,450||451,712|
|Property, plant and equipment - net||179,284||178,283|
|Goodwill and intangible assets||1,447,072||1,461,799|
|Other noncurrent assets||7,721||6,363|
|Liabilities and shareholders' equity|
|Trade accounts payable||$||83,204||$||73,020|
|Total current liabilities||237,535||189,682|
|Other noncurrent liabilities||242,025||248,617|
|Total liabilities and shareholders' equity||$||2,211,527||$||2,098,157|
|Company and Business Group Financial Information|
|(dollars in thousands)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|2010 (b)||2009||2010 (b)||2009|
|Fluid & Metering Technologies|
|Operating income (c)||30,779||24,221||63,289||47,939|
|Depreciation and amortization||$||8,203||$||8,566||$||16,225||$||16,335|
|Health & Science Technologies|
|Operating income (c)||20,773||11,603||39,888||22,301|
|Depreciation and amortization||$||4,364||$||3,200||$||7,879||$||6,713|
|Operating income (c)||9,716||10,021||16,470||14,070|
|Depreciation and amortization||$||1,131||$||886||$||2,164||$||1,670|
|Fire & Safety/Diversified Products|
|Operating income (c)||14,041||13,736||27,464||27,330|
|Depreciation and amortization||$||1,346||$||1,248||$||2,798||$||2,528|
|Operating income (d)||63,811||49,985||123,571||91,397|
|Depreciation and amortization (e)||$||15,369||$||14,164||$||29,653||$||27,758|
|(a)||Calculated by applying the two-class method of allocating earnings to common stock and participating securities as required by ASC 260, Earnings Per Share.|
|(b)||Three and six month data includes acquisition of Seals (April 2010) in the Health & Science Technologies Group from the date of acquisition.|
|(c)||Group operating income excludes unallocated corporate operating expenses and restructuring-related charges.|
|(d)||Company operating income excludes restructuring-related charges.|
|(e)||Excludes amortization of debt issuance expenses.|
SOURCE: IDEX Corporation
Vice President - Corporate Finance