IDEX Reports Record Second Quarter Orders, Sales and Free Cash Flow; Adjusted Earnings Per Share of 67 Cents
LAKE FOREST, Ill.--(BUSINESS WIRE)--Jul. 23, 2012--
New orders in the quarter totaled
Second quarter 2012 operating income, adjusted for
Excluding the impact of restructuring related charges, second quarter adjusted diluted earnings per share were
Free cash flow was
Second Quarter Highlights
- Orders increased 4 percent compared to the prior year (+1 percent organic, +6 percent acquisition and -3 percent foreign currency translation).
- Sales increased 9 percent compared to the prior year (+6 percent organic, +6 percent acquisition and -3 percent foreign currency translation).
- Reported net income of
$54 millionwas $4 million, or 8 percent, higher than the prior year. Excluding restructuring related charges, adjusted net income was $56 millionor 7 percent higher than prior year adjusted net income.
- Reported diluted EPS of
65 centswas 5 cents, or 8 percent, higher than the prior year EPS. Adjusted EPS of 67 centswas 5 cents, or 8 percent, higher than the prior year adjusted EPS.
- EBITDA of
$108 millionwas 22 percent of sales and covered interest expense by more than 10 times.
- Free cash flow was
$71 million, representing a second quarter record and 130 percent of net income. Year-to-date free cash flow continues to be strong - up 86 percent from the prior year.
- The Company completed the repurchase of 626 thousand shares of common stock for
$25.9 million. Year-to-date, the Company has returned $118 millionof capital through share repurchases, cash dividends and the repayment of debt.
"Solid execution delivered margin expansion and record free cash flow in the second quarter. Our second quarter adjusted EPS of
Despite these challenges, our focus on productivity across the organization delivered 18.5 percent operating margin and exceptional cash generation of
Based on current outlook, our projected third quarter 2012 EPS is in the range of
Chairman and Chief Executive Officer
Second Quarter 2012 Business Highlights (2012 operating margin excludes restructuring related charges)
Fluid & Metering Technologies
- Sales in the second quarter of
$211 millionreflected a 1 percent increase compared to the second quarter of 2011 (+3 percent organic and -2 percent foreign currency translation).
- Operating margin of 22.1 percent represented a 220 basis point improvement compared with the second quarter of 2011 due to productivity.
Health & Science Technologies
- Sales in the second quarter of
$171 millionreflected a 21 percent increase compared to the second quarter of 2011 (+3 percent organic, +19 percent acquisitions and -1 percent foreign currency translation).
- Operating margin of 16.6 percent represented a 470 basis point decrease compared with the second quarter 2011 adjusted operating margin primarily due to the dilutive impact from acquisitions. Excluding the impact from acquisitions, operating margins in 2012 were up 40 basis points compared with 2011.
Fire & Safety/Diversified Products
- Sales in the second quarter of
$116 millionreflected a 10 percent increase compared to the second quarter of 2011 (+15 percent organic and -5 percent foreign currency translation).
- Operating margin of 23.4 percent represented a 210 basis point decrease compared with the second quarter of 2011 primarily due to a
$2.8 milliongain on the sale of a facility in 2011. Excluding this gain from 2011, operating margins in 2012 were up 50 basis points compared with 2011.
For the second quarter of 2012, Fluid & Metering Technologies contributed 43 percent of sales and 46 percent of operating income; Health & Science Technologies accounted for 34 percent of sales and 28 percent of operating income; and Fire & Safety/Diversified Products represented 23 percent of sales and 26 percent of operating income.
IDEX Closes on
IDEX announced the acquisition of
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
Conference Call to be Broadcast over the Internet
IDEX will broadcast its second quarter earnings conference call over the Internet on
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.
For further information on
|Condensed Statements of Consolidated Operations|
|(in thousands except per share amounts)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Cost of sales||291,031||268,959||577,559||517,348|
|Selling, general and administrative expenses||111,882||105,210||225,264||206,189|
|Other expense (income) - net||230||(347||)||113||560|
|Income before income taxes||77,884||73,256||151,908||143,616|
|Provision for income taxes||23,533||23,074||45,386||45,483|
|Earnings per Common Share:|
|Basic earnings per common share (a)||$||0.65||$||0.61||$||1.28||$||1.19|
|Diluted earnings per common share (a)||$||0.65||$||0.60||$||1.27||$||1.17|
|Basic weighted average common shares outstanding||83,180||82,151||82,987||81,790|
|Diluted weighted average common shares outstanding||84,090||83,778||83,991||83,507|
|Condensed Consolidated Balance Sheets|
|June 30,||December 31,|
|Cash and cash equivalents||$||221,110||$||230,259|
|Receivables - net||265,209||252,845|
|Other current assets||57,273||51,799|
|Total current assets||798,089||789,161|
|Property, plant and equipment - net||215,673||213,717|
|Goodwill and intangible assets||1,822,444||1,813,588|
|Other noncurrent assets||20,596||19,641|
|Liabilities and shareholders' equity|
|Trade accounts payable||$||114,430||$||110,977|
|Total current liabilities||260,900||258,278|
|Other noncurrent liabilities||262,924||258,328|
|Total liabilities and shareholders' equity||$||2,856,802||$||2,836,107|
|Company and Business Group Financial Information|
|(dollars in thousands)|
|Three Months Ended||Six Months Ended|
|June 30, (b)||June 30, (b)|
|2012||2011 (c)||2012||2011 (c)|
|Fluid & Metering Technologies|
|Net sales||$ 210,715||$ 208,896||$ 423,433||$ 408,570|
|Operating income (d)||46,622||41,486||93,807||83,338|
|Depreciation and amortization||$ 7,408||$ 8,240||$ 14,948||$ 16,238|
|Health & Science Technologies|
|Net sales||$ 170,563||$ 140,474||$ 344,349||$ 269,708|
|Operating income (d) (e)||28,289||29,867||60,014||59,366|
|Depreciation and amortization||$ 9,559||$ 5,990||$ 19,020||$ 10,974|
|Fire & Safety/Diversified Products (c)|
|Net sales||$ 115,924||$ 105,192||$ 219,974||$ 204,079|
|Operating income (d)||27,126||26,865||51,358||48,007|
|Depreciation and amortization||$ 1,824||$ 2,375||$ 3,603||$ 4,717|
|Net sales||$ 494,144||$ 453,798||$ 983,561||$ 880,887|
|Operating income (d)||91,231||82,629||180,738||160,350|
|Depreciation and amortization (f)||$ 19,203||$ 16,954||$ 38,393||$ 32,576|
|(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 acquisitions of ERC (April 2012), CVI Melles Griot (June 2011), Microfluidics (March 2011) and Advanced Thin Films (January 2011) in the Health & Science Technologies segment from the date of acquisition.|
|(c)||Financial data for 2011 has been revised to reflect the transfer of our Trebor business unit from the Health & Science Technologies segment to the Fluid & Metering Technologies segment as well as the movement of the Dispensing Equipment segment into the Fire & Safety/Diversified Products segment.|
|(d)||Group operating income excludes unallocated corporate operating expenses while both Group and Company operating income excludes restructuring related charges.|
|(e)||Operating income within the Health & Science Technologies segment excludes a $3.0 million non-cash acquisition fair value inventory charge for the three and six months ended June 30, 2011.|
|(f)||Depreciation and amortization excludes amortization of debt issuance expenses.|
Vice President - Chief Financial Officer