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IDEX Corporation Reports Record 2011 Results; Adjusted Fourth Quarter Earnings Per Share Of 65 Cents

Stocks in this article: IEX

Fourth quarter year-over-year operating margin improved 160 basis points when normalized for restructuring charges and the impact of the 2011 acquisitions. Cash flow came in at an impressive 155 percent of net income. Our fourth quarter organic sales grew 7 percent, which was partially attributed to several large orders that shipped from our backlog.

Our team executed well to deliver a strong fourth quarter. However, the external market environment remains volatile as we continue to see a shift to shorter order cycle patterns, including historical blanket orders being replaced by near-term orders. In spite of this, our first quarter order book has filled up nicely and we are well positioned heading into 2012.

Looking forward, we see mid-single digit organic growth in 2012. We will continue to focus on emerging regions and our high growth markets. Also, we will continue our restructuring and operational excellence efforts to consolidate our manufacturing footprint and drive productivity.

Based on our outlook for the year 2012, we forecast fully diluted EPS of $2.74 to $2.82, up 7 to 10 percent over 2011; this includes a 10 cent per share impact due to higher interest expense from the fourth quarter 2011 debt issuance. Our projected first quarter EPS is in the range of 62 to 64 cents, up 9 to 12 percent on a fully diluted basis.”

Andrew K. Silvernail
Chairman and Chief Executive Officer

Fourth Quarter 2011 Business Highlights (excluding restructuring related charges)

Fluid & Metering Technologies

  • Sales in the fourth quarter of $214 million reflected an 8 percent increase (all organic) compared to the fourth quarter of 2010.
  • Operating margin of 19.7 percent represented an 80 basis point improvement compared to the fourth quarter of 2010 primarily due to higher volume.

Health & Science Technologies

  • Sales in the fourth quarter of $168 million reflected a 51 percent increase compared to the fourth quarter of 2010 (+7 percent organic and +44 percent acquisitions).
  • Operating margin of 19.5 percent represented a 280 basis point decrease compared to the fourth quarter of 2010 primarily due to the current year acquisitions impact.

Dispensing Equipment

  • Sales in the fourth quarter of $24 million reflected a 1 percent decrease (all foreign currency translation) compared to the fourth quarter of 2010.
  • Operating margin of 3.7 percent represented a 20 basis point decrease compared to the fourth quarter of 2010 primarily due to product mix.

Fire & Safety/Diversified Products

  • Sales in the fourth quarter of $76 million reflected a 6 percent increase (all organic) compared to the fourth quarter of 2010.
  • Operating margin of 28.1 percent represented a 150 basis point improvement compared to the fourth quarter of 2010 primarily due to volume and productivity.

For the fourth quarter of 2011 , Fluid & Metering Technologies contributed 44 percent of sales and 43 percent of operating income; Health & Science Technologies accounted for 35 percent of sales and 34 percent of operating income; Dispensing Equipment accounted for 5 percent of sales and 1 percent of operating income; and Fire & Safety/Diversified Products represented 16 percent of sales and 22 percent of operating income.

Reportable Segments

IDEX also is announcing the realignment of our reportable segments, including the elimination of the Dispensing Equipment segment. In 2012, the Company will include the Dispensing Equipment segment as part of the Fire & Safety/Diversified Products segment. This change more accurately reflects how we run our businesses and will align our diversified products into one segment. Effective with the reporting of our financial results for the three months ending March 31, 2012, IDEX’s reportable segments will be disclosed as:

  • Fluid & Metering Technologies
  • Health & Science Technologies
  • Fire & Safety/Diversified Products

For informational purposes, the attached table presents the company’s pro-forma quarterly and fiscal year 2011 historical financial data reflecting the new reportable segments.

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