IDEX Corporation (NYSE: IEX) today announced its financial results for the three- and twelve-month periods ended December 31, 2011. Fourth Quarter 2011 New orders in the quarter totaled $447 million, up 9 percent compared to the prior-year period. Sales in the quarter totaled $481 million, 19 percent higher than the prior-year period. For the quarter, on an organic basis, sales were 7 percent higher than the prior-year period. Fourth quarter 2011 operating income, adjusted for $9.4 million of restructuring related charges, was $85 million and resulted in adjusted operating margin of 17.8 percent, up 40 basis points from the prior year period. Excluding the impact from restructuring related charges, fourth quarter adjusted diluted earnings per share was 65 cents, an increase of 11 cents, or 20 percent, from the fourth quarter of the prior year. Adjusted free cash flow was $73.5 million for the quarter, a 40 percent increase from the fourth quarter of the prior year and 155 percent of net income. Full Year 2011 Highlights
- Orders increased 18 percent compared to the prior year (+7 percent organic, +9 percent acquisition and +2 percent for foreign currency translation).
- Sales increased 22 percent compared to the prior year (+9 percent organic, +11 percent acquisition and +2 percent for foreign currency translation).
- Reported net income of $194 million was $37 million, or 23 percent, higher than the prior year. Excluding restructuring related charges and a $15.8 million CVI Melles Griot non-cash acquisition fair value inventory charge, adjusted net income of $214 million was $49 million, or 30 percent, higher than the prior-year adjusted net income.
- Reported diluted EPS of $2.32 was 42 cents, or 22 percent, higher than the prior year. Adjusted EPS of $2.56 was 57 cents, or 29 percent, higher than the prior-year adjusted EPS.
- Adjusted EBITDA of $404 million was 22 percent of sales and covered interest expense by more than 13 times.
- Adjusted free cash flow of $226 million (adjusted for $39 million forward starting interest rate swap settlement in Q4) represented 117 percent of net income.
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|
- 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.
- 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.
- 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.
- Sales in the fourth quarter of $76 million reflected a 6 percent increase (all organic) compared to the fourth quarter of 2010.
- Operating margin of 28.1 percent represented a 150 basis point improvement compared to the fourth quarter of 2010 primarily due to volume and productivity.
- Fluid & Metering Technologies
- Health & Science Technologies
- Fire & Safety/Diversified Products
EBITDA and Free Cash FlowEBITDA means earnings before interest, income taxes, depreciation and amortization, while free cash flow means cash flow from operating activities less capital expenditures plus the excess tax benefit from stock-based compensation. Management uses these non-GAAP financial measures as internal operating metrics and for enterprise valuation purposes. Management believes these measures are useful as analytical indicators of leverage capacity and debt servicing ability, and uses them to measure financial performance as well as for planning purposes. However, they should not be considered as alternatives to net income, cash flow from operating activities or any other items calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definitions of EBITDA and free cash flow used here may differ from those used by other companies.
|EBITDA and Free Cash Flow bridge||For the Quarter Ended||For the Year Ended|
|December 31,||September 30,||December 31,|
|Income before Taxes||$||67.2||$||60.6||11||%||$||63.1||6||%||$||273.9||$||231.9||18||%|
|Depreciation and Amortization||19.3||13.2||46||20.5||(6||)||72.4||58.1||25|
|CVI Fair Value Inventory||-||-||-||12.8||(100||)||15.8||-||100|
|Cash Flow from Operating Activities||$||41.6||$||27.1||53||%||$||94.8||(56||)||%||$||217.2||$||184.5||18||%|
|Excess Tax Benefit from Stock-Based Compensation||.4||.2||100||.9||(58||)||5.3||3.5||53|
|Free Cash Flow||34.8||21.6||61||86.3||(60||)||187.3||156.3||20|
|Forward starting interest rate swaps||38.7||31.0||25||-||100||38.7||31.0||25|
|Adjusted Free Cash Flow||$||73.5||$||52.6||40||$||86.3||(15||)||$||226.0||$||187.3||21|
About IDEXIDEX 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 . (Tables follow)
|Condensed Statements of Consolidated Operations|
|(in thousands except per share amounts)|
|Three Months Ended||Twelve Months Ended|
|December 31,||December 31,|
|Cost of sales||287,081||243,230||1,099,778||894,590|
|Selling, general and administrative expenses||108,218||91,311||421,703||358,272|
|Other expense - net||442||484||1,443||1,092|
|Income before income taxes||67,164||60,565||273,881||231,874|
|Provision for income taxes||19,776||19,052||80,024||74,774|
|Earnings per Common Share:|
|Basic earnings per common share (a)||$||0.57||$||0.50||$||2.34||$||1.93|
|Diluted earnings per common share (a)||$||0.57||$||0.50||$||2.32||$||1.90|
|Basic weighted average common shares outstanding||82,596||80,899||82,145||80,466|
|Diluted weighted average common shares outstanding||83,573||82,686||83,543||81,983|
|Condensed Consolidated Balance Sheets|
|December 31,||December 31,|
|Cash and cash equivalents||$||230,259||$||235,136|
|Receivables - net||252,845||213,553|
|Other current assets||51,799||47,523|
|Total current assets||789,161||692,758|
|Property, plant and equipment - net||213,717||188,562|
|Goodwill and intangible assets||1,813,588||1,488,393|
|Other noncurrent assets||19,641||11,982|
|Liabilities and shareholders' equity|
|Trade accounts payable||$||110,977||$||104,055|
|Total current liabilities||258,278||353,668|
|Other noncurrent liabilities||258,328||243,917|
|Total liabilities and shareholders' equity||$||2,836,107||$||2,381,695|
|Company and Business Group Financial Information|
|(dollars in thousands)|
|Three Months Ended||Twelve Months Ended|
|December 31, (b)||December 31, (b)|
|2011||2010 (c)||2011||2010 (c)|
|Fluid & Metering Technologies|
|Operating income (d)||42,222||37,685||162,846||130,142|
|Depreciation and amortization||$||7,501||$||8,084||$||32,258||$||31,762|
|Health & Science Technologies|
|Operating income (d) (e)||32,743||24,789||128,801||92,246|
|Depreciation and amortization||$||9,395||$||3,983||$||30,165||$||17,384|
|Operating income (d)||881||949||19,154||20,131|
|Depreciation and amortization||$||662||$||773||$||3,181||$||3,753|
|Fire & Safety/Diversified Products|
|Operating income (d)||21,275||18,924||71,973||63,433|
|Depreciation and amortization||$||1,293||$||892||$||5,335||$||4,885|
|Operating income (d) (e)||85,384||70,677||332,770||260,211|
|Depreciation and amortization (f)||$||19,270||$||13,220||$||72,386||$||58,108|
|(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 twelve month data includes acquisitions of OBL (July 2010) in the Fluid & Metering Technologies segment and CVI Melles Griot (June 2011), Microfluidics (March 2011), Advanced Thin Films (January 2011), Fitzpatrick (November 2010) and Seals-PPE (April 2010) in the Health & Science Technologies segment from the date of acquisition.|
|(c)||Financial data has been revised to reflect the movement of the Pharma group from the Fluid & Metering Technologies segment to the Health & Science Technologies segment.|
|(d)||Group operating income excludes unallocated corporate operating expenses while both Group and Company operating income excludes restructuring related charges.|
|(e)||Operating income excludes $15.8 million for the twelve months ended December 31, 2011 related to the CVI Melles Griot non-cash acquisition fair value inventory charge.|
|(f)||Depreciation and amortization excludes amortization of debt issuance expenses.|
|Company and Business Group Historical Financial Data Reflecting New Reportable Segments|
|(dollars in thousands)|
|Three Months Ended (a)||Ended (a)|
|March 31,||June 30,||September 30,||December 31,||December 31,|
|Fluid & Metering Technologies (b)|
|Operating income (c)||41,852||41,486||41,462||42,879||167,679|
|Depreciation and amortization||$||7,998||$||8,240||$||8,603||$||7,527||$||32,368|
|Health & Science Technologies (b)|
|Operating income (c) (d)||29,499||29,867||32,515||32,086||123,967|
|Depreciation and amortization||$||4,984||$||5,990||$||9,712||$||9,369||$||30,055|
|Fire & Safety/ Diversified Products|
|Operating income (c)||21,142||26,865||20,965||22,156||91,128|
|Depreciation and amortization||$||2,342||$||2,375||$||1,844||$||1,955||$||8,516|
|Operating income (c) (d)||77,721||82,629||87,036||85,384||332,770|
|Depreciation and amortization (e)||$||15,622||$||16,954||$||20,540||$||19,270||$||72,386|
|(a)||Three and twelve month data includes acquisitions of 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.|
|(b)||Segment data has been revised to reflect the movement of our Trebor business unit from the Health & Science Technologies segment to the Fluid & Metering Technologies segment.|
|(c)||Group operating income excludes unallocated corporate operating expenses while both Group and Company operating income excludes restructuring related charges.|
|(d)||Operating income excludes $3.0 million and $12.8 million for the three months ended June 30, 2011 and September 30, 2011, respectively and $15.8 million for the twelve months ended December 31, 2011 related to the CVI Melles Griot non-cash acquisition fair value inventory charge.|
|(e)||Depreciation and amortization excludes amortization of debt issuance expenses.|