Page 1

IDEX IDEX Reports Second Quarter Results ; Raises Full Year Guidance July 27 , 2021 NORTHBROOK , III .-- ( BUSINESS WIRE ) -- Jul . 27 , 2021-- IDEX Corporation ( NYSE : IEX ) today announced its financial results for the three month period ended June 30 , 2021 . Second Quarter 2021 Highlights • Record orders of $ 751.0 million up 44 percent overall and 39 percent organically compared to Q2 2020 • Record sales of $ 685.9 million up 22 percent overall and 17 percent organically compared to Q2 2020 • Reported operating margin was 23.1 percent with adjusted operating margin of 24.4 percent • Reported EPS was $ 1.34 with adjusted EPS of $ 1.61 • Full year adjusted EPS guidance raised to $ 6.26 to $ 6.36 compared to prior guidance of $ 6.05 to $ 6.20 • Finalized the termination of the U.S. pension plan and refinanced the 4.2 % Senior Notes to 2.625 % • Completed the acquisition of Airtech Group , Inc. , US Valve Corporation and related entities ( Airtech ) Second Quarter 2021 Orders of $ 751.0 million were up 44 percent compared with the prior year period ( +39 percent organic , +1 percent acquisitions / divestitures and +4 percent foreign currency translation ) . Sales of $ 685.9 million were up 22 percent compared with the prior year period ( +17 percent organic , +1 percent acquisitions / divestitures and +4 percent foreign currency translation ) . Gross margin of 44.6 percent was up 280 basis points compared with the prior year period primarily as a result of higher volume and price capture , partially offset by inflation and supply chain constraints . Excluding the $ 1.8 million pre - tax fair value inventory step - up charge related to our first quarter acquisition of ABEL Pumps , L.P. and certain of its affiliates ( ABEL Pumps ) , adjusted gross margin of 44.9 percent was up 230 basis points compared with the adjusted prior year period . Operating income of $ 158.3 million resulted in an operating margin of 23.1 percent , which was up 340 basis points compared with the prior year period primarily as a result of higher volume and price capture , partially offset by inflation , supply chain constraints , a recovery in discretionary spending and a charge related to recording a contingent reserve for a Corporate transaction indemnity . Excluding the $ 1.8 million pre - tax fair value inventory step - up charge , $ 3.1 million of restructuring expenses and asset impairments and the $ 3.9 million charge related to recording a contingent reserve for a Corporate transaction indemnity , adjusted operating income was $ 167.1 million with an adjusted operating margin of 24.4 percent , up 330 basis points compared with the adjusted prior year period . Provision for income taxes of $ 27.7 million in the second quarter of 2021 resulted in an effective tax rate ( ETR ) of 21.3 percent , which was lower than the prior year period ETR of 22.7 percent primarily due to benefits from foreign sourced income in the second quarter of 2021 . Net income attributable to IDEX was $ 102.2 million , which resulted in EPS attributable to IDEX of $ 1.34 . Excluding the fair value inventory step - up charge , restructuring expenses and asset impairments , the charge related to recording a contingent reserve for a Corporate transaction indemnity , loss on early debt redemption and the noncash loss related to the termination of the U.S. pension plan , adjusted EPS attributable to IDEX was $ 1.61 , an increase of 51 cents , or 46.4 percent , from the prior year period . EBITDA of $ 165.5 million was 24.1 percent of sales and covered interest expense by almost 15 times . Adjusted EBITDA of $ 192.6 million was 28.1 percent of sales and covered interest expense by over 17 times . Cash from operations of $ 136.3 million was down 20 percent from the prior year period primarily due to volume driven increases in working capital and timing of tax payments , partially offset by higher earnings , and was 133 percent of net income attributable to IDEX . Cash from operations led to free cash flow of $ 120.3 million , which was down 25 percent from the prior year period and was 98 percent of adjusted net income attributable to IDEX . " Our recovery from the COVID - 19 pandemic continues as orders of $ 751 million and sales of $ 686 million reached record levels in the second quarter . Backlog is at a record level resulting from strong demand across all segments and geographies , with $ 65 million added in the second quarter . I want to thank all IDEX team members across the globe who are dealing with many obstacles associated with this recovery . Global supply chain constraints , component shortages and inflation are daily challenges , but the teams continue to deliver for our customers , and IDEX continues to perform extremely well . Our price capture continues to outpace material inflation and we drove strong flow through of 39 percent , resulting in an adjusted operating margin of 24.4 percent and a record adjusted EPS of $ 1.61 . We deployed a significant amount of capital in the first half of the year . We invested over $ 575 million in M & A , including the acquisition of Airtech in the second quarter . We also raised our quarterly dividend by 8 percent to $ 0.54 per share and increased capital spending in our businesses by 45 percent compared to the first half of 2020. Our balance sheet remains healthy as we have over $ 2.0 billion available to us for potential investments in additional strategic M & A and organic growth initiatives over the next 12 months .