Fourth Quarter
Highlights
(All comparisons against the fourth quarter of 2022 unless
otherwise noted)
- Sales of $789 million, down 3% overall and 6% organically
- Reported diluted EPS of $1.43, down 16%; adjusted diluted EPS
of $1.83, down 9%
- Strong operating cash flow of $201 million, up 20%; free cash
flow of $179 million, up 22%
- Completed acquisition of STC Material Solutions on December 14,
2023 for $202 million
Full Year Highlights
(All comparisons against full year 2022 unless otherwise
noted)
- Record reported sales of $3.3 billion, up 3% overall and down
1% organically
- Record reported diluted EPS of $7.85, up 2%; record adjusted
diluted EPS of $8.22, up 1%
- Record operating cash flow of $717 million, up 29%; record free
cash flow of $627 million, up 28%
- Invested approximately $425 million for acquisitions, capital
projects and share repurchases
IDEX Corporation (NYSE: IEX) today announced its financial
results for the quarter and year ended December 31, 2023.
“IDEX businesses weathered an unprecedented year of global
recalibration, which played out differently across our segments.
Our team’s agility and core execution capabilities, combined with
the quality of our underlying assets, enabled us to deliver strong
results in a challenging environment,” said Eric D. Ashleman, IDEX
Corporation Chief Executive Officer and President.
“Now, the majority of our end markets are stable, supporting the
early stages of focused organic growth to drive our next chapter of
outperformance. However, the timing of market recovery within our
Life Sciences and Analytical Instrumentation businesses remains
uncertain, moderating our overall full year growth outlook.”
“We continue to aggressively pursue inorganic opportunities
within advantaged, fast-growing markets, as demonstrated by our
purchase of STC Material Solutions in December. Our funnel of
potential acquisitions is strong and our efforts are well supported
by ample capacity on our balance sheet.”
2024 Outlook
Full year 2024 organic sales growth is projected to be 0% to 2%
over the prior year, with GAAP diluted EPS of $7.15 to $7.45
(adjusted diluted EPS of $8.15 to $8.45).
First quarter 2024 organic sales are projected to decline 6% to
7% from the prior year period, with GAAP diluted EPS of $1.45 to
$1.50 (adjusted diluted EPS of $1.70 to $1.75).
Consolidated Results
For the Quarter Ended December
31,
For the Year Ended December
31,
(Dollars in millions, except per share
amounts)
2023
2022
Increase
(Decrease)
2023
2022
Increase
(Decrease)
Net sales
$
788.9
$
810.7
$
(21.8
)
$
3,273.9
$
3,181.9
$
92.0
Adjusted net sales*
788.9
810.7
(21.8
)
3,273.9
3,164.0
109.9
Organic net sales growth*
(6
%)
(1
%)
Gross profit
$
336.8
$
345.7
$
(8.9
)
$
1,446.9
$
1,426.9
$
20.0
Adjusted gross profit*
337.2
353.8
(16.6
)
1,448.5
1,417.5
31.0
Net income attributable to IDEX
108.6
130.0
(21.4
)
596.1
586.9
9.2
Adjusted net income attributable to
IDEX*
139.0
152.8
(13.8
)
623.6
618.1
5.5
Adjusted EBITDA*
203.6
218.9
(15.3
)
899.6
884.2
15.4
Diluted EPS attributable to
IDEX
1.43
1.71
(0.28
)
7.85
7.71
0.14
Adjusted diluted EPS attributable to
IDEX*
1.83
2.01
(0.18
)
8.22
8.12
0.10
Cash flows from operating
activities
201.0
167.3
33.7
716.7
557.4
159.3
Free cash flow*
179.4
147.3
32.1
626.8
489.4
137.4
Gross margin
42.7
%
42.6
%
10 bps
44.2
%
44.8
%
(60) bps
Adjusted gross margin*
42.7
%
43.6
%
(90) bps
44.2
%
44.8
%
(60) bps
Net income margin
13.7
%
16.0
%
(230) bps
18.2
%
18.4
%
(20) bps
Adjusted EBITDA margin*
25.8
%
27.0
%
(120) bps
27.5
%
27.9
%
(40) bps
*These are non-GAAP measures. See the
definitions of these non-GAAP measures in the section in this
release titled “Non-GAAP Measures of Financial Performance” and
reconciliations to their most directly comparable GAAP financial
measures in the reconciliation tables at the end of this
release.
Orders
Fourth quarter 2023 orders of $753.9 million reflected a 6%
decrease compared with the prior year period (-10% organic, +3%
acquisitions/divestitures and +1% foreign currency
translation).
Full year 2023 orders of $3,057.6 million reflected a 7%
decrease compared with 2022 (-11% organic, -1% impact from the exit
of a COVID-19 testing application in 2022 that did not reoccur in
2023 and +5% acquisitions/divestitures).
Net Sales
Fourth quarter 2023 sales of $788.9 million reflected a 3%
decrease compared with the prior year period (-6% organic and +3%
acquisitions/divestitures).
Full year 2023 sales of $3,273.9 million reflected a 3% increase
compared with 2022 (+5% acquisitions/divestitures, -1% organic and
-1% impact from the exit of a COVID-19 testing application).
Gross Margin
Fourth quarter 2023 gross margin of 42.7% increased 10 basis
points compared with the prior year period primarily due to strong
price/cost, lower fair value inventory step-up charges and
favorable operational productivity, partially offset by lower
volume leverage, higher employee-related costs partly mitigated by
lower variable compensation, the dilutive impact of acquisitions
and unfavorable mix. Adjusted gross margin, which excludes fair
value inventory step-up charges, decreased 90 basis points compared
with the prior year period.
Full year 2023 gross margin of 44.2% decreased 60 basis points
compared with 2022 primarily due to lower volume leverage, the
dilutive impact of acquisitions, higher employee-related costs
partly mitigated by lower variable compensation, unfavorable mix
and the acceleration of previously deferred revenue related to the
exit of a COVID-19 testing application in 2022 that did not reoccur
in 2023, partially offset by strong operational productivity and
price/cost as well as lower fair value inventory step-up charges.
Adjusted gross margin, which excludes the acceleration of
previously deferred revenue discussed above and fair value
inventory step-up charges, decreased 60 basis points compared with
2022.
Net Income and Diluted Earnings per Share
Attributable to IDEX and Net Income Margin
Fourth quarter 2023 net income attributable to IDEX decreased
$21.4 million to $108.6 million, which resulted in diluted EPS
attributable to IDEX of $1.43 per share, a decrease of $0.28 per
share, or 16%, from the prior year period. Fourth quarter 2023 net
income margin of 13.7% decreased 230 basis points compared with the
prior year period. These decreases were primarily driven by lower
operating results discussed above as well as a loss on the sale of
Novotema, SpA ("Novotema") and amortization on new acquisitions,
partially offset by higher fair value inventory step-up charges in
the prior year period. The fourth quarter 2023 effective tax rate
of 22.7% increased compared with the fourth quarter 2022 effective
tax rate of 20.5% primarily due to the one-time foreign currency
benefits realized in 2022 in connection with the funding of the
acquisition of Muon B.V. and its subsidiaries ("Muon Group") as
well as the impact of the loss recorded on the sale of Novotema
during 2023, for which no related tax benefit was realized due to
the type of consolidated group in which it participated.
Full year 2023 net income attributable to IDEX increased $9.2
million to $596.1 million, which resulted in diluted EPS
attributable to IDEX of $7.85 per share, an increase of $0.14 per
share, or 2%, compared with 2022. Full year 2023 net income margin
of 18.2% decreased 20 basis points compared with 2022. The increase
in net income attributable to IDEX was primarily driven by higher
gains on the sale of businesses and lower fair value inventory
step-up charges, partially offset by lower operating results
discussed above, amortization on new acquisitions, higher interest
expense and a reserve recorded on an investment with a
collaborative partner. The full year 2023 GAAP effective tax rate
of 21.7% was flat when compared with the full year 2022 GAAP
effective tax rate. Both years included one-time benefits that
lowered the effective tax rate.
Adjusted EBITDA Margin and Adjusted
Diluted EPS Attributable to IDEX
Fourth quarter 2023 Adjusted EBITDA margin of 25.8% decreased
120 basis points compared with the prior year period driven by
lower volume leverage, higher employee-related costs partly
mitigated by lower variable compensation, unfavorable mix and the
dilutive impact of acquisitions, partially offset by strong
price/cost and operational productivity. Adjusted diluted EPS
attributable to IDEX was $1.83 per share, a decrease of $0.18 per
share, or 9%, from the prior year period reflecting the operating
results previously discussed. Adjusted diluted EPS excludes the
impacts of the sale of Novotema discussed above.
Full year 2023 Adjusted EBITDA margin of 27.5% decreased 40
basis points compared with 2022 driven by lower volume leverage,
higher employee-related costs and unfavorable mix, partially offset
by strong price/cost and operational productivity. Adjusted diluted
EPS attributable to IDEX was $8.22 per share, an increase of $0.10
per share, or 1%, compared with 2022 reflecting higher operating
results. Additionally, 2023 included higher interest expense, which
was mostly offset by the 9 cent impact of a lower adjusted
effective tax rate in 2023, which excludes the impacts of the sale
of businesses.
Cash Flow
Fourth quarter and full year 2023 cash from operations of $201.0
million and $716.7 million, respectively, were up compared with the
prior year period primarily due to lower working capital driven by
inventory reductions in 2023 as compared to 2022. Fourth quarter
2023 free cash flow was $179.4 million, up 22% compared with the
prior year period and constituted 129% of adjusted net income
attributable to IDEX, while full year 2023 free cash flow of $626.8
million, up 28% compared with 2022, constituted 101% of adjusted
net income attributable to IDEX.
Segment Highlights
Fluid & Metering Technologies ("FMT")
For the Quarter Ended December
31,
(Dollars in millions)
2023
2022
Increase
(Decrease)
Net sales
$
299.1
$
287.8
$
11.3
Adjusted EBITDA
92.2
86.4
5.8
Adjusted EBITDA margin
30.8
%
30.0
%
80 bps
- Fourth quarter 2023 sales of $299.1 million reflected a 4%
increase compared with the prior year period (+3% organic and +1%
foreign currency translation).
- Fourth quarter 2023 Adjusted EBITDA margin was 30.8%, up 80
basis points compared with the prior year period primarily due to
strong operational productivity and price/cost, partially offset by
unfavorable mix, higher employee-related costs and lower volume
leverage.
Health & Science Technologies ("HST")
For the Quarter Ended December
31,
(Dollars in millions)
2023
2022
Increase
(Decrease)
Net sales
$
312.7
$
353.0
$
(40.3
)
Adjusted EBITDA
80.7
107.0
(26.3
)
Adjusted EBITDA margin
25.8
%
30.3
%
(450) bps
- Fourth quarter 2023 sales of $312.7 million reflected an 11%
decrease compared with the prior year period (-19% organic, +7%
acquisitions/divestitures and +1% foreign currency
translation).
- Fourth quarter 2023 Adjusted EBITDA margin was 25.8%, down 450
basis points compared with the prior year period primarily due to
lower volume leverage, the dilutive impact of acquisitions and
higher employee-related costs, partially offset by strong
operational productivity and price/cost.
Fire & Safety/Diversified Products
("FSDP")
For the Quarter Ended December
31,
(Dollars in millions)
2023
2022
Increase
(Decrease)
Net sales
$
179.0
$
170.9
$
8.1
Adjusted EBITDA
51.6
46.6
5.0
Adjusted EBITDA margin
28.9
%
27.3
%
160 bps
- Fourth quarter 2023 sales of $179.0 million reflected a 5%
increase compared with the prior year period (+3% organic and +2%
foreign currency translation).
- Fourth quarter 2023 Adjusted EBITDA margin was 28.9%, up 160
basis points compared with the prior year period primarily due to
strong price/cost and operational productivity, partially offset by
lower volume leverage and higher employee-related costs.
Corporate Costs
Corporate costs included in consolidated Adjusted EBITDA were
$20.9 million in the fourth quarter of 2023, a decrease of $0.2
million compared with the same prior year period. The change was
primarily driven by lower employee-related costs, partially offset
by higher legal related expenditures.
Acquisition
On December 14, 2023, the Company completed the acquisition of
STC Material Solutions (“STC”). STC specializes in the design and
manufacturing of technical ceramics and hermetic sealing products
for the most extreme, mission critical applications in the
semiconductor, aerospace and defense, industrial technology,
medical technology and energy sectors. Headquartered in St. Albans,
Vermont with operations in Santa Ana, California, STC operates in
the Company's Scientific Fluidics & Optics reporting unit
within the HST segment. STC was acquired for cash consideration of
$202.0 million, net of cash acquired. The entire purchase price was
funded with cash on hand.
Divestitures
On December 29, 2023, the Company completed the sale of Novotema
for proceeds of $8.3 million, net of cash remitted, resulting in a
loss on the sale of $9.1 million. The results of Novotema were
reported within the HST segment.
Conference Call to be Broadcast over
the Internet
IDEX will broadcast its fourth quarter earnings conference call
over the Internet on Wednesday, February 7, 2024 at 9:30 a.m. CT.
Chief Executive Officer and President Eric Ashleman and Senior Vice
President and Chief Financial Officer Abhi Khandelwal 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 877.660.6853 (or 201.612.7415 for
international participants) using the ID #13742102.
Forward-Looking
Statements
This news release contains “forward-looking” statements within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended. These statements may relate to, among other
things, the Company’s first quarter 2024 and full year 2024 outlook
including expected organic sales projections, expected earnings per
share and adjusted earnings per share, and the assumptions
underlying these expectations, anticipated future acquisition
behavior, anticipated trends in end markets, and the anticipated
benefits of the Company’s recent acquisitions, and are indicated by
words or phrases such as “anticipates,” “estimates,” “plans,”
“guidance,” “expects,” “projects,” “forecasts,” “should,” “could,”
“will,” “believes,” “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: levels of industrial activity and economic conditions in
the U.S. and other countries around the world, including
uncertainties in the financial markets and adverse developments
affecting the financial services industry; pricing pressures,
including inflation and rising interest rates, and other
competitive factors and levels of capital spending in certain
industries, all of which could have a material impact on order
rates and the Company’s results; the impact of health epidemics and
pandemics and terrorist attacks and wars, which could have an
adverse impact on the Company's business by creating disruptions in
the global supply chain and by potentially having an adverse impact
on the global economy; the Company’s 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; developments with respect to trade policy and tariffs;
capacity utilization and the effect this has on costs; labor
markets; supply chain conditions; market conditions and material
costs; risks related to environmental, social and corporate
governance issues, including those related to climate change and
sustainability; and developments with respect to contingencies,
such as litigation and environmental matters.
Additional factors that could cause actual results to differ
materially from those reflected in the forward-looking statements
include, but are not limited to, the risks discussed in the “Risk
Factors” section included in the Company’s most recent annual
report on Form 10-K and the Company’s subsequent quarterly reports
filed with the Securities and Exchange Commission (“SEC”) and the
other risks discussed in the Company’s filings with the SEC. 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, except as may be required by law. Investors are
cautioned not to rely unduly on forward-looking statements when
evaluating the information presented here.
About IDEX
IDEX (NYSE: IEX) makes thousands of products and
mission-critical components that improve everyday life all around
you. If you enjoy chocolate, it quite possibly passed through a
Viking® internal gear pump at the candy factory. If you were ever
in a car accident, emergency workers may have used the Hurst Jaws
of Life® rescue tool to save your life. If your doctor ordered a
DNA test to predict your risk of disease or determine a course of
treatment, the lab may have used equipment containing components
made by IDEX Health & Science. Founded in 1988 with three
small, entrepreneurial manufacturing companies, we’re proud to say
that we now call over 50 diverse businesses around the world part
of the IDEX family. With more than 8,500 employees and
manufacturing operations in more than 20 countries, IDEX is a
high-performing, global company with over $3.2 billion in annual
sales, committed to making trusted solutions that improve lives.
IDEX shares are traded on the New York Stock Exchange under the
symbol “IEX”.
For further information on IDEX Corporation and its business
units, visit the company’s website at www.idexcorp.com.
(Financial reports follow)
IDEX CORPORATION
Condensed Consolidated Statements
of Income
(in millions, except per share
amounts)
(unaudited)
For the Quarter Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Net sales
$
788.9
$
810.7
$
3,273.9
$
3,181.9
Cost of sales
452.1
465.0
1,827.0
1,755.0
Gross profit
336.8
345.7
1,446.9
1,426.9
Selling, general and administrative
expenses
173.6
169.0
703.5
652.7
Restructuring expenses and asset
impairments
2.7
1.7
10.9
22.8
Operating income
160.5
175.0
732.5
751.4
Loss (gain) on sale of
businesses
9.1
—
(84.7
)
(34.8
)
Other (income) expense - net
(0.4
)
(0.6
)
5.2
(3.9
)
Interest expense
11.6
12.1
51.7
40.7
Income before income taxes
140.2
163.5
760.3
749.4
Provision for income taxes
31.9
33.5
164.7
162.7
Net income
$
108.3
$
130.0
$
595.6
$
586.7
Net loss attributable to noncontrolling
interest
0.3
—
0.5
0.2
Net income attributable to IDEX
$
108.6
$
130.0
$
596.1
$
586.9
Earnings per Common Share:
Basic earnings per common share
attributable to IDEX
$
1.43
$
1.72
$
7.87
$
7.74
Diluted earnings per common share
attributable to IDEX
$
1.43
$
1.71
$
7.85
$
7.71
Share Data:
Basic weighted average common shares
outstanding
75.6
75.5
75.6
75.7
Diluted weighted average common shares
outstanding
75.8
75.9
75.9
76.0
IDEX CORPORATION
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
December 31, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
534.3
$
430.2
Receivables - net
427.8
442.8
Inventories - net
420.8
470.9
Other current assets
63.4
55.4
Total current assets
1,446.3
1,399.3
Property, plant and equipment -
net
430.3
382.1
Goodwill and intangible assets -
net
3,850.1
3,585.9
Other noncurrent assets
138.5
144.6
Total assets
$
5,865.2
$
5,511.9
Liabilities and equity
Current liabilities
Trade accounts payable
$
179.7
$
208.9
Accrued expenses
271.5
289.1
Current portion of long-term
borrowings
0.6
—
Dividends payable
48.5
45.6
Total current liabilities
500.3
543.6
Long-term borrowings - net
1,325.1
1,468.7
Other noncurrent liabilities
498.6
460.0
Total liabilities
2,324.0
2,472.3
Shareholders' equity
3,541.4
3,039.3
Noncontrolling interest
(0.2
)
0.3
Total equity
3,541.2
3,039.6
Total liabilities and equity
$
5,865.2
$
5,511.9
IDEX CORPORATION
Condensed Consolidated Statements
of Cash Flows
(in millions)
(unaudited)
For the Year Ended
December 31,
2023
2022
Cash flows from operating
activities
Net income
$
595.6
$
586.7
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain on sale of businesses -
net
(84.7
)
(34.8
)
Asset impairments
0.8
17.4
Credit loss on note receivable from
collaborative partner
7.7
—
Depreciation
57.2
50.7
Amortization of intangible
assets
94.9
69.0
Share-based compensation
expense
21.8
21.6
Deferred income taxes
(14.7
)
(18.5
)
Changes in (net of the effect from
acquisitions/divestitures and foreign currency
translation):
Receivables - net
20.5
(71.7
)
Inventories - net
66.2
(72.4
)
Other current assets
(6.5
)
(0.5
)
Trade accounts payable
(25.3
)
17.6
Deferred revenue
12.7
(25.0
)
Accrued expenses
(34.8
)
16.6
Other - net
5.3
0.7
Net cash flows provided by operating
activities
716.7
557.4
Cash flows from investing
activities
Capital expenditures
(89.9
)
(68.0
)
Acquisition of businesses, net of cash
acquired
(311.8
)
(945.6
)
Proceeds from sale of businesses, net
of cash remitted
118.6
49.4
Purchase of marketable
securities
(29.0
)
—
Proceeds from sale of marketable
securities
24.8
39.7
Other - net
3.5
7.3
Net cash flows used in investing
activities
(283.8
)
(917.2
)
Cash flows from financing
activities
Borrowings under revolving credit
facilities
—
210.4
Payments under revolving credit
facilities
—
(135.0
)
Proceeds from issuance of long-term
borrowings
100.0
200.0
Payment of long-term borrowings
(250.0
)
—
Dividends paid
(190.7
)
(177.4
)
Proceeds from share issuances, net of
shares withheld for taxes
21.5
14.1
Repurchases of common stock
(24.2
)
(148.1
)
Other - net
(1.3
)
(1.8
)
Net cash flows used in financing
activities
(344.7
)
(37.8
)
Effect of exchange rate changes on cash
and cash equivalents
15.9
(27.6
)
Net increase (decrease) in cash
104.1
(425.2
)
Cash and cash equivalents at beginning
of year
430.2
855.4
Cash and cash equivalents at end of
year
$
534.3
$
430.2
IDEX CORPORATION
Company and Segment Financial
Information
(dollars in millions)
(unaudited)
For the Quarter Ended
December 31, (a)
For the Year Ended
December 31, (a)
2023
2022
2023
2022
Fluid & Metering
Technologies
Net sales
$
299.1
$
287.8
$
1,247.1
$
1,167.3
Adjusted EBITDA(b)
92.2
86.4
416.1
374.2
Adjusted EBITDA margin
30.8
%
30.0
%
33.4
%
32.1
%
Depreciation
$
3.8
$
4.1
$
14.1
$
16.1
Amortization of intangible
assets
5.4
5.7
22.7
20.8
Capital expenditures
4.8
7.9
24.2
25.3
Health & Science
Technologies
Net sales
$
312.7
$
353.0
$
1,316.4
$
1,339.2
Adjusted net sales(c)
312.7
353.0
1,316.4
1,321.3
Adjusted EBITDA(b)
80.7
107.0
359.5
411.8
Adjusted EBITDA margin
25.8
%
30.3
%
27.3
%
31.2
%
Depreciation
$
9.1
$
7.3
$
33.2
$
25.7
Amortization of intangible
assets
17.3
12.4
65.8
41.6
Capital expenditures
14.2
9.1
55.1
32.0
Fire & Safety/Diversified
Products
Net sales
$
179.0
$
170.9
$
718.8
$
679.2
Adjusted EBITDA(b)
51.6
46.6
208.6
183.9
Adjusted EBITDA margin
28.9
%
27.3
%
29.0
%
27.1
%
Depreciation
$
2.2
$
2.1
$
8.9
$
8.4
Amortization of intangible
assets
1.6
1.7
6.4
6.6
Capital expenditures
2.3
3.0
9.7
10.5
Corporate Office and
Eliminations
Intersegment sales eliminations
$
(1.9
)
$
(1.0
)
$
(8.4
)
$
(3.8
)
Adjusted EBITDA(b)
(20.9
)
(21.1
)
(84.6
)
(85.7
)
Depreciation
0.2
0.2
1.0
0.5
Capital expenditures
0.3
—
0.9
0.2
Company
Net sales
$
788.9
$
810.7
$
3,273.9
$
3,181.9
Adjusted net sales(c)
788.9
810.7
3,273.9
3,164.0
Adjusted EBITDA(c)
203.6
218.9
899.6
884.2
Adjusted EBITDA margin(c)
25.8
%
27.0
%
27.5
%
27.9
%
Depreciation
$
15.3
$
13.7
$
57.2
$
50.7
Amortization of intangible
assets
24.3
19.8
94.9
69.0
Capital expenditures
21.6
20.0
89.9
68.0
(a)
Three and twelve month data includes the
results of the acquisitions of STC (December 2023), Iridian
Spectral Technologies (May 2023) and Muon B.V. and its subsidiaries
(November 2022) in the HST segment from the dates of acquisition
and twelve month data includes the results of the acquisitions of
KZ CO. (May 2022) and Nexsight, LLC and its businesses Envirosight,
WinCan, MyTana and Pipeline Renewal Technologies (February 2022) in
the FMT segment from the dates of acquisition. Three and twelve
month data also includes the results of Micropump (August 2023) and
Novotema (December 2023) in the HST segment and Knight (September
2022) in the FMT segment through the dates of disposition.
(b)
Segment Adjusted EBITDA excludes
unallocated corporate costs which are included in Corporate Office
and Eliminations.
(c)
These are non-GAAP financial measures. For
a reconciliation of these non-GAAP financial measures to their most
directly comparable measure calculated and presented in accordance
with GAAP, see the reconciliation tables below.
Non-GAAP Measures of Financial
Performance
The Company prepares its public financial statements in
conformity with accounting principles generally accepted in the
United States of America (GAAP). The Company supplements certain
GAAP financial performance metrics with non-GAAP financial
performance metrics. Management believes these non-GAAP financial
performance metrics provide investors with greater insight,
transparency and a more comprehensive understanding of the
financial information used by management in its financial and
operational decision making because certain of these adjusted
metrics exclude items not reflective of ongoing operations, as
identified in the reconciliations below. Reconciliations of
non-GAAP financial performance metrics to their most directly
comparable GAAP financial performance metrics are defined and
presented below and should not be considered a substitute for, nor
superior to, the financial data prepared in accordance with GAAP.
Due to rounding, numbers presented throughout this and other
documents may not add up or recalculate precisely. There were no
adjustments to GAAP financial performance metrics other than the
items noted below.
- Organic orders and net sales are calculated excluding amounts
from acquired or divested businesses during the first twelve months
of ownership or prior to divestiture, the impact of foreign
currency translation and the impact from the exit of a COVID-19
testing application.
- Adjusted net sales is calculated as net sales less the
acceleration of previously deferred revenue related to the exit of
a COVID-19 testing application.
- Adjusted gross profit is calculated as gross profit less the
impact from the exit of a COVID-19 testing application plus fair
value inventory step-up charges.
- Adjusted gross margin is calculated as adjusted gross profit
divided by adjusted net sales.
- Adjusted net income attributable to IDEX is calculated as net
income attributable to IDEX plus fair value inventory step-up
charges, plus restructuring expenses and asset impairments, less
the net impact from the exit of a COVID-19 testing application,
less the gain on sale of businesses - net, less gains on sales of
assets, plus the credit loss on a note receivable from a
collaborative partner, plus acquisition-related intangible asset
amortization, all net of the statutory tax expense or benefit.
- Adjusted diluted EPS attributable to IDEX is calculated as
adjusted net income attributable to IDEX divided by the diluted
weighted average shares outstanding.
- Consolidated Adjusted EBITDA is calculated as consolidated
earnings before interest, taxes, depreciation and amortization, or
consolidated EBITDA, plus fair value inventory step-up charges,
plus restructuring expenses and asset impairments, less the net
impact from the exit of a COVID-19 testing application, less the
gain on sale of businesses - net, less gains on sales of assets
plus the credit loss on a note receivable from a collaborative
partner.
- Consolidated Adjusted EBITDA margin is calculated as
Consolidated Adjusted EBITDA divided by adjusted net sales.
- Free cash flow is calculated as cash flow from operating
activities less capital expenditures.
All table footnotes can be found at the end of the Non-GAAP
section.
Table 1: Reconciliations of the Change in Net Sales to
Organic Net Sales
For the Quarter Ended
December 31, 2023
For the Year Ended
December 31, 2023
FMT
HST
FSDP
IDEX
FMT
HST
FSDP
IDEX
Change in net sales
4
%
(11
%)
5
%
(3
%)
7
%
(2
%)
6
%
3
%
Less:
Net impact from
acquisitions/divestitures
—
%
7
%
—
%
3
%
2
%
9
%
—
%
5
%
Impact from foreign currency
1
%
1
%
2
%
—
%
—
%
—
%
—
%
—
%
Impact from the exit of a COVID-19
testing application (1)
—
%
—
%
—
%
—
%
—
%
(1
%)
—
%
(1
%)
Change in organic net sales
3
%
(19
%)
3
%
(6
%)
5
%
(10
%)
6
%
(1
%)
Table 2: Reconciliations of Reported-to-Adjusted Gross
Profit, Net Sales and Gross Margin (dollars in millions)
For the Quarter Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Gross profit
$
336.8
$
345.7
$
1,446.9
$
1,426.9
Impact from the exit of a COVID-19
testing application(1)
—
—
—
(17.9
)
Fair value inventory step-up
charges
0.4
8.1
1.6
8.5
Adjusted gross profit
$
337.2
$
353.8
$
1,448.5
$
1,417.5
Net sales
$
788.9
$
810.7
$
3,273.9
$
3,181.9
Impact from the exit of a COVID-19
testing application(1)
(17.9
)
Adjusted net sales
$
3,164.0
Gross margin
42.7
%
42.6
%
44.2
%
44.8
%
Adjusted gross margin
42.7
%
43.6
%
44.2
%
44.8
%
Table 3: Reconciliations of Reported-to-Adjusted Net Income
Attributable to IDEX and Diluted EPS Attributable to IDEX (in
millions, except per share amounts)
For the Quarter Ended December
31,
For the Year Ended December
31,
2023
2022
2023
2022
Reported net income attributable to
IDEX
$
108.6
$
130.0
$
596.1
$
586.9
Fair value inventory step-up
charges
0.4
8.1
1.6
8.5
Tax impact on fair value inventory
step-up charges
(0.1
)
(2.1
)
(0.4
)
(2.2
)
Restructuring expenses and asset
impairments
2.7
1.7
10.9
4.5
Tax impact on restructuring expenses
and asset impairments
(0.7
)
(0.2
)
(2.5
)
(0.9
)
Net impact from the exit of a COVID-19
testing application(1)
—
—
—
(1.1
)
Tax impact on the exit of a COVID-19
testing application
—
—
—
0.3
Loss (gain) on sale of
businesses
9.1
—
(84.7
)
(34.8
)
Tax impact on loss (gain) on sale of
businesses
—
—
22.7
5.5
Gains on sales of assets
—
—
—
(2.7
)
Tax impact on gains on sales of
assets
—
—
—
0.6
Credit loss on note receivable from
collaborative partner(2)
—
—
7.7
—
Tax impact on credit loss on note
receivable from collaborative partner
—
—
(1.6
)
—
Acquisition-related intangible asset
amortization
24.3
19.8
94.9
69.0
Tax impact on acquisition-related
intangible asset amortization
(5.3
)
(4.5
)
(21.1
)
(15.5
)
Adjusted net income attributable to
IDEX
$
139.0
$
152.8
$
623.6
$
618.1
Table 3: Reconciliations of Reported-to-Adjusted Net Income
Attributable to IDEX and Diluted EPS Attributable to IDEX (in
millions, except per share amounts) (continued)
For the Quarter Ended December
31,
For the Year Ended December
31,
2023
2022
2023
2022
Reported diluted EPS attributable to
IDEX
$
1.43
$
1.71
$
7.85
$
7.71
Fair value inventory step-up
charges
—
0.11
0.02
0.11
Tax impact on fair value inventory
step-up charges
—
(0.03
)
—
(0.03
)
Restructuring expenses and asset
impairments
0.04
0.02
0.15
0.06
Tax impact on restructuring expenses
and asset impairments
(0.01
)
—
(0.03
)
(0.01
)
Net impact from the exit of a COVID-19
testing application(1)
—
—
—
(0.01
)
Tax impact on the exit of a COVID-19
testing application
—
—
—
—
Loss (gain) on sale of
businesses
0.12
—
(1.12
)
(0.46
)
Tax impact on loss (gain) on sale of
businesses
—
—
0.30
0.07
Gains on sales of assets
—
—
—
(0.03
)
Tax impact on gains on sales of
assets
—
—
—
0.01
Credit loss on note receivable from
collaborative partner(2)
—
—
0.10
—
Tax impact on credit loss on note
receivable from collaborative partner
—
—
(0.02
)
—
Acquisition-related intangible asset
amortization
0.32
0.26
1.25
0.91
Tax impact on acquisition-related
intangible asset amortization
(0.07
)
(0.06
)
(0.28
)
(0.21
)
Adjusted diluted EPS attributable to
IDEX
$
1.83
$
2.01
$
8.22
$
8.12
Diluted weighted average shares
outstanding
75.8
75.9
75.9
76.0
Table 4: Reconciliations of Net Income to Adjusted EBITDA and
Net Sales to Adjusted Net Sales (dollars in millions)
For the Quarter Ended December
31,
2023
2022
FMT
HST
FSDP
Corporate
IDEX
FMT
HST
FSDP
Corporate
IDEX
Reported net income
$
—
$
—
$
—
$
—
$
108.3
$
—
$
—
$
—
$
—
$
130.0
Provision for income taxes
—
—
—
—
31.9
—
—
—
—
33.5
Interest expense
—
—
—
—
11.6
—
—
—
—
12.1
Other (income) - net
—
—
—
—
(0.4
)
—
—
—
—
(0.6
)
Loss on sale of business
—
—
—
—
9.1
—
—
—
—
—
Operating income (loss)
82.3
53.7
47.2
(22.7
)
160.5
76.2
79.2
42.6
(23.0
)
175.0
Other income (expense) - net
0.2
(1.9
)
0.5
1.6
0.4
(0.2
)
(0.6
)
(0.2
)
1.6
0.6
Depreciation
3.8
9.1
2.2
0.2
15.3
4.1
7.3
2.1
0.2
13.7
Amortization
5.4
17.3
1.6
—
24.3
5.7
12.4
1.7
—
19.8
Fair value inventory step-up
charges
—
0.4
—
—
0.4
—
8.1
—
—
8.1
Restructuring expenses and asset
impairments
0.5
2.1
0.1
—
2.7
0.6
0.6
0.4
0.1
1.7
Adjusted EBITDA
$
92.2
$
80.7
$
51.6
$
(20.9
)
$
203.6
$
86.4
$
107.0
$
46.6
$
(21.1
)
$
218.9
Net sales (eliminations)
$
299.1
$
312.7
$
179.0
$
(1.9
)
$
788.9
$
287.8
$
353.0
$
170.9
$
(1.0
)
$
810.7
Net income margin
13.7
%
16.0
%
Adjusted EBITDA margin
30.8
%
25.8
%
28.9
%
n/m
25.8
%
30.0
%
30.3
%
27.3
%
n/m
27.0
%
Table 4: Reconciliations of Net Income to Adjusted EBITDA and
Net Sales to Adjusted Net Sales (dollars in millions)
(continued)
For the Year Ended December
31,
2023
2022
FMT
HST
FSDP
Corporate
IDEX
FMT
HST
FSDP
Corporate
IDEX
Reported net income
$
—
$
—
$
—
$
—
$
595.6
$
—
$
—
$
—
$
—
$
586.7
Provision for income taxes
—
—
—
—
164.7
—
—
—
—
162.7
Interest expense
—
—
—
—
51.7
—
—
—
—
40.7
Other expense (income) - net
—
—
—
—
5.2
—
—
—
—
(3.9
)
Gain on sale of businesses -
net
—
—
—
—
(84.7
)
—
—
—
—
(34.8
)
Operating income (loss)
374.2
253.4
192.2
(87.3
)
732.5
334.0
334.9
166.6
(84.1
)
751.4
Other income (expense) - net
2.2
(1.1
)
0.2
(6.5
)
(5.2
)
1.8
1.9
2.4
(2.2
)
3.9
Depreciation
14.1
33.2
8.9
1.0
57.2
16.1
25.7
8.4
0.5
50.7
Amortization
22.7
65.8
6.4
—
94.9
20.8
41.6
6.6
—
69.0
Fair value inventory step-up
charges
—
1.6
—
—
1.6
0.4
8.1
—
—
8.5
Restructuring expenses and asset
impairments
2.9
6.6
0.9
0.5
10.9
2.3
0.7
1.4
0.1
4.5
Net impact from the exit of a COVID-19
testing application(1)
—
—
—
—
—
—
(1.1
)
—
—
(1.1
)
Gains on sales of assets
—
—
—
—
—
(1.2
)
—
(1.5
)
—
(2.7
)
Credit loss on note receivable from
collaborative partner(2)
—
—
—
7.7
7.7
—
—
—
—
—
Adjusted EBITDA
$
416.1
$
359.5
$
208.6
$
(84.6
)
$
899.6
$
374.2
$
411.8
$
183.9
$
(85.7
)
$
884.2
Net sales (eliminations)
$
1,247.1
$
1,316.4
$
718.8
$
(8.4
)
$
3,273.9
$
1,167.3
$
1,339.2
$
679.2
$
(3.8
)
$
3,181.9
Impact from the exit of a COVID-19
testing application(1)
(17.9
)
(17.9
)
Adjusted net sales
(eliminations)
$
1,321.3
$
3,164.0
Net income margin
18.2
%
18.4
%
Adjusted EBITDA margin
33.4
%
27.3
%
29.0
%
n/m
27.5
%
32.1
%
31.2
%
27.1
%
n/m
27.9
%
Table 5: Reconciliations of Cash Flows from Operating
Activities to Free Cash Flow (dollars in millions)
For the Quarter Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Cash flows from operating
activities
$
201.0
$
167.3
$
716.7
$
557.4
Less: Capital expenditures
21.6
20.0
89.9
68.0
Free cash flow
$
179.4
$
147.3
$
626.8
$
489.4
Table 6: Reconciliation of Estimated 2024 Change in Net Sales
to Change in Organic Net Sales
Guidance
First Quarter 2024
Full Year 2024
Low End
High End
Low End
High End
Change in net sales
(6
%)
(5
%)
1
%
3
%
Less:
Net impact from
acquisitions/divestitures
—
%
—
%
1
%
1
%
Impact from foreign currency
1
%
1
%
—
%
—
%
Change in organic net sales
(7
%)
(6
%)
—
%
2
%
Table 7: Reconciliation of Estimated 2024 Diluted EPS
Attributable to IDEX to Adjusted Diluted EPS Attributable to
IDEX
Guidance
First Quarter 2024
Full Year 2024
Estimated diluted EPS attributable to
IDEX
$1.45 - $1.50
$7.15 - $7.45
Acquisition-related intangible asset
amortization
$0.33
$1.32
Tax impact on acquisition-related
intangible asset amortization
$(0.08)
$(0.32)
Estimated adjusted diluted EPS
attributable to IDEX
$1.70 - $1.75
$8.15 - $8.45
Table 8: Reconciliation of Estimated 2024 Net Income to
Adjusted EBITDA (dollars in millions)
Guidance
First Quarter 2024
Full Year 2024
Low End
High End
Low End
High End
Reported net income
$
109.9
$
113.6
$
542.5
$
565.5
Provision for income taxes
32.7
33.9
162.0
168.9
Interest expense
11.6
11.6
44.6
44.6
Depreciation
16.5
16.5
68.8
68.8
Amortization of intangible
assets
25.3
25.3
100.1
100.1
Adjusted EBITDA
$
196.0
$
200.9
$
918.0
$
947.9
Net sales
$
794.2
$
802.6
$
3,320.3
$
3,385.6
Net income margin
14
%
14
%
16
%
17
%
Adjusted EBITDA margin
25
%
25
%
28
%
28
%
(1) The impact to net sales and gross
margin represents the acceleration of previously deferred revenue
of $17.9 million as a result of a customer’s decision to
discontinue further investment in commercializing its COVID-19
testing application in 2022 that did not reoccur in 2023, which was
largely offset by an impairment charge during the same period
resulting in a $1.1 million net impact on net income.
(2) Represents a reserve recorded on an
investment with a collaborative partner.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240206795454/en/
Investor Contact: Allison S. Lausas Vice President and
Chief Accounting Officer (847) 498-7070
Grafico Azioni IDEX (NYSE:IEX)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni IDEX (NYSE:IEX)
Storico
Da Dic 2023 a Dic 2024
