IDEX Corporation (NYSE: IEX) today announced its financial results
for the three- and twelve- month periods ended December 31, 2013.
Full Year 2013 Highlights
Fourth Quarter 2013
Orders in the quarter of $519 million were up 8 percent from the prior
year period. Sales in the quarter totaled $521 million, 6 percent higher
than the prior year period. For the quarter, on an organic basis, orders
were 7 percent higher and sales were 5 percent higher than the prior
Fourth quarter 2013 operating income was $104 million, up 14% from the
adjusted prior year period. This resulted in an operating margin of 20
percent, up 150 basis points from the adjusted prior year operating
margin, primarily due to volume leverage and productivity. Operating
income includes $6 million of charges associated with cost-out actions
across our three segments partially offset by a $4 million gain on the
settlement of the contingent consideration agreement related to the
Matcon business acquired in July 2012.
Fourth quarter net income was $68 million, an increase of 18 percent
from the adjusted prior year. Fourth quarter earnings per share were 82
cents, an increase of 13 cents, or 19 percent, from the adjusted prior
Free cash flow of $95 million was a 20 percent increase from the prior
year and 140 percent of net income.
"IDEX finished 2013 with a strong fourth quarter, culminating in a
record year. Our flexible operating model allowed us to improve our cost
structure and reinvest in organic growth. For the full year 2013, we
delivered 7 percent order growth, expanded operating margins to 19.5
percent, generated record free cash flow of $379 million, and achieved
15 percent EPS growth.
The fourth quarter saw markets continue to stabilize, and sustained
order growth in the second half of 2013 provides solid momentum heading
into 2014. In the fourth quarter, we took targeted cost-out actions
across our three segments to further optimize our operating footprint.
Based on these actions and improved performance throughout 2013, we now
expect the Company's operating margins for 2014 to exceed 20 percent. I
am proud of our 2013 accomplishments and I am confident in IDEX's
ability to capitalize on long-term growth opportunities.
Fueled by free cash flow conversion of 148 percent in 2013, we returned
a record $240 million to shareholders via dividends and share
repurchases. Our balance sheet and ability to generate cash are stronger
As we enter 2014, we will continue to rigorously allocate our capital
and people where we can create advantage and value. Our strategy of
fully funding organic growth is unchanged, and we are committed to
further increasing shareholder value through strategic acquisitions,
shareholder dividends and share repurchases.
We expect global end market demand to remain uneven. Regardless, with
our focused efforts, we anticipate 3 to 5 percent organic revenue growth
in 2014 and EPS of $3.33 to $3.43, up 8 to 11 percent compared to 2013.
We expect first quarter 2014 EPS to be in the range of 83 to 85 cents,
up 12 to 15 percent."
Fourth Quarter 2013 Business Highlights (Operating
margin excludes non-cash impairment and restructuring charges in 2012)
Fluid & Metering Technologies
Health & Science Technologies
Fire & Safety/Diversified Products
For the fourth quarter of 2013, Fluid & Metering Technologies
contributed 42 percent of sales and 47 percent of operating income;
Health & Science Technologies accounted for 35 percent of sales and 28
percent of operating income; and Fire & Safety/Diversified Products
represented 23 percent of sales and 25 percent of operating income.
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 (dollars in millions)
Conference Call to be Broadcast over the
IDEX will broadcast its fourth quarter earnings conference call over the
Internet on Thursday, January 30, 2014 at 9:30 a.m. CT. Chairman and
Chief Executive Officer Andy Silvernail and Vice President and Chief
Financial Officer Heath Mitts 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 855.859.2056 (or 404.537.3406 for international
participants) using the ID # 30410743.
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
IDEX Corporation is an applied solutions company specializing in fluid
and metering technologies, health and science technologies, 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 website at www.idexcorp.com.
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