IDEX Corporation Reports Fourth Quarter 2009 Results; Adjusted Earnings Per Share of 43 Cents

IDEX Corporation (NYSE: IEX) today announced its financial results for the three- and twelve-month periods ended December 31, 2009.

Fourth Quarter 2009 Results

New orders in the quarter totaled $348 million, up 4 percent compared to the prior-year period. Sales in the quarter totaled $343 million, 3 percent lower than the prior-year period. Both orders and sales were favorably impacted by 3 percent foreign currency translation and 1 percent acquisitions.

Fourth quarter 2009 operating income, adjusted for restructuring related charges of $3.8 million, was $56 million and resulted in adjusted operating margin of 16.4 percent, up 220 basis points from the prior year (excluding prior year restructuring related charges of $12.7 million). On an as-reported basis, fourth quarter operating income of $52 million was 39 percent higher than the prior-year period.

Excluding the impact of restructuring related charges, fourth quarter adjusted diluted earnings per share was 43 cents, an increase of 5 cents, or 13 percent, from the fourth quarter of the previous year (excluding prior year unfavorable impact of restructuring related charges). On an as-reported basis, diluted earnings per share of 40 cents increased 13 cents, or 48 percent, from the fourth quarter of the previous year.

Full Year 2009 Highlights

• Orders decreased 10 percent compared to the prior year (+5 percent acquisitions, -13 percent organic and -2 percent foreign currency translation).
• Sales decreased 11 percent compared to the prior year (+5 percent acquisitions, -14 percent organic and -2 percent foreign currency translation).
• Reported net income of $113 million was $14 million, or 11 percent, lower than the prior year. Excluding restructuring related charges and the acquisition related inventory fair value expense, adjusted net income of $124 million was $35 million, or 22 percent, lower than the prior year (excluding prior year restructuring and goodwill impairment charges).
• Diluted EPS of $1.40 was 13 cents, or 8 percent, lower than the prior year. Excluding restructuring related charges and the acquisition related inventory fair value expense, adjusted diluted EPS of $1.53 was 39 cents, or 20 percent, lower than the prior year (excluding prior year restructuring and goodwill impairment charges).
• EBITDA of $242 million was 18 percent of sales and covered interest expense by more than 14 times.
• Free cash flow of $190 million represented 168 percent of net income.

Fourth Quarter 2009 Business Highlights (excluding restructuring related charges)

Fluid & Metering Technologies

• Sales in the fourth quarter of $170 million reflected a 5 percent decrease compared to the fourth quarter of 2008 (+1 percent acquisitions, -9 percent organic and +3 percent foreign currency translation).
• Operating margin of 17.9 percent represented a 160 basis point improvement compared with the fourth quarter of 2008 primarily due to cost reduction initiatives.

Health & Science Technologies

• Sales in the fourth quarter of $80 million reflected a 3 percent increase compared to the fourth quarter of 2008 (+1 percent organic and +2 percent acquisitions).
• Operating margin of 22.2 percent reflected a 420 basis point improvement compared with the fourth quarter of 2008 primarily due to cost reduction initiatives and favorable mix within the segment.

Dispensing Equipment

• Sales of $23 million in the fourth quarter reflected a 10 percent decrease compared with the fourth quarter of 2008 (-17 percent organic and +7 percent foreign currency translation), as a result of continued deterioration in capital spending for both the North American and European markets.
• Operating margin of 12.3 percent reflected a significant improvement compared with the fourth quarter of 2008 primarily due to cost reduction initiatives.

Fire & Safety/Diversified Products

• Sales in the fourth quarter of $70 million reflected a 4 percent decrease compared with the fourth quarter of 2008 (-8 percent organic and +4 percent foreign currency translation).
• Operating margin of 25.5 percent represented a 100 basis point increase compared with the fourth quarter of 2008 primarily due to cost reduction initiatives and favorable mix within the segment.

For the fourth quarter of 2009, Fluid & Metering Technologies contributed 50 percent of sales and 44 percent of operating income; Health & Science Technologies accounted for 23 percent of sales and 26 percent of operating income; Dispensing Equipment accounted for 7 percent of sales and 4 percent of operating income; and Fire & Safety/Diversified Products represented 20 percent of sales and 26 percent of operating income.

Conference Call to be Broadcast over the Internet

IDEX will broadcast its fourth quarter earnings conference call over the Internet on Thursday February 4, 2010 at 9:30 a.m. CT. Chairman and Chief Executive Officer Larry Kingsley and Vice President and Chief Financial Officer Dominic Romeo 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 888.203.1112 (or 719.457.0820 for international participants) using the ID # 7923468.

A Note on 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.

Forward-Looking Statements

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 here.

About IDEX

IDEX 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.

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