IDEX Corporation Reports Record Sales, Income and Free Cash Flow; 16 Percent Sales Growth and 19 Percent Increase in Diluted EPS

IDEX Corporation (NYSE: IEX) today announced its financial results for the quarter ended June 30, 2007. From continuing operations, orders in the second quarter were up 17 percent, sales increased 16 percent, and income rose 21 percent to $41.8 million compared to the second quarter of 2006. Diluted earnings per share from continuing operations were 51 cents versus 43 cents in the year-ago quarter. Second Quarter 2007 Highlights (from Continuing Operations) Orders in the second quarter of 2007 were $339.3 million, 17 percent higher than a year ago; excluding foreign currency translation and acquisitions, organic orders growth was 7 percent. Second quarter sales of $344.5 million rose 16 percent; excluding foreign currency translation and acquisitions, organic sales growth was 6 percent. Operating margin at 20 percent was 110 basis points higher than a year ago. Income increased 21 percent to $41.8 million. Diluted EPS at 51 cents was 8 cents or 19 percent ahead of last year. EBITDA of $78.7 million was 23 percent of sales and covered interest expense by 13 times. Second quarter free cash flow was $58.3 million. As previously announced, the acquisition of Quadro Engineering was completed in a strategic expansion of the company’s Fluid & Metering Technologies segment. "We are pleased with our performance in the first six months of 2007. As we move into the second half of 2007, the markets we serve and our overall business fundamentals remain solid. We foresee continued strong global demand for our fluid and metering, fire and safety and engineered band clamping products. Within health and science, we believe our core analytical instrumentation, IVD, biotechnology and the other end market segments remain highly attractive. "For the second half of 2007, organic growth rates in both Fluid & Metering Technologies and Fire & Safety Products are projected to achieve results that are consistent with their respective first half performance. The third quarter of 2007 for Dispensing Equipment is expected to result in flat sales versus the prior year and operating margin rates that are consistent with prior-year levels, due to timing of retail projects. The second half 2007 growth rate for Health & Science Technologies will continue to be adversely impacted by the completion and the exiting of specific, maturing OEM contracts. As we progress through 2007, we are focused throughout the company on generating growth and reinvesting in new products, markets and strategic acquisitions that complement our current capabilities." Lawrence D. Kingsley Chairman and Chief Executive Officer Second Quarter Financial Results (Dollars in millions, except per share amounts)     For the Quarter Ended June 30, March 31, 2007 2006 Change 2007 Change Orders Written $339.3 $289.9 17 % $360.0 (6) % Sales 344.5 296.6 16 333.3 3 Operating Income 68.9 56.0 23 61.6 12 Operating Margin 20.0 % 18.9 % 110 bp 18.5 % 150 bp Income from Continuing Operations $41.8 $34.6 21 % $36.8 14 % Net Income 41.6 35.0 19 36.7 14 Diluted EPS: Income from Continuing Operations .51 .43 19 .45 13 Net Income .51 .43 19 .45 13   Other Data (from Continuing Operations) - Income before Taxes $63.3 $52.2 21 % $55.7 14 % - Depreciation and Amortization 9.3 7.8 20 9.1 2 - Interest 6.1 4.1 49 6.4 (5) - EBITDA 78.7 64.1 23 71.2 10 - Cash Flow from Operating Activities 63.8 44.7 43 15.7 307 - Capital Expenditures 7.4 5.7 30 5.4 37 - Excess Tax Benefit from Stock-Based Compensation 1.9 2.1 (11) 1.8 5 - Free Cash Flow 58.3 41.1 42 12.1 384 Q2 Orders, Sales, Income and EPS from Continuing Operations Increase Year-over-Year New orders in the quarter totaled $339.3 million, 17 percent higher than the same period in 2006. Excluding the impact of acquisitions and foreign currency translation, orders were up 7 percent. Sales in the second quarter of $344.5 million increased 16 percent from the prior-year period. Excluding the impact of acquisitions and foreign currency translation, organic growth was 6 percent. Sales to international customers represented approximately 47 percent of total sales for the second quarter of 2007 versus 45 percent in the same period of 2006. Second quarter operating margin was 20 percent, 110 basis points higher than the 18.9 percent reported in the prior-year period. Gross margin of 42.8 percent was 130 basis points higher than the second quarter of 2006. Volume leverage, impact from acquisitions, strategic sourcing and operational excellence initiatives drove the gross margin improvement. Selling, general and administrative expenses as a percent of sales were 22.8 percent, slightly higher compared to the prior year as a result of acquisitions and reinvestment in the business to drive organic growth. Income from continuing operations of $41.8 million increased 21 percent over the second quarter of 2006. Diluted earnings per share from continuing operations of 51 cents improved 8 cents, or 19 percent, from the second quarter of 2006. Year-to-Date Financial Results (Dollars in millions, except per share amounts)     Six Months Ended June 30 2007 2006 Change Orders Written $699.2 $584.0 20% Sales 677.8 563.0 20 Operating Income 130.4 103.8 26 Operating Margin 19.2% 18.4% 80bp Income from Continuing Operations $78.7 $64.2 23% Net Income 78.3 65.0 20 Diluted EPS: Income from Continuing Operations .96 .79 22 Net Income .96 .80 20   Other Data - Income before Taxes $119.1 $97.0 23% - Depreciation and Amortization 18.5 14.1 31 - Interest 12.4 7.0 78 - EBITDA 150.0 118.1 27 - Cash Flow from Operating Activities 79.5 68.8 16 - Capital Expenditures 12.8 9.7 32 - Excess Tax Benefit from Stock-Based Compensation 3.6 4.6 (21) - Free Cash Flow 70.3 63.7 10 First Half Orders, Sales, Income and EPS from Continuing Operations Ahead of Last Year New orders for the first six months of 2007 totaled $699.2 million, 20 percent higher than the first six months of last year. Excluding the impact of acquisitions and foreign currency translation, orders in the first six months of 2007 were 7 percent higher than in 2006. Sales for the first six months of 2007 increased 20 percent to $677.8 million from $563.0 million a year earlier. Excluding the impact of acquisitions and foreign currency translation, organic growth was 7 percent. Sales to international customers from base businesses represented approximately 45 percent of total sales for the first six months of both 2007 and 2006. First half operating margin was 19.2 percent, 80 basis points higher than the 18.4 percent reported in the prior-year period. Gross margin in first half 2007 improved 100 basis points to 42.4 percent, while selling, general and administrative expenses as a percent of sales of 23.2 percent increased by 20 basis points from the first half of 2006, reflecting acquisitions and reinvestment in the business to drive organic growth. Year-to-date income from continuing operations of $78.7 million increased 23 percent compared to 2006. Diluted earnings per share from continuing operations of 96 cents rose 17 cents, or 22 percent, from the 79 cents recorded for the first half of 2006. Segment Results Fluid & Metering Technologies sales in the second quarter of $141.1 million reflected 31 percent growth (23 percent acquisitions, 7 percent organic and 1 percent foreign currency translation). Strong global demand for infrastructure-related applications, coupled with acquisitions, drove the sales growth within the segment. Operating margin of 21.4 percent represented a 130 basis point improvement compared with the second quarter of 2006. Health & Science Technologies sales in the second quarter of $82.4 million reflected 1 percent growth. Compared to second quarter 2006, the expected decline from the completion of specific, maturing OEM contracts resulted in approximately 200 basis points of lower sales growth in the quarter. Operating margin of 18.4 percent represented a 50 basis point improvement compared with the second quarter of 2006. Dispensing Equipment sales of $49.9 million in the second quarter reflected 12 percent growth (7 percent organic and 5 percent foreign currency translation) due primarily to the improved market conditions in Europe. Operating margin of 28.6 percent represented a 230 basis point improvement compared with the second quarter of 2006. Fire & Safety/Diversified Products sales in the second quarter of $72.8 million reflected 13 percent growth (10 percent organic and 3 percent foreign currency translation) driven by continued innovation and increased global demand. Operating margin of 24.9 percent represented a 30 basis point decline compared with the second quarter of 2006. For the second quarter of 2007, Fluid & Metering Technologies contributed 41 percent of sales and 39 percent operating income; Health & Science Technologies accounted for 24 percent of sales and 20 percent of operating income; Dispensing Equipment accounted for 14 percent of sales and 18 percent of operating income; and Fire & Safety/Diversified Products represented 21 percent of sales and 23 percent of operating income. Acquisition of Quadro Engineering As previously announced, on June 12, 2007, the company acquired Quadro Engineering, a leading provider of particle control solutions for the pharmaceutical and bio-pharmaceutical markets. Headquartered in Waterloo, Ontario, Canada, Quadro Engineering has revenues of approximately $22 million (USD) and is being operated as a standalone unit within the company’s Fluid & Metering Technologies segment. The addition of Quadro Engineering is expected to be accretive to IDEX’s earnings beginning in 2008. "We are extremely pleased with Quadro Engineering’s decision to become part of IDEX,” said IDEX Chairman and Chief Executive Officer Larry Kingsley. "Quadro is a technology leader in customized, critical particle control applications, providing a basis for us to serve selective, higher growth sanitary applications worldwide. Quadro’s capabilities expand IDEX’s ability to provide customized solutions for the movement, transformation, measurement and dispensing of high value fluids and solids.” Strong Financial Position IDEX ended the quarter with total assets of $1.7 billion and working capital of $98 million. Total borrowings were $329 million at June 30, 2007. Free cash flow (cash flow from operating activities less capital expenditures plus the excess tax benefit from stock-based compensation) for the first half of 2007 was $70 million. Year-to-date, 2007 EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $150 million (22 percent of sales) and covered interest expense by 12 times. Debt-to-total capitalization at June 30, 2007, was 24 percent. Progress Continues on Growth Initiatives: Commercial and Operational Excellence "Commercial and operational excellence remain at the foundation of our business to drive innovation and leveraged earnings growth," Kingsley said. "We continue to reinvest in marketing and sales to expand our served market and deploy new, company-wide best practices in adjacent market identification. Our focus on applied fluidics solutions and other carefully targeted engineered products segments, such as our expansion into critical particle control applications through the recent acquisition of Quadro, continues to serve as the basis for geographic, product and industry segment expansion. "Our operating mindset, which centers on Mixed Model Lean, enables us to respond flexibly to new market and customer requirements across all four business segments," Kingsley said. "We are focused on reducing plant cycle times and lead times to help customers remain competitive. At the same time, other continuous improvement and strategic sourcing initiatives are improving our operating efficiency. This contributed to the 110 basis point improvement in our operating margin in the second quarter to 20 percent.” Conference Call to be Broadcast over the Internet IDEX will broadcast its second quarter earnings conference call over the Internet on Tuesday, July 24, 2007 at 1:30 p.m. CDT. 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 also will be able to hear a replay of the call by dialing 800.642.1687 or 706.645.9291 and using conference ID #5708063. 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. (Tables follow) IDEX CORPORATION Condensed Statements of Consolidated Operations (in thousands except per share amounts)     Second Quarter Ended Six Months Ended June 30, June 30,     2007   2006   2007   2006   Net sales $ 344,482 $ 296,573 $ 677,750 $ 562,961 Cost of sales   196,948   173,652   390,552   329,907 Gross profit 147,534 122,921 287,198 233,054 Selling, general and administrative expenses   78,669   66,937   156,781   129,292 Operating income 68,865 55,984 130,417 103,762 Other income - net 521 258 1,094 269 Interest expense   6,058   4,061   12,437   7,002 Income from continuing operations before income taxes 63,328 52,181 119,074 97,029 Provision for income taxes   21,493   17,562   40,408   32,829 Income from continuing operations 41,835 34,619 78,666 64,200 Income (loss) from discontinued operations, net of tax   (205)   337   (369)   834 Net income   $ 41,630   $ 34,956   $ 78,297   $ 65,034     Basic Earnings per Common Share: Continuing operations $ 0.52 $ 0.44 $ 0.98 $ 0.81 Discontinued operations   -   -   (0.01)   0.01 Net income   $ 0.52   $ 0.44   $ 0.97   $ 0.82   Diluted Earnings per Common Share: Continuing operations $ 0.51 $ 0.43 $ 0.96 $ 0.79 Discontinued operations   -   -   -   0.01 Net income   $ 0.51   $ 0.43   $ 0.96   $ 0.80     Share Data:   Basic weighted average common shares outstanding 80,595 79,521 80,429 79,237   Diluted weighted average common shares outstanding   82,046   81,043   81,855   80,928     Condensed Consolidated Balance Sheets (in thousands) June 30, December 31,             2007   2006   Assets Current assets Cash and cash equivalents $ 52,025 $ 77,941 Receivables - net 199,320 166,485 Inventories 174,054 160,687 Assets held for sale 776 829 Other current assets           20,093   11,966 Total current assets 446,268 417,908 Property, plant and equipment - net 169,513 165,949 Goodwill and intangible assets 1,128,378 1,083,963 Other noncurrent assets           4,953   3,001 Total assets           $ 1,749,112   $1,670,821   Liabilities and shareholders' equity Current liabilities Trade accounts payable $ 90,991 $ 75,444 Accrued expenses 89,371 95,170 Short-term borrowings 158,240 8,210 Liabilities held for sale 129 373 Dividends payable           9,758   8,055 Total current liabilities 348,489 187,252 Long-term borrowings 170,404 353,770 Other noncurrent liabilities           163,376   150,527 Total liabilities 682,269 691,549 Shareholders' equity           1,066,843   979,272 Total liabilities and shareholders' equity           $ 1,749,112   $1,670,821       IDEX CORPORATION Company and Business Group Financial Information (dollars in thousands)     Second Quarter Ended Six Months Ended June 30, (a) June 30, (a)     2007     2006     2007     2006       Fluid & Metering Technologies Net sales $ 141,094 $ 107,840 $ 277,800 $ 209,760 Operating income (b) 30,133 21,646 59,884 41,405 Operating margin 21.4 % 20.1 % 21.6 % 19.7 % Depreciation and amortization $ 4,269 $ 2,507 $ 8,118 $ 4,740 Capital expenditures 3,473 1,103 6,109 2,235   Health & Science Technologies Net sales $ 82,370 $ 81,299 $ 163,090 $ 144,320 Operating income (b) 15,167 14,513 29,030 26,793 Operating margin 18.4 % 17.9 % 17.8 % 18.6 % Depreciation and amortization $ 2,277 $ 2,444 $ 4,846 $ 3,843 Capital expenditures 1,129 1,506 2,780 2,383   Dispensing Equipment Net sales $ 49,859 $ 44,415 $ 97,752 $ 85,823 Operating income (b) 14,248 11,688 25,952 22,018 Operating margin 28.6 % 26.3 % 26.5 % 25.7 % Depreciation and amortization $ 1,030 $ 1,052 $ 1,577 $ 2,065 Capital expenditures 1,462 531 1,754 1,190   Fire & Safety/Diversified Products Net sales $ 72,808 $ 64,552 $ 142,004 $ 125,768 Operating income (b) 18,117 16,267 33,475 29,922 Operating margin 24.9 % 25.2 % 23.6 % 23.8 % Depreciation and amortization $ 1,529 $ 1,540 $ 3,054 $ 3,078 Capital expenditures 813 1,628 1,699 2,766   Company Net sales $ 344,482 $ 296,573 $ 677,750 $ 562,961 Operating income 68,865 55,984 130,417 103,762 Operating margin 20.0 % 18.9 % 19.2 % 18.4 % Depreciation and amortization (c) $ 9,340 $ 7,802 $ 18,479 $ 14,095 Capital expenditures 7,347 5,688 13,130 9,703                               (a) Second quarter data includes acquisition of Quadro (June 2007) in the Fluid & Metering Technologies Group and EPI (May 2006) in the Health & Science Technologies Group, while six month data includes acquisition of Quadro in the Fluid & Metering Technologies Group, JUN-AIR (February 2006) and EPI in the Health & Science Technologies Group and Airshore (January 2006) in the Fire & Safety/Diversified Products Group from the dates of acquisition.   (b) Group operating income excludes unallocated corporate operating expenses.   (c) Excludes amortization of debt issuance expenses and unearned compensation.