IDEX (IEX) 10-Q 2010 Q1 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2010
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-10235

IDEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware (State or other jurisdiction of incorporation or organization)	36-3555336 (I.R.S. Employer Identification No.)
630 Dundee Road, Northbrook, Illinois (Address of principal executive offices)	60062 (Zip Code)

Registrant’s telephone number:(847) 498-7070

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” inRule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).

Yes o     No þ

Number of shares of common stock of IDEX Corporation outstanding as of April 29, 2010: 81,222,963 (net of treasury shares).

TABLE OF CONTENTS

Part I. Financial Information
Item 1.	Financial Statements.	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Shareholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
	Cautionary Statement Under the Private Securities Litigation Reform Act	16
	Historical Overview	16
	Results of Operations	16
	Liquidity and Capital Resources	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	20
Item 4.	Controls and Procedures.	21
PART II.Other Information
Item 1.	Legal Proceedings.	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	22
Item 5.	Other Information.	22
Item 6.	Exhibits.	22
Signatures		23
Exhibit Index		24
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements.

IDEX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)
(unaudited)

	March 31, 2010			December 31, 2009
ASSETS
Current assets
Cash and cash equivalents	$	71,388		$	73,526
Receivables, less allowance for doubtful accounts of $6,135 at March 31, 2010 and $6,160 at December 31, 2009		206,387			183,178
Inventories — net		166,211			159,463
Other current assets		40,847			35,545
Total current assets		484,833			451,712
Property, plant and equipment — net		173,774			178,283
Goodwill		1,163,320			1,180,445
Intangible assets — net		271,551			281,354
Other noncurrent assets		7,061			6,363
Total assets	$	2,100,539		$	2,098,157
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Trade accounts payable	$	81,386		$	73,020
Accrued expenses		99,985			98,730
Short-term borrowings		2,609			8,346
Dividends payable		—			9,586
Total current liabilities		183,980			189,682
Long-term borrowings		383,098			391,754
Deferred income taxes		148,776			148,806
Other noncurrent liabilities		93,641			99,811
Total liabilities		809,495			830,053
Commitment and contingencies
Shareholders’ equity
Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par value; Issued: None		—			—
Common stock:
Authorized: 150,000,000 shares, $.01 per share par value Issued: 83,848,525 shares at March 31, 2010 and 83,510,320 shares at December 31, 2009		838			835
Additional paid-in capital		408,205			401,570
Retained earnings		933,602			896,977
Treasury stock at cost: 2,540,052 shares at March 31, 2010 and December 31, 2009		(56,706	)		(56,706	)
Accumulated other comprehensive income		5,105			25,428
Total shareholders’ equity		1,291,044			1,268,104
Total liabilities and shareholders’ equity	$	2,100,539		$	2,098,157

See Notes to Condensed Consolidated Financial Statements.

1

IDEX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)

	Three Months Ended
	March 31,
	2010		2009
Net sales	$	355,598	$	326,613
Cost of sales		208,057		203,419
Gross profit		147,541		123,194
Selling, general and administrative expenses		87,781		81,782
Restructuring expenses		1,867		2,251
Operating income		57,893		39,161
Other income (expense) — net		254		(191	)
Interest expense		3,434		4,821
Income before income taxes		54,713		34,149
Provision for income taxes		18,088		11,544
Net income	$	36,625	$	22,605
Basic earnings per common share	$	0.45	$	0.28
Diluted earnings per common share	$	0.45	$	0.28
Share data:
Basic weighted average common shares outstanding		80,080		79,513
Diluted weighted average common shares outstanding		81,509		80,219

See Notes to Condensed Consolidated Financial Statements.

2

IDEX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands except share amounts)
(unaudited)

					Accumulated Other Comprehensive Income
								Net
								Actuarial
								Losses
								and Prior
								Service
								Costs on
								Pensions
								and Other			Cumulative
	Common Stock							Post-			Unrealized Losses
	and Additional				Cumulative			Retirement			on Derivatives						Total
	Paid-In		Retained		Translation			Benefit			Designated as Cash			Treasury			Shareholders’
	Capital		Earnings		Adjustment			Plans			Flow Hedges			Stock			Equity
Balance, December 31, 2009	$	402,405	$	896,977	$	59,399		$	(27,258	)	$	(6,713	)	$	(56,706	)	$	1,268,104
Net income		—		36,625		—			—			—			—			36,625
Other comprehensive income, net of tax:
Cumulative translation adjustment		—		—		(22,641	)		—			—			—			(22,641	)
Amortization of retirement obligations		—		—		—			743			—			—			743
Net change on derivatives designated as cash flow hedges		—		—		—			—			1,575			—			1,575
Other comprehensive income		—		—		—			—			—			—			(20,323	)
Comprehensive income		—		—		—			—			—			—			16,302
Issuance of 354,496 shares of common stock from issuance of unvested shares, exercise of stock options and deferred compensation plans, net of tax benefit		1,890		—		—			—			—			—			1,890
Share-based compensation		4,748		—		—			—			—			—			4,748
Balance, March 31, 2010	$	409,043	$	933,602	$	36,758		$	(26,515	)	$	(5,138	)	$	(56,706	)	$	1,291,044

See Notes to Condensed Consolidated Financial Statements.

3

IDEX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Three Months
	Ended
	March 31,
	2010			2009
Cash flows from operating activities
Net income	$	36,625		$	22,605
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,016			7,591
Amortization of intangible assets		6,268			6,003
Amortization of debt issuance expenses		104			73
Stock-based compensation expense		4,748			5,545
Deferred income taxes		1,664			6,327
Excess tax benefit from stock-based compensation		(554	)		(640	)
Changes in:
Receivables		(26,271	)		(5,025	)
Inventories		(9,496	)		213
Trade accounts payable		10,320			(721	)
Accrued expenses		3,417			(18,024	)
Other — net		(7,710	)		(6,304	)
Net cash flows provided by operating activities		27,131			17,643
Cash flows from investing activities
Additions to property, plant and equipment		(7,548	)		(4,852	)
Proceeds from fixed assets disposals		—			1,610
Other — net		—			250
Net cash flows used in investing activities		(7,548	)		(2,992	)
Cash flows from financing activities
Borrowings under credit facilities		—			32,310
Payments under credit facilities		(11,077	)		(37,271	)
Dividends paid		(9,697	)		(9,523	)
Proceeds from stock option exercises		1,197			1,116
Excess tax benefit from stock-based compensation		554			640
Other — net		—			(204	)
Net cash flows used in financing activities		(19,023	)		(12,932	)
Effect of exchange rate changes on cash and cash equivalents		(2,698	)		25
Net increase (decrease) in cash		(2,138	)		1,744
Cash and cash equivalents at beginning of year		73,526			61,353
Cash and cash equivalents at end of period	$	71,388		$	63,097
Supplemental cash flow information
Cash paid for:
Interest	$	3,572		$	5,119
Income taxes		5,843			8,143
Significant non-cash activities:
Issuance of unvested shares		182			—

See Notes to Condensed Consolidated Financial Statements.

4

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.   Basis of Presentation and Significant Accounting Policies

The Condensed Consolidated Financial Statements of IDEX Corporation (“IDEX” or the “Company”) have been prepared in accordance with the instructions toForm 10-Q under the Securities Exchange Act of 1934, as amended. The statements are unaudited but include all adjustments, consisting only of recurring items, except as noted, which the Company considers necessary for a fair presentation of the information set forth herein. The results of operations for the three months ended March 31, 2010 are not necessarily indicative of the results to be expected for the entire year.

The condensed consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2009.

2.   Restructuring

The Company has recorded restructuring costs as a result of cost reduction efforts and facility closings. Accruals have been recorded based on these costs and primarily consist of employee termination benefits. We record expenses for employee termination benefits based on the guidance of Accounting Standards Codification (“ASC”) 420, “Exit or Disposal Cost Obligations.” These expenses are included in Restructuring expenses in the Consolidated Statements of Operations while the related restructuring accruals are included in Accrued expenses in our Consolidated Balance Sheets.

During the three months ended March 31, 2010, the Company recorded an additional $1.9 million of pre-tax restructuring expenses related to our 2009 restructuring initiative for employee severance related to employee reductions across various functional areas as well as facility closures resulting from the Company’s cost savings initiatives. In the first three months of 2009, the Company recorded pre-tax restructuring expenses totaling $2.3 million related to this same initiative. The 2009 initiative has included severance benefits for over 500 employees. This initiative is expected to be completed by the end of 2010 with an expected additional total cost of $2.0-$3.0 million during the remainder of 2010.

Pre-tax restructuring expenses, by segment, for the three months ended March 31, 2010 were as follows:

	Severance
	Costs		Exit Costs		Total
	(in thousands)
Fluid & Metering Technologies	$	351	$	18	$	369
Health & Science Technologies		509		54		563
Dispensing Equipment		115		—		115
Fire & Safety/Diversified Products		352		—		352
Corporate/Other		396		72		468
Total restructuring costs	$	1,723	$	144	$	1,867

5

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pre-tax restructuring expenses, by segment, for the three months ended March 31, 2009 were as follows:

	Severance
	Costs
	(Reversals)			Exit Costs		Total
	(in thousands)
Fluid & Metering Technologies	$	812		$	288	$	1,100
Health & Science Technologies		657			191		848
Dispensing Equipment		(311	)		381		70
Fire & Safety/Diversified Products		23			—		23
Corporate/Other		160			50		210
Total restructuring costs	$	1,341		$	910	$	2,251

Restructuring accruals of $4.2 million and $6.9 million as of March 31, 2010 and December 31, 2009, respectively, are reflected in Accrued expenses in our Condensed Consolidated Balance Sheets as follows (in thousands):

Balance at January 1, 2010	$	6,878
Restructuring costs		1,867
Payments/Utilization		(4,511	)
Balance at March 31, 2010	$	4,234

3.   Business Segments

The Company consists of four reportable business segments: Fluid & Metering Technologies, Health & Science Technologies, Dispensing Equipment and Fire & Safety/Diversified Products.

The Fluid & Metering Technologies Segment designs, produces and distributes positive displacement pumps, flow meters, injectors, and other fluid-handling pump modules and systems and provides flow monitoring and other services for water and wastewater. The Health & Science Technologies Segment designs, produces and distributes a wide range of precision fluidics solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications, and precision gear and peristaltic pump technologies that meet exacting OEM specifications. The Dispensing Equipment Segment produces precision equipment for dispensing, metering and mixing colorants, paints, and hair colorants and other personal care products used in a variety of retail and commercial businesses around the world. The Fire & Safety/Diversified Products Segment produces firefighting pumps and controls, rescue tools, lifting bags and other components and systems for the fire and rescue industry, and engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications.

6

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Information on the Company’s business segments is presented below, based on the nature of products and services offered. The Company evaluates performance based on several factors, of which operating income is the primary financial measure. Intersegment sales are accounted for at fair value as if the sales were to third parties.

	Three Months
	Ended
	March 31,
	2010			2009
	(In thousands)
Net sales:
Fluid & Metering Technologies:
External customers	$	172,709		$	156,731
Intersegment sales		168			287
Total group sales		172,877			157,018
Health & Science Technologies:
External customers		85,982			72,028
Intersegment sales		1,540			2,160
Total group sales		87,522			74,188
Dispensing Equipment:
External customers		33,538			32,873
Intersegment sales		16			—
Total group sales		33,554			32,873
Fire & Safety/Diversified Products:
External customers		63,369			64,981
Intersegment sales		32			1
Total group sales		63,401			64,982
Intersegment elimination		(1,756	)		(2,448	)
Total net sales	$	355,598		$	326,613
Operating income:
Fluid & Metering Technologies	$	32,140		$	22,618
Health & Science Technologies		18,552			9,850
Dispensing Equipment		6,639			3,979
Fire & Safety/Diversified Products		13,071			13,571
Corporate office and other		(12,509	)		(10,857	)
Total operating income	$	57,893		$	39,161

4.   Earnings Per Common Share

Earnings per common share (“EPS”) are computed by dividing net income by the weighted average number of shares of common stock (basic) plus common stock equivalents outstanding (diluted) during the period. Common stock equivalents consist of stock options, which have been included in the calculation of weighted average shares outstanding using the treasury stock method, unvested shares, and shares issuable in connection with certain deferred compensation agreements (“DCUs”).

7

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ASC 260 “Earnings Per Share”, (“ASC 260”) concludes that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders. If awards are considered participating securities, the Company is required to apply the two-class method of computing basic and diluted earnings per share. The Company has determined that its outstanding unvested shares are participating securities. Accordingly, earnings per common share are computed using the two-class method prescribed by ASC 260. Net income attributable to common shareholders was reduced by $0.4 million and $0.2 million for the three months ended March 31, 2010 and 2009, respectively.

Basic weighted average shares reconciles to diluted weighted average shares as follows:

	Three
	Months
	Ended March 31,
	2010		2009
	(in thousands)
Basic weighted average common shares outstanding		80,080		79,513
Dilutive effect of stock options, unvested shares, and DCUs		1,429		706
Diluted weighted average common shares outstanding		81,509		80,219

Options to purchase approximately 3.0 million and 4.4 million shares of common stock as of March 31, 2010 and 2009, respectively, were not included in the computation of diluted EPS because the exercise price was greater than the average market price of the Company’s common stock and, therefore, the effect of their inclusion would be antidilutive.

5.   Inventories

The components of inventories as of March 31, 2010 and December 31, 2009 were:

	March 31,		December 31,
	2010		2009
	(In thousands)
Raw materials and component parts	$	115,714	$	113,777
Work-in-process		23,225		20,669
Finished goods		46,493		43,626
Total		185,432		178,072
Less inventory reserves		19,221		18,609
Totalinventories-net	$	166,211	$	159,463

Inventories are stated at the lower of cost or market. Cost, which includes material, labor, and factory overhead, is determined on a FIFO basis.

8

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

6.   Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the three months ended March 31, 2010, by reportable segment, were as follows:

	Fluid &			Health &						Fire & Safety/
	Metering			Science			Dispensing			Diversified
	Technologies			Technologies			Equipment			Products			Total
	(In thousands)
Balance at December 31, 2009	$	533,979		$	392,379		$	104,973		$	149,114		$	1,180,445
Foreign currency translation		(7,503	)		(855	)		(5,095	)		(3,672	)		(17,125	)
Balance at March 31, 2010	$	526,476		$	391,524		$	99,878		$	145,442		$	1,163,320

ASC 350 “Goodwill and Other Intangible Assets” requires that goodwill be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. Annually on October 31st, goodwill and other acquired intangible assets with indefinite lives are tested for impairment. The Company concluded that the fair value of each of the reporting units was in excess of the carrying value as of October 31, 2009. The Company did not consider there to be any triggering event that would require an interim impairment assessment, therefore none of the goodwill or other acquired intangible assets with indefinite lives were tested for impairment during the three months ended March 31, 2010.

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at March 31, 2010 and December 31, 2009:

	At March 31, 2010									At December 31, 2009
	Gross							Weighted		Gross
	Carrying		Accumulated					Average		Carrying		Accumulated
	Amount		Amortization			Net		Life		Amount		Amortization			Net
Amortizable intangible assets:
Patents	$	9,762	$	(4,534	)	$	5,228		11	$	9,914	$	(4,289	)	$	5,625
Trade names		62,623		(11,029	)		51,594		15		63,589		(10,144	)		53,445
Customer relationships		155,282		(35,813	)		119,469		12		157,890		(32,422	)		125,468
Non-compete agreements		4,239		(3,470	)		769		4		4,268		(3,356	)		912
Unpatented technology		35,450		(6,907	)		28,543		14		36,047		(6,240	)		29,807
Other		6,232		(2,384	)		3,848		10		6,236		(2,239	)		3,997
Total amortizable intangible assets		273,588		(64,137	)		209,451				277,944		(58,690	)		219,254
Banjo trade name		62,100		—			62,100				62,100		—			62,100
	$	335,688	$	(64,137	)	$	271,551			$	340,044	$	(58,690	)	$	281,354

The Banjo trade name is an indefinite lived intangible asset which is tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired.

9

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

7.   Accrued Expenses

The components of accrued expenses as of March 31, 2010 and December 31, 2009 were:

	March 31,		December 31,
	2010		2009
	(In thousands)
Payroll and related items	$	38,474	$	39,315
Management incentive compensation		5,885		12,157
Income taxes payable		14,844		3,757
Insurance		4,732		4,375
Warranty		4,754		4,383
Deferred revenue		3,090		4,480
Restructuring		4,234		6,878
Other		23,972		23,385
Total accrued expenses	$	99,985	$	98,730

8.   Borrowings

Borrowings at March 31, 2010 and December 31, 2009 consisted of the following:

	March 31,		December 31,
	2010		2009
	(In thousands)
Credit Facility	$	290,359	$	298,732
Term Loan		90,000		95,000
Other borrowings		5,348		6,368
Total borrowings		385,707		400,100
Less current portion		2,609		8,346
Total long-term borrowings	$	383,098	$	391,754

The Company maintains a $600.0 million unsecured domestic, multi-currency bank revolving credit facility (“Credit Facility”), which expires on December 21, 2011. In 2008, the Credit Facility was amended to allow the Company to designate certain foreign subsidiaries as designated borrowers. Upon approval from the lenders, the designated borrowers were allowed to receive loans under the Credit Facility. A designated borrower sublimit was established as the lesser of the aggregate commitments or $100.0 million. As of the amendment date, Fluid Management Europe B.V., (FME) was approved by the lenders as a designated borrower. On March 16, 2010, IDEX UK Ltd. (“IDEX UK”) was approved by the lenders as a designated borrower which will allow them to receive loans under the Credit Facility. IDEX UK had no borrowings under the Credit Facility as of March 31, 2010. FME’s borrowings under the Credit Facility at March 31, 2010 and December 31, 2009 were $40.4 million (Euro 30.0 million) and $48.7 million (Euro 34.0 million), respectively. As the FME borrowings under the Credit Facility are Euro denominated and the cash flows that will be used to make payments of principal and interest are predominately denominated in Euro, the Company does not anticipate any significant foreign exchange gains or losses in servicing this debt.

At March 31, 2010 there was $290.4 million outstanding under the Credit Facility and outstanding letters of credit totaled approximately $7.1 million. The net available borrowing under the Credit Facility as of March 31, 2010, was approximately $302.5 million. Interest is payable quarterly on the outstanding borrowings at the bank agent’s reference rate. Interest on borrowings based on LIBOR plus an applicable margin is payable on the maturity date of the borrowing, or quarterly from the effective date for borrowings exceeding three months. The applicable

10

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

margin is based on the Company’s senior, unsecured, long-term debt rating and can range from 24 basis points to 50 basis points. Based on the Company’s BBB rating at March 31, 2010, the applicable margin was 40 basis points. An annual Credit Facility fee, also based on the Company’s credit rating, is currently 10 basis points and is payable quarterly.

At March 31, 2010 the Company had one interest rate exchange agreement related to the Credit Facility. The interest rate exchange agreement, expiring in January 2011, effectively converted $250.0 million of floating-rate debt into fixed-rate debt at an interest rate of 3.25%. The fixed rate noted above is comprised of the fixed rate on the interest rate exchange agreement and the Company’s current margin of 40 basis points on the Credit Facility.

On April 18, 2008, the Company completed a $100.0 million unsecured senior bank term loan agreement (“Term Loan”) with covenants consistent with the existing Credit Facility and a maturity on December 21, 2011. At March 31, 2010, there was $90.0 million outstanding under the Term Loan. Interest under the Term Loan is based on the bank agent’s reference rate or LIBOR plus an applicable margin and is payable at the end of the selected interest period, but at least quarterly. The applicable margin is based on the Company’s senior, unsecured, long-term debt rating and can range from 45 to 100 basis points. Based on the Company’s current debt rating, the applicable margin is 80 basis points. The Term Loan requires a repayment of $7.5 million in April 2011, with the remaining balance due on December 21, 2011. The Company used the proceeds from the Term Loan to pay down existing debt outstanding under the Credit Facility.

At March 31, 2010 the Company had an interest rate exchange agreement related to the Term Loan that expires December 2011. With a current notional amount of $90.0 million, the agreement effectively converted $100.0 million of floating-rate debt into fixed-rate debt at an interest rate of 4.00%. The fixed rate is comprised of the fixed rate on the interest rate exchange agreement and the Company’s current margin of 80 basis points on the Term Loan.

9.   Derivative Instruments

The Company enters into cash flow hedges to reduce the exposure to variability in certain expected future cash flows. The type of cash flow hedges the Company enters into includes foreign currency contracts and interest rate exchange agreements that effectively convert a portion of floating-rate debt to fixed-rate debt and are designed to reduce the impact of interest rate changes on future interest expense.

The effective portion of gains or losses on interest rate exchange agreements is reported in accumulated other comprehensive income in shareholders’ equity and reclassified into net income in the same period or periods in which the hedged transaction affects net income. The remaining gain or loss in excess of the cumulative change in the present value of future cash flows or the hedged item, if any, is recognized into net income during the period of change.

Fair values relating to derivative financial instruments reflect the estimated amounts that the Company would receive or pay to sell or buy the contracts based on quoted market prices of comparable contracts at each balance sheet date.

At March 31, 2010, the Company had two interest rate exchange agreements. The first interest rate exchange agreement, expiring in January 2011, effectively converted $250.0 million of floating-rate debt into fixed-rate debt at an interest rate of 3.25%. The second interest rate exchange agreement, expiring December 2011, with a current notional amount of $90.0 million, effectively converted $100.0 million of floating-rate debt into fixed-rate debt at an interest rate of 4.00%. The fixed rate is comprised of the fixed rate on the interest rate exchange agreements and the Company’s current margin of 40 basis points for the Credit Facility and 80 basis points on the Term Loan.

Based on interest rates at March 31, 2010, approximately $7.4 million of the amount included in accumulated other comprehensive income in shareholders’ equity at March 31, 2010 will be recognized to net income over the next 12 months as the underlying hedged transactions are realized.

11

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth the fair value amounts of derivative instruments held by the Company as of March 31, 2010 and December 31, 2009:

	Fair Value-Liabilities
	March 31,		December 31,
	2010		2009		Balance Sheet Caption
	(In thousands)
Interest rate contracts	$	8,055	$	10,497	Other noncurrent liabilities

The following table summarizes the net change recognized and the amounts and location of income (expense) and gain (loss) reclassified into income for interest rate contracts and foreign currency contracts during the first three months of March 31, 2010 and 2009:

	Gain (Loss) Recognized in					Expense
	Other					and Loss
	Comprehensive					Reclassified into
	Income					Income						Income
	2010		2009			2010			2009			Statement Caption
	(In thousands)
Interest rate contracts	$	116	$	(1,772	)	$	(2,326	)	$	(1,692	)	Interest expense
Foreign exchange contracts		—		(69	)		—			(80	)	Sales

10.   Fair Value Measurements

ASC 820 “Fair Value Measurements and Disclosures” defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

•  Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•  Level 2: Inputs, other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•  Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table summarizes the basis used to measure the Company’s financial assets and liabilities at fair value on a recurring basis in the balance sheet at March 31, 2010 and December 31, 2009:

	Basis of Fair Value Measurements
	Balance at
	March 31, 2010		Level 1		Level 2		Level 3
	(In thousands)
Money market investment	$	8,115	$	8,115		—		—
Interest rate exchange agreement derivative financial instruments	$	8,055		—	$	8,055		—

12

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Basis of Fair Value Measurements
	Balance at
	December 31, 2009		Level 1		Level 2		Level 3
	(In thousands)
Money market investment	$	9,186	$	9,186		—		—
Interest rate exchange agreement derivative financial instruments	$	10,497		—	$	10,497		—

In determining the fair value of the Company’s interest rate exchange agreement derivatives, the Company uses a present value of expected cash flows based on market observable interest rate yield curves commensurate with the term of each instrument and the credit default swap market to reflect the credit risk of either the Company or the counterparty.

The carrying value of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their fair values because of the short term nature of these instruments. At March 31, 2010, the fair value of our Credit Facility and Term Loan, based on the current market rates for debt with similar credit risk and maturity, was approximately $370.3 million compared to the carrying value of $380.4 million.

11.   Common and Preferred Stock

At March 31, 2010 and December 31, 2009, the Company had 150 million shares of authorized common stock, with a par value of $.01 per share and 5 million shares of preferred stock with a par value of $.01 per share. No preferred stock was issued as of March 31, 2010 and December 31, 2009.

12.   Share-Based Compensation

During the three months ending March 31, 2010, the Company granted approximately 0.9 million stock options and 0.2 million unvested shares, respectively. During the three months ending March 31, 2009, the Company granted approximately 1.2 million stock options and 0.3 million unvested shares, respectively.

Total compensation cost for stock options is as follows:

	Three Months
	Ended March 31,
	2010			2009
	(In thousands)
Cost of goods sold	$	258		$	324
Selling, general and administrative expenses		1,957			2,247
Total expense before income taxes		2,215			2,571
Income tax benefit		(700	)		(843	)
Total expense after income taxes	$	1,515		$	1,728

13

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Total compensation cost for unvested shares is as follows:

	Three Months
	Ended March 31,
	2010			2009
	(In thousands)
Cost of goods sold	$	127		$	62
Selling, general and administrative expenses		2,406			2,912
Total expense before income taxes		2,533			2,974
Income tax benefit		(567	)		(472	)
Total expense after income taxes	$	1,966		$	2,502

Classification of stock compensation cost within the Consolidated Statements of Operations is consistent with classification of cash compensation for the same employees and $0.1 million of compensation cost was capitalized as part of inventory.

As of March 31, 2010, there was $15.8 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.5 years, and $16.1 million of total unrecognized compensation cost related to unvested shares that is expected to be recognized over a weighted-average period of 1.2 years.

13.   Retirement Benefits

The Company sponsors several qualified and nonqualified defined benefit and defined contribution pension plans and other postretirement plans for its employees. The following tables provide the components of net periodic benefit cost for its major defined benefit plans and its other postretirement plans.

	Pension Benefits
	Three Months Ended March 31,
	2010						2009
	U.S.			Non-U.S.			U.S.			Non-U.S.
	(In thousands)
Service cost	$	469		$	184		$	425		$	192
Interest cost		1,140			552			1,109			493
Expected return on plan assets		(1,108	)		(83	)		(913	)		(179	)
Net amortization		1,127			76			1,218			86
Net periodic benefit cost	$	1,628		$	729		$	1,839		$	592

	Other Benefits
	Three Months Ended
	March 31,
	2010			2009
	(In thousands)
Service cost	$	130		$	146
Interest cost		259			337
Net amortization		(99	)		12
Net periodic benefit cost	$	290		$	495

The Company previously disclosed in its financial statements for the year ended December 31, 2009, that it expected to contribute approximately $4.7 million to these pension plans and $1.0 million to its other postretirement

14

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

benefit plans in 2010. As of March 31, 2010, $1.3 million of contributions have been made to the pension plans and $0.1 million have been made to its other postretirement benefit plans. The Company presently anticipates contributing up to an additional $4.3 million in 2010 to fund these pension plans and other postretirement benefit plans.

In March of 2010 the United States enacted two new laws relating to healthcare. The enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 has resulted in comprehensive health care reform. The Company is currently evaluating the requirements and effect of this new legislation and does not expect it to have a material impact on the consolidated financial position, results of operations or cash flows of the Company.

14.   Legal Proceedings

The Company is party to various legal proceedings arising in the ordinary course of business, none of which are expected to have a material adverse effect on its business, financial condition, results of operations or cash flows.

15.   Income Taxes

The Company’s provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The provision for income taxes increased to $18.1 million in the first quarter of 2010 from $11.5 million in the first quarter of 2009. The effective tax rate decreased to 33.1% for the first quarter of 2010 compared to 33.8% in the first quarter of 2009 due to the mix of global pre-tax income among jurisdictions.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Due to the potential for resolution of federal, state and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized tax benefits balance may change within the next twelve months by a range of zero to $0.6 million.

16.   Subsequent Events

On April 15, 2010, the Company acquired Seals, Ltd (“Seals”) for cash consideration of approximately $54.0 million (£35 million). Seals, consisting of the Polymer Engineering and Perlast divisions, is a leading provider of proprietary high performance seals and advanced sealing solutions for a diverse range of global industries, including analytical instrumentation, semiconductor/solar and process technologies. Seals’ Polymer Engineering division focuses on sealing solutions for hazardous duty applications. The Perlast division produces highly engineered seals for analytical instrumentation, pharmaceutical, electronics, and food applications. Headquartered in Blackburn, England, Seals has annual revenues of approximately $32.0 million (£21 million). Seals will operate as part of the Health and Science Technologies segment.

On April 15, 2010, the Company entered into a forward starting interest rate swap with a notional amount of $300.0 million and an effective date of December 8, 2010 whereby the Company will pay fixed interest and will receive floating rate interest based on LIBOR through the termination date of December 8, 2020. This swap was entered into in anticipation of the expected issuance of $300.0 million of new debt during the fourth quarter of 2010 and is designed to lock in the current market interest rate.

15

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Under the Private Securities Litigation Reform Act

The “Historical Overview” and the “Liquidity and Capital Resources” sections of this management’s discussion and analysis of our financial condition and results of operations contain 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, operating results and are indicated by words or phrases such as “expects,” “should,” “will,” 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 filing. The risks and uncertainties include, but are not limited to, IDEX Corporation’s (“IDEX” or the “Company”) ability to integrate and operate acquired businesses on a profitable basis and other risks and uncertainties identified under the heading “Risk Factors” included in item 1A of the Company’s Annual Report onForm 10-K for the year ended December 31, 2009 and information contained in subsequent periodic reports filed by IDEX with the Securities and Exchange Commission. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.

Historical Overview

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’ specifications. Our products are sold in niche markets to a wide range of industries throughout the world. Accordingly, our businesses are affected by levels of industrial activity and economic conditions in the U.S. and in other countries where we do business and by the relationship of the U.S. dollar to other currencies. Levels of capacity utilization and capital spending in certain industries and overall industrial activity are among the factors that influence the demand for our products.

The Company consists of four reportable segments: Fluid & Metering Technologies, Health & Science Technologies, Dispensing Equipment and Fire & Safety/Diversified Products.

The Fluid & Metering Technologies Segment designs, produces and distributes positive displacement pumps, flow meters, injectors, and other fluid-handling pump modules and systems and provides flow monitoring and other services for water and wastewater. The Health & Science Technologies Segment designs, produces and distributes a wide range of precision fluidics solutions, including very high precision, low-flow rate pumping solutions required in analytical instrumentation, clinical diagnostics and drug discovery, high performance molded and extruded biocompatible medical devices and implantables, air compressors used in medical, dental and industrial applications, and precision gear and peristaltic pump technologies that meet exacting OEM specifications. The Dispensing Equipment Segment produces precision equipment for dispensing, metering and mixing colorants, paints, and hair colorants and other personal care products used in a variety of retail and commercial businesses around the world. The Fire & Safety/Diversified Products Segment produces firefighting pumps and controls, rescue tools, lifting bags and other components and systems for the fire and rescue industry, and engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications

Results of Operations

The following is a discussion and analysis of our financial position and results of operations for the period ended March 31, 2010 and 2009. For purposes of this discussion and analysis section, reference is made to the table below and the Company’s Condensed Consolidated Statements of Operations included in Item 1.

Performance in the Three Months Ended March 31, 2010 Compared with the Same Period of 2009

Sales in the three months ended March 31, 2010 were $355.6 million, a 9% increase from the comparable period last year. This increase reflects a 6% increase in organic sales and 3% favorable foreign currency translation. Sales to international customers represented approximately 47% of total sales in the current period compared to 46% in the same period in 2009.

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For the first quarter of 2010, Fluid & Metering Technologies contributed 48 percent of sales and 46 percent of operating income; Health & Science Technologies accounted for 25 percent of sales and 26 percent of operating income; Dispensing Equipment accounted for 9 percent of sales and 9 percent of operating income; and Fire & Safety/Diversified Products represented 18 percent of sales and 19 percent of operating income.

Fluid & Metering Technologies sales of $172.9 million for the three months ended March 31, 2010 increased $15.9 million, or 10% compared with 2009, reflecting a 7% increase in organic growth and 3% favorable foreign currency translation. The increase in organic growth was driven by strong global growth in energy, water and waste water markets. In the first quarter of 2010, organic sales increased approximately 9% domestically and 6% internationally. Organic business sales to customers outside the U.S. were approximately 44% of total segment sales during the first quarter of 2010 and 39% in 2009.

Health & Science Technologies sales of $87.5 million increased $13.3 million, or 18% in the first quarter of 2010 compared with 2009. This reflects a 17% increase in organic growth and 1% of favorable foreign currency translation. The increase in organic growth reflects market strength across all Health & Science Technologies products. In the first quarter of 2010, organic sales increased 12% domestically and 25% internationally. Organic business sales to customers outside the U.S. were approximately 40% of total segment sales in the first quarter of 2010, compared to 38% in 2009.

Dispensing Equipment sales of $33.6 million increased $0.7 million, or 2% in the first quarter of 2010 compared with 2009. This increase reflects 5% of favorable foreign currency translation offset by a 3% decrease in organic growth. The decrease in organic growth is due to continued market softness in North America and Europe. In the first quarter of 2010, organic sales increased 3% domestically, primarily due to a large replenishment project and decreased 6% internationally. Organic sales to customers outside the U.S. were approximately 61% of total segment sales in the first quarter of 2010, compared with 67% in the comparable quarter of 2009.

Fire & Safety/Diversified Products sales of $63.4 million decreased $1.6 million, or 2% in the first quarter of 2010 compared with 2009. This change reflects a 5% decrease in organic business volume, partially offset by 3% favorable foreign currency translation. The change in organic business reflects weakness in fire suppression, partially offset by strength in rescue equipment and engineered band clamping systems. In the first quarter of 2010, organic business sales decreased 7% domestically and 3% internationally. Organic sales to customers outside the U.S. were approximately 54% of total segment sales in the first quarter of 2010, compared to 57% in 2009.

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	Three Months
	Ended March 31,
	2010			2009
Fluid & Metering Technologies
Net sales	$	172,877		$	157,018
Operating income(1)		32,140			22,618
Operating margin		18.6	%		14.4	%
Depreciation and amortization	$	8,022		$	7,769
Capital expenditures		3,608			2,557
Health & Science Technologies
Net sales	$	87,522		$	74,188
Operating income(1)		18,552			9,850
Operating margin		21.2	%	��	13.3	%
Depreciation and amortization	$	3,515		$	3,513
Capital expenditures		1,464			1,262
Dispensing Equipment
Net sales	$	33,554		$	32,873
Operating income(1)		6,639			3,979
Operating margin		19.8	%		12.1	%
Depreciation and amortization	$	1,033		$	784
Capital expenditures		213			218
Fire & Safety/Diversified Products
Net sales	$	63,401		$	64,982
Operating income(1)		13,071			13,571
Operating margin		20.6	%		20.9	%
Depreciation and amortization	$	1,452		$	1,280
Capital expenditures		864			822
Company
Net sales	$	355,598		$	326,613
Operating income(1)		57,893			39,161
Operating margin		16.3	%		12.0	%
Depreciation and amortization(2)	$	14,284		$	13,594
Capital expenditures		7,350			5,152

(1)	Group operating income excludes unallocated corporate operating expenses.
(2)	Excludes amortization of debt issuance expenses.

Gross profit of $147.5 million in the first quarter of 2010 increased $24.3 million, or 20% from 2009. Gross profit as a percent of sales was 41.5% in the first quarter of 2010 and 37.7% in 2009. The increase in gross margin primarily reflects higher volume and product mix.

Selling, general and administrative (“SG&A”) expenses increased to $87.8 million in the first quarter of 2010 from $81.8 million in 2009. The increase primarily reflects higher volume related expenses. As a percent of sales, SG&A expenses were 24.7% for 2010 and 25.0% for 2009.

During the three months ended March 31, 2010, the Company recorded pre-tax restructuring expenses totaling $1.9 million, while $2.3 million was recorded for the same period in 2009. These restructuring expenses were mainly attributable to employee severance related to employee reductions across various functional areas and facility closures resulting from the Company’s cost savings initiatives.

18

Operating income of $57.9 million and operating margins of 16.3% in the first quarter of 2010 were up from the $39.2 million and 12.0% recorded in 2009, primarily reflecting an increase in volume, cost reductions due to our restructuring initiatives and prior year acquisition related charges. In the Fluid & Metering Technologies Segment, operating income of $32.1 million and operating margins of 18.6% in the first quarter of 2010 were up from the $22.6 million and 14.4% recorded in 2009 principally due to higher sales, cost reduction initiatives and prior year acquisition related charges. In the Health & Science Technologies Segment, operating income of $18.6 million and operating margins of 21.2% in the first quarter of 2010 were up from the $9.9 million and 13.3% recorded in 2009 due to higher volume, cost reduction initiatives and acquisition related charges recorded in the first quarter of 2009. In the Dispensing Equipment Segment, operating income of $6.6 million and operating margins of 19.8% in the first quarter of 2010 were up from the $4.0 million of operating income and 12.1% recorded in 2009, due to cost reduction initiatives and improved productivity. Operating income and operating margins in the Fire & Safety/Diversified Products Segment of $13.1 million and 20.6%, respectively, were slightly lower than the $13.6 million and 20.9% recorded in 2009.

Other income of $0.3 million in 2010 was higher than the $0.2 million loss in 2009, due to favorable foreign currency translation.

Interest expense decreased to $3.4 million in 2010 from $4.8 million in 2009. The decrease was principally due to lower debt levels.

The provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The provision for income taxes increased to $18.1 million in the first quarter of 2010 compared to the first quarter of 2009, which was $11.5 million. The effective tax rate decreased to 33.1% for the first quarter of 2010 compared to 33.8% in the first quarter of 2009 due to the mix of global pre-tax income among jurisdictions.

Net income for the current quarter of $36.6 million increased from the $22.6 million earned in the first quarter of 2009. Diluted earnings per share in the first quarter of 2010 of $0.45 increased $0.17, or 60%, compared with the first quarter of 2009.

Liquidity and Capital Resources

At March 31, 2010, working capital was $300.9 million and our current ratio was 2.6 to 1. Cash flows from operating activities increased $9.5 million, or 54%, to $27.1 million in the first three months of 2010 mainly due to increased volume.

Cash flows provided by operations were more than adequate to fund capital expenditures of $7.5 million and $4.9 million in the first three months of 2010 and 2009, respectively. Capital expenditures were generally for machinery and equipment that improved productivity and tooling to support the global sourcing initiatives, although a portion was for business system technology and replacement of equipment and facilities. Management believes that the Company has ample capacity in its plants and equipment to meet expected needs for future growth in the intermediate term.

The Company maintains a $600.0 million unsecured domestic, multi-currency bank revolving Credit Facility, which expires on December 21, 2011. At March 31, 2010 there was $290.4 million outstanding under the Credit Facility and outstanding letters of credit totaled approximately $7.1 million. The net available borrowing under the Credit Facility as of March 31, 2010, was approximately $302.5 million. Interest is payable quarterly on the outstanding borrowings at the bank agent’s reference rate. Interest on borrowings based on LIBOR plus an applicable margin is payable on the maturity date of the borrowing, or quarterly from the effective date for borrowings exceeding three months. The applicable margin is based on the Company’s senior, unsecured, long-term debt rating and can range from 24 basis points to 50 basis points. Based on the Company’s BBB rating at March 31, 2010, the applicable margin was 40 basis points. An annual Credit Facility fee, also based on the Company’s credit rating, is currently 10 basis points and is payable quarterly.

At March 31, 2010 the Company has one interest rate exchange agreement related to the Credit Facility. The interest rate exchange agreement, expiring in January 2011, effectively converted $250.0 million of floating-rate debt into fixed-rate debt at an interest rate of 3.25%. The fixed rate noted above is comprised of the fixed rate on the interest rate exchange agreement and the Company’s current margin of 40 basis points on the Credit Facility.

19

On April 18, 2008, the Company completed a $100.0 million unsecured senior bank term loan agreement (“Term Loan”), with covenants consistent with the existing Credit Facility and a maturity on December 21, 2011. At March 31, 2010, there was $90.0 million outstanding under the Term Loan. Interest under the Term Loan is based on the bank agent’s reference rate or LIBOR plus an applicable margin and is payable at the end of the selected interest period, but at least quarterly. The applicable margin is based on the Company’s senior, unsecured, long-term debt rating and can range from 45 to 100 basis points. Based on the Company’s current debt rating, the applicable margin is 80 basis points. The Term Loan requires a repayment of $7.5 million in April 2011, with the remaining balance due on December 21, 2011. The Company used the proceeds from the Term Loan to pay down existing debt outstanding under the Credit Facility. At March 31, 2010 the Company has an interest rate exchange agreement related to the Term Loan that expires December 2011. With a current notional amount of $90.0 million, the agreement effectively converted $100.0 million of floating-rate debt into fixed-rate debt at an interest rate of 4.00%. The fixed rate is comprised of the fixed rate on the interest rate exchange agreement and the Company’s current margin of 80 basis points on the Term Loan.

In March of 2010 the United States enacted two new laws relating to healthcare. The enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 has resulted in comprehensive health care reform. The Company is currently evaluating the requirements and effect of this new legislation and does not expect it to have a material impact on the consolidated financial position, results of operations or cash flows of the Company.

On April 15, 2010, the Company entered into a forward starting interest rate swap with a notional amount of $300.0 million and an effective date of December 8, 2010 whereby the Company will pay fixed interest and will receive floating rate interest based on LIBOR through the termination date of December 8, 2020. This swap was entered into in anticipation of the expected issuance of $300.0 million of new debt during the fourth quarter of 2010 and is designed to lock in the current market interest rate.

We believe for the next 12 months that cash flow from operations and our availability under the Credit Facility will be sufficient to meet our operating requirements, interest on all borrowings, required debt repayments, any authorized share repurchases, planned capital expenditures, and annual dividend payments to holders of common stock. In the event that suitable businesses are available for acquisition upon terms acceptable to the Board of Directors, we may obtain all or a portion of the financing for the acquisitions through the incurrence of additional long-term borrowings.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk.

The Company is subject to market risk associated with changes in foreign currency exchange rates and interest rates. We may, from time to time, enter into foreign currency forward contracts and interest rate swaps on our debt when we believe there is a financial advantage in doing so. A treasury risk management policy, adopted by the Board of Directors, describes the procedures and controls over derivative financial and commodity instruments, including foreign currency forward contracts and interest rate swaps. Under the policy, we do not use derivative financial or commodity instruments for trading purposes, and the use of these instruments is subject to strict approvals by senior officers. Typically, the use of derivative instruments is limited to foreign currency forward contracts and interest rate swaps on the Company’s outstanding long-term debt. The Company’s exposure related to derivative instruments is, in the aggregate, not material to its financial position, results of operations or cash flows.

The Company’s foreign currency exchange rate risk is limited principally to the Euro, British Pound, Canadian Dollar and Chinese Renminbi. We manage our foreign exchange risk principally through invoicing our customers in the same currency as the source of our products. The effect of transaction gains and losses is reported within “Other income (expense)-net” on the Condensed Consolidated Statements of Operations.

The Company’s interest rate exposure is primarily related to the $385.7 million of total debt outstanding at March 31, 2010. The majority of the debt is priced at interest rates that float with the market. In order to mitigate this interest exposure, the Company entered into interest rate exchange agreements that effectively converted $340.0 million of our floating-rate debt outstanding at March 31, 2010 to a fixed-rate. A 50-basis point movement in the interest rate on the remaining $45.7 million floating-rate debt would result in an approximate $0.2 million annualized increase or decrease in interest expense and cash flows.

20

Item 4.   Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SECRule 13a-15(b), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

There has been no change in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1.   Legal Proceedings.

The Company and six of its subsidiaries are presently named as defendants in a number of lawsuits claiming various asbestos-related personal injuries, allegedly as a result of exposure to products manufactured with components that contained asbestos. Such components were acquired from third party suppliers, and were not manufactured by any of the subsidiaries. To date, the majority of the Company’s settlements and legal costs, except for costs of coordination, administration, insurance investigation and a portion of defense costs, have been covered in full by insurance subject to applicable deductibles. However, the Company cannot predict whether and to what extent insurance will be available to continue to cover such settlements and legal costs, or how insurers may respond to claims that are tendered to them.

Claims have been filed in jurisdictions throughout the United States. Most of the claims resolved to date have been dismissed without payment. The balance have been settled for various insignificant amounts. Only one case has been tried, resulting in a verdict for the Company’s business unit.

No provision has been made in the financial statements of the Company, other than for insurance deductibles in the ordinary course, and the Company does not currently believe the asbestos-related claims will have a material adverse effect on the Company’s business, financial position, results of operations or cash flow.

The Company is also party to various other legal proceedings arising in the ordinary course of business, none of which is expected to have a material adverse effect on its business, financial condition, results of operations or cash flow.

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Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.

					Total Number of		Maximum Dollar
					Shares Purchased as		Value that May Yet
					Part of Publicly		be Purchased
	Total Number of		Average Price		Announced Plans		Under the Plans
Period	Shares Purchased		Paid per Share		or Programs(1)		or Programs(1)
January 1, 2010 to January 31, 2010		—		—		—	$	75,000,020
February 1, 2010 to February 28, 2010		—		—		—	$	75,000,020
March 1, 2010 to March 31, 2010		—		—		—	$	75,000,020
Total		—		—		—	$	75,000,020

(1) On April 21, 2008, IDEX’s Board of Directors authorized the repurchase of up to $125.0 million of its outstanding common shares either in the open market or through private transactions.

Item 5.   Other Information.

There has been no material change to the procedures by which security holders may recommend nominees to the Company’s board.

Item 6.   Exhibits.

The exhibits listed in the accompanying “Exhibit Index” are filed as part of this report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

IDEX Corporation

/s/  Dominic A. Romeo

Dominic A. Romeo

Vice President and Chief Financial Officer

(duly authorized principal financial officer)

/s/  Michael J. Yates

Michael J. Yates

Vice President and Chief Accounting Officer

(duly authorized principal accounting officer)

May 4, 2010

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EXHIBIT INDEX

Exhibit
Number			Description
	3	.1	Restated Certificate of Incorporation of IDEX Corporation (formerly HI, Inc.) (incorporated by reference to Exhibit No. 3.1 to the Registration Statement onForm S-1 of IDEX, et al., RegistrationNo. 33-21205, as filed on April 21, 1988)
	3	.1(a)	Amendment to Restated Certificate of Incorporation of IDEX Corporation (formerly HI, Inc.), (incorporated by reference to Exhibit No. 3.1(a) to the Quarterly Report of IDEX onForm 10-Q for the quarter ended March 31, 1996, Commission FileNo. 1-10235)
	3	.1(b)	Amendment to Restated Certificate of Incorporation of IDEX Corporation (incorporated by reference to Exhibit No. 3.1(b) to the Current Report of IDEX onForm 8-K dated March 24, 2005, Commission FileNo. 1-10235)
	3	.2	Amended and Restated By-Laws of IDEX Corporation (incorporated by reference to Exhibit No. 3.2 to Post-Effective Amendment No. 2 to the Registration Statement onForm S-1 of IDEX, et al., RegistrationNo. 33-21205, as filed on July 17, 1989)
	3	.2(a)	Amended and Restated Article III, Section 13 of the Amended and Restated By-Laws of IDEX Corporation (incorporated by reference to Exhibit No. 3.2(a) to Post-Effective Amendment No. 3 to the Registration Statement onForm S-1 of IDEX, et al., RegistrationNo. 33-21205, as filed on February 12, 1990)
	4	.1	Restated Certificate of Incorporation and By-Laws of IDEX Corporation (filed as Exhibits No. 3.1 through 3.2(a))
	4	.2	Specimen Certificate of Common Stock of IDEX Corporation (incorporated by reference to Exhibit No. 4.3 to the Registration Statement onForm S-2 of IDEX, et al., RegistrationNo. 33-42208, as filed on September 16, 1991)
	4	.3	Credit Agreement, dated as of December 21, 2006, among IDEX Corporation, Bank of America N.A. as Agent and Issuing Bank, and the other financial institutions party hereto (incorporated by reference to Exhibit No. 10.1 to the Current Report of IDEX onForm 8-K dated December 22, 2006, Commission FileNo. 1-10235)
	4	.3(a)	Amendment No. 2 to Credit Agreement, dated as of September 29, 2008, among IDEX Corporation, Bank of America N.A. as Agent and Issuing Bank, and the other financial institutions party hereto (incorporated by reference to Exhibit No. 4.3(a) to the Quarterly Report of IDEX onForm 10-Q for the quarter ended September 30, 2008, Commission FileNo. 1-10235)
	4	.4	Term Loan Agreement, dated April 18, 2008, among IDEX Corporation, Bank of America N.A. as Agent, and the other financial institutions party hereto (incorporated by reference to Exhibit No. 10.1 to the Current Report of IDEX onForm 8-K dated April 18, 2008, Commission FileNo. 1-10235)
	*31	.1	Certification of Chief Executive Officer Pursuant toRule 13a-14(a) orRule 15d-14(a)
	*31	.2	Certification of Chief Financial Officer Pursuant toRule 13a-14(a) orRule 15d-14(a)
	*32	.1	Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
	*32	.2	Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

* Filed herewith

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