EXHIBIT 99.1
TRADED: NYSE (IEX)
For further information contact:
AT THE COMPANY:
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Wayne P. Sayatovic
Senior Vice President-Finance
847-498-7070
FOR IMMEDIATE RELEASE
TUESDAY, APRIL 16, 2002
IDEX CORPORATION REPORTS FIRST QUARTER RESULTS;
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2002 PERFORMANCE DEPENDS ON SPEED OF ECONOMIC RECOVERY
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NORTHBROOK, IL, April 16 - IDEX Corporation (NYSE:IEX) today reported that
orders, sales and earnings for the three months ended March 31, 2002, were
improved from fourth quarter levels but lower than the comparable quarter of
last year.
First Quarter Highlights
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. Sales of $174.9 million were up 4 percent from the fourth quarter but 7
percent lower than a year ago.
. Compared with last year's first quarter, sales saw 2 percent growth from
acquisitions, offset by 8 percent lower base business activity and a
negative 1 percent currency translation.
. Operating margins (before restructuring charge and goodwill amortization)
were improved from the fourth quarter but were below last year's first
quarter.
. Diluted EPS (on a comparable accounting basis) was 6 percent higher than
the fourth quarter but 16 percent lower than the 2001 first quarter.
. Orders written of $184.1 million exceeded fourth quarter by 14 percent and
were within 3 percent of last year's first quarter.
. Cash flow remained strong.
. Six Sigma, global sourcing, and eBusiness initiatives remain on track.
. 2002 performance will depend on pace of new orders and the speed of the
economic recovery.
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"We are encouraged by our first quarter performance compared to the third and
fourth quarters of last year. While the economic conditions in our served
markets have not recovered to the year ago levels, the company was able to post
sequential improvement. The company-wide initiatives of Six Sigma, global
sourcing and eBusiness continue to build momentum. These initiatives plus the
2001 restructuring have positioned us well for the recovery, regardless of its
timing and speed."
Dennis K. Williams
Chairman, President and CEO
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IDEX Corporation
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Financial Highlights
(in millions, except per share amounts and percentages)
For the Quarter Ended
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March 31, December 31,
March 31, ---------------------- ---------------------
2002 2001 Change 2001 Change
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Orders Written $184.1 $189.7 (3)% $161.3 14%
Sales 174.9 187.4 (7) 168.8 4
Excluding Restructuring and Goodwill
--Operating Income 22.5 26.1 (14) 20.9 8
--Operating Margin 12.9% 13.9% (100)bp 12.4% 50bp
--EBITDA $30.4 $33.9 (10)% $27.7 10%
--Net Income 11.5 13.5 (15) 10.8 6
--Diluted EPS .37 .44 (16) .35 6
Orders, Sales & Profit Exceeded Fourth Quarter Results but Were Below Last
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Year's First Quarter
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Sales in the first quarter were $174.9 million, which represented a 4 percent
improvement from the fourth quarter of 2001. This was 7 percent lower than first
quarter 2001 performance, when stronger business conditions prevailed throughout
the manufacturing sector.
Compared with the first quarter last year, acquisitions accounted for a 2
percent sales improvement, which was offset by an 8 percent decline in base
business shipments and a 1 percent unfavorable currency translation effect.
International sales declined by 8 percent and domestic sales were 6 percent
lower. Sales to international customers were 40 percent of the total, down
slightly from 41 percent last year.
First quarter 2002 operating margins were 12.9 percent of sales. Compared on the
same accounting basis (excluding goodwill amortization in accordance with new
accounting rules effective January 1, 2002), margins, before restructuring
charges, showed a .5 percentage point improvement from the fourth quarter but
were 1.0 percentage point below last year's first quarter. These differences
were largely attributable to changes in sales volume versus the two prior-year
quarters.
Net income for the current quarter was $11.5 million. After adjusting prior-year
results to exclude restructuring charges and goodwill amortization, this
represents a 6 percent improvement from last year's fourth quarter but a 15
percent decline from the first. Comparing diluted earnings per share on this
same basis shows the current quarter's 37 cents exceeded the fourth quarter by 2
cents but was lower than last year by 7 cents. IDEX's first quarter diluted
earnings per share on an "as reported" basis was significantly better than last
year's first quarter of 23 cents and fourth quarter of 14 cents due to the
restructuring and goodwill expenses recorded in 2001.
New orders for the latest three months totaled $184.1 million, 14 percent
stronger than the fourth quarter of 2001 but 3 percent lower than the first
quarter of last year. Excluding the impact of foreign currency and the June 2001
Versa-Matic acquisition, orders were 4 percent lower than in the first quarter
of 2001. During the first quarter of this year, IDEX built $9.2 million of
backlog. At March 31, the company had a typical unfilled order backlog of
slightly over one month's sales.
For the quarter, the Pump Products Group contributed 58 percent of sales and 62
percent of operating income, the Dispensing Equipment Group accounted for 19
percent of sales and 16 percent of operating income, and the Other Engineered
Products Group represented 23 percent of sales and 22 percent of operating
income.
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IDEX Corporation
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Performance Improves From Fourth Quarter Levels
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Chairman, President and Chief Executive Officer Dennis K. Williams said, "While
not up to performance levels of a year ago, we are very encouraged by the
orders, sales and earnings improvements achieved in the first quarter 2002
versus last year's fourth quarter. The 14 percent increase in order activity -
from $161 million to $184 million - reflects a long overdue strengthening of
activity levels in the manufacturing sector. This improvement allowed us to
increase our backlog entering the second quarter, which should enhance our
performance this year. IDEX operates with a very small backlog of unfilled
orders, so changes in order activity very quickly have an impact on sales and
profitability."
Strong Financial Position
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IDEX ended the quarter with total assets of $839 million and working capital of
$131 million. Total debt decreased $16 million during the period. First quarter
free cash flow (cash flow from operations activities less capital expenditures)
was $19 million and 1.7 times net income. For the last 12 months, free cash flow
totaled $90 million and was nearly 1.8 times net income excluding restructuring
charges and goodwill amortization. Trailing 12-month EBITDA (earnings before
interest, taxes, depreciation and amortization) before the 2001 restructuring
charge totaled $126 million and covered interest expense by more than 6 times.
Debt to total capitalization at the end of the first quarter was 40 percent.
Progress Continues on Six Sigma, Global Sourcing and eBusiness Initiatives
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"We continue to drive our long-term initiatives aimed at creating top- and
bottom- line growth at IDEX," Williams said. "Three of the major efforts to
reach these goals are Six Sigma, global sourcing and eBusiness.
"Six Sigma is leading our businesses through process and product improvements
that benefit customers while enhancing IDEX's sales and profits," Williams
continued. "Our initial focus has been on improving on-time delivery and product
reliability. We are identifying the causes of defects, which create the gaps
between actual performance and what our customers want. Our businesses and
customers are seeing improvements in performance, and we are experiencing
operational and financial benefits from this important initiative. We expect
this effort will yield substantial improvements in 2002.
"Global sourcing also is a very high priority. It allows us to improve the
bottom line while offering products with the same or higher quality," Williams
added. "This program consolidates the buying power of all business units to
globally source aluminum, iron, steel and stainless steel castings, various
machined components, motors, printed circuit boards, and injection molded
plastic and elastomer components. Cross-functional business unit teams - with
expertise in purchasing, quality and engineering - are working with four
commodity leaders to coordinate technical requirements with our global
suppliers. We are seeing the benefits from these efforts, with savings of $1.9
million in the first quarter compared with $3.6 million for all of 2001. On
average, we are realizing material cost reductions of 40 percent for globally
sourced items. We believe these savings will continue to grow.
"eBusiness offers another important opportunity for substantial improvement at
IDEX. We are Web-enabling the functions our customers and channel partners want
most, which is helping to create a more efficient system that better serves our
end-user customers. Selected IDEX pump distributors went live on IDEXconnect.com
last September. Throughout 2002, we will continue to add functionality and
distributors. In addition, we will roll out the eBusiness platform for other
IDEX products to our OEMs, large end-users, and distributors," Williams
explained.
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IDEX Corporation
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2002 Results Depend on Pace of New Orders, Speed of Recovery
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Looking ahead, Williams said, "While it's clear that economic conditions have
improved from the second half of 2001, we must wait to see if the recovery
continues. As a short-cycle business, our financial performance depends on the
current pace of incoming orders, and we have very limited visibility of future
business conditions. We believe IDEX is well positioned for earnings improvement
as the economy strengthens. This is based on our lower cost structures resulting
from the 2001 restructuring; our margin improvement initiatives of Six Sigma,
global sourcing and eBusiness; and using our strong cash flow to cut debt and
interest expense. In addition, we continue to pursue acquisitions to drive the
company's longer-term profitable growth," Williams concluded.
Conference Call to be Broadcast Over the Internet
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IDEX will broadcast its first quarter conference call over the Internet on
Tuesday, April 16, at 1:30 p.m. CDT. Chairman, President and Chief Executive
Officer Dennis K. Williams, and Senior Vice President - Finance and Chief
Financial Officer Wayne P. Sayatovic 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 presentation, which will be
carried live on the Internet at its Web site at www.idexcorp.com. Access also is
available at www.ccbn.com by selecting "Investment Portals" then "Company
Boardroom," followed by entering the IDEX ticker symbol "IEX." Replays will be
available on both sites through April 30. Those who wish to listen should go to
either Web site 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, or download the correct applications at no
charge. Investors also will be able to hear a replay of the call through April
30 by dialing 800-891-8251 (or 402-220-6016 for international participants) and
using the passcode "IDEX."
About IDEX
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IDEX Corporation is a manufacturer of proprietary pumps and metering products,
dispensing equipment, and other engineered products. Its products are sold 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."
Cash Flow and Other Earnings Measurements
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EBITDA means earnings before interest, income taxes, depreciation and
amortization. EBITDA is commonly used as an analytical indicator of leverage
capacity and debt servicing ability. EBITDA should not be considered as an
alternative to net income, cash flows or any other items calculated in
accordance with U. S. generally accepted accounting principles or as an
indicator of our operating performance. The definition of EBITDA used here may
differ from the definition used by other companies.
Net earnings excluding restructuring charges per diluted share is commonly used
as an analytical indicator to compare operating results for various periods. It
should not be considered as an alternative to net earnings per diluted share
calculated in accordance with U.S. generally accepted accounting principles, or
as an indicator of IDEX's operating performance for a specific period.
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IDEX Corporation
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Forward-Looking Statements
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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. Such 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. Such 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
the September 11, 2001 terrorist attacks; 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
our results, particularly in light of the low levels of order backlogs we
typically maintain; our 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 we operate;
interest rates; utilization of our capacity and the effect of capacity
utilization 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 we undertake no obligation to publicly update
forward-looking statements to reflect subsequent events or circumstances. You
are cautioned not to rely unduly on such forward-looking statements when
evaluating the information presented here.
For further information on IDEX Corporation and its business units,
visit the company's Web site at www.idexcorp.com
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IDEX Corporation
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IDEX CORPORATION
Condensed Statements of Consolidated Operations
(in thousands except per share amounts)
First Quarter Ended
March 31,
2002 2001
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(unaudited)
Net sales $174,936 $187,395
Cost of sales 109,511 118,618
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Gross profit 65,425 68,777
Selling, general and administrative expenses 42,919 42,801
Goodwill amortization (Note 3) 3,479
Restructuring charge 5,661
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Operating income 22,506 16,836
Other income - net 203 226
Interest expense 4,670 5,403
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Income before income taxes 18,039 11,659
Provision for income taxes 6,494 4,430
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Net income $ 11,545 $ 7,229
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Basic Earnings Per Common Share $ 0.38 $ 0.24
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Diluted Earnings Per Common Share (Note 3) $ 0.37 $ 0.23
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Diluted Earnings Per Common Share Excluding
Goodwill and Trademark Amortization (Note 3) $ 0.37 $ 0.32
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Share Data:
Weighted average common shares outstanding 30,513 29,997
Weighted average common shares outstanding assuming full dilution 31,544 30,987
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Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2002 2001
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(unaudited)
Assets
Current assets
Cash and cash equivalents $ 6,721 $ 4,972
Receivables - net 97,598 93,053
Inventories 101,120 104,111
Other current assets 18,500 12,767
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Total current assets 223,939 214,903
Property, plant and equipment - net 136,894 144,146
Goodwill - net 453,343 454,560
Intangible assets - net 12,449 12,776
Other noncurrent assets 12,316 12,419
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Total $838,941 $838,804
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Liabilities and shareholders' equity
Trade accounts payable $ 46,238 $ 41,260
Dividends payable 4,326 4,303
Accrued expenses 42,148 41,775
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Total current liabilities 92,712 87,338
Long-term debt 275,619 291,820
Other noncurrent liabilities 59,431 58,534
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Total liabilities 427,762 437,692
Shareholders' equity 411,179 401,112
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Total $838,941 $838,804
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See following page for notes to condensed financial statements.
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IDEX CORPORATION
Company and Business Group Financial Information
(dollars in thousands)
First Quarter Ended
March 31,
2002 (1) 2001
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(unaudited)
Pump Products
Net sales $102,173 $109,742
Operating income (2) (4) 16,418 18,087
Operating margin (2) 16.1% 16.5%
Depreciation and amortization (2) $ 4,297 $ 4,311
Capital expenditures 1,945 2,627
Dispensing Equipment
Net sales $ 33,741 $ 35,834
Operating income (2) (4) 4,139 5,634
Operating margin (2) 12.3% 15.7%
Depreciation and amortization (2) $ 1,595 $ 1,424
Capital expenditures 916 1,112
Other Engineered Products
Net sales $ 40,364 $ 42,279
Operating income (2) (4) 5,655 6,781
Operating margin (2) 14.0% 16.0%
Depreciation and amortization (2) $ 1,265 $ 1,343
Capital expenditures 1,460 1,490
Company
Net sales $174,936 $187,395
Before restructuring charge, goodwill and trademark
amortization (2):
Operating income 22,506 26,079
Operating margin 12.9% 13.9%
Depreciation and amortization $ 7,705 $ 7,643
As reported:
Operating income 22,506 16,836
Operating margin 12.9% 9.0%
Depreciation and amortization (5) $ 7,705 $ 11,225
Capital expenditures 4,385 5,303
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(1) Includes acquisition of Versa-Matic Tool, Inc. (June 2001) in the Pump
Products Group.
(2) IDEX discontinued amortizing goodwill and trademark amortization as of
January 1, 2002, in accordance with SFAS No. 142 as further explained in
note 3 below. To facilitate comparison of segment operating results,
prior-period goodwill and trademark amortization now are treated as a
corporate rather than a segment cost and the information for 2001 was
reclassified accordingly.
(3) In July 2001, The Financial Accounting Standards Board issued SFAS No. 142,
"Goodwill and Other Intangible Assets." SFAS No. 142 establishes the
accounting and reporting standards for intangible assets and goodwill. It
requires that goodwill and certain intangible assets no longer be amortized
to earnings, but instead be reviewed periodically for impairment. IDEX
adopted SFAS No. 142 on January 1, 2002. After reviewing the estimated fair
market values, both in aggregate and at individual business units, IDEX
recorded no impairment to goodwill and other intangible assets on January
1, 2002. Had the new pronouncement been adopted on January 1, 2001, IDEX's
diluted earnings per share in the first quarter of 2001 would have
increased by $0.09 per share to $.32 per share. Further excluding the
restructuring charge in first quarter of 2001, IDEX's diluted earnings per
share in the quarter would have increased by another $.12 from $.32 to
$.44.
(4) Group operating income excludes net unallocated corporate operating
expenses and the restructuring charge in the first quarter 2001. The
restructuring charge of $5,661 was included with corporate and other and
was not assigned to the individual group segments. Had the Company
allocated the restructuring charge, it would have been assigned to the
groups as follows: Pump Products ($4,623), Dispensing Equipment ($592) and
Other Engineered Products ($446).
(5) Excludes amortization of debt issuance expenses.