1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- ------- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1997
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- ------- OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-10235
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IDEX Corporation
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(Exact name of registrant as specified in its charter)
Delaware 36-3555336
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State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
630 Dundee Road
Northbrook, Illinois 60062
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(Address of principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (847) 498-7070
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Former name, former address and former fiscal year, if changed since last
report.
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 X No
----- -----
Number of shares of common stock of IDEX Corporation ("IDEX" or the "Company")
outstanding as of April 29, 1997: 29,170,699 shares.
Documents Incorporated by Reference: None.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
IDEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)
March 31, December 31,
1997 1996
--------------- ------------
(unaudited)
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 4,220 $ 5,295
Receivables - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,483 91,200
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,158 97,516
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,984 4,835
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,010 2,324
-------- --------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 197,855 201,170
Property, plant and equipment - net . . . . . . . . . . . . . . . . . . . . . 99,491 102,383
Intangible assets - net . . . . . . . . . . . . . . . . . . . . . . . . . . . 267,663 274,511
Other non current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 6,889 5,709
-------- --------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $571,898 $583,773
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,026 $ 40,670
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,513 3,471
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,687 48,716
-------- --------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . 88,226 92,857
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256,286 271,709
Other non current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 24,475 23,698
-------- --------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 368,987 388,264
-------- --------
Shareholders' equity
Common stock, par value $.01 per share
Shares authorized
1997 and 1996 - 75,000,000
Shares issued and outstanding
1997 - 29,165,074; 1996 - 28,925,867 . . . . . . . . . . . . . . . . . 292 289
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . 89,091 89,657
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,120 105,238
Minimum pension liability adjustment . . . . . . . . . . . . . . . . . . . . (632)
Accumulated translation adjustment . . . . . . . . . . . . . . . . . . . . . (960) 325
-------- --------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . 202,911 195,509
-------- --------
Total liabilities and shareholders' equity . . . . . . . . . . . . . . . $571,898 $583,773
======== ========
________________________
See Notes to Consolidated Financial Statements
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IDEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(in thousands except per share amounts)
For the three months ended March 31, 1997 1996
-------- --------
(unaudited)
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $151,839 $133,886
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,928 82,222
-------- --------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,911 51,664
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . 30,739 27,016
Goodwill amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,910 1,232
-------- --------
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,262 23,416
Other income (expense) net . . . . . . . . . . . . . . . . . . . . . . . . . . (137) 43
-------- --------
Income before interest expense and income taxes . . . . . . . . . . . . . . . . 26,125 23,459
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,010 4,225
-------- --------
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 21,115 19,234
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 7,720 7,020
-------- --------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,395 $ 12,214
======== ========
Earnings per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .45 $ .41
======== ========
Weighted average common shares outstanding . . . . . . . . . . . . . . . . . . 29,809 29,726
======== ========
___________________
See Notes to Consolidated Financial Statements.
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IDEX CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY
(in thousands except per share amounts)
Minimum
Common Stock & Pension Accumulated Total
Additional Paid-In Retained Liability Translation Shareholders'
Capital Earnings Adjustment Adjustment Equity
------------------ -------- ---------- ------------ -------------
Balance, December 31, 1996....................... $ 89,946 $105,238 $ 325 $ 195,509
Issuance of 245,425 shares of common stock
from exercise of stock options net of stock
options surrendered.............................. (563) (563)
Minimum pension liability adjustment............. $ (632) (632)
Unrealized translation adjustment................ (1,285) (1,285)
Cash dividends declared on
common stock ($.12 per share).................... (3,513) (3,513)
Net income....................................... 13,395 13,395
------------------ -------- ---------- ------------ -------------
Balance, March 31, 1997 (unaudited).............. $ 89,383 $115,120 $ (632) $ (960) $ 202,911
================== ======== ========== ============ =============
____________________
See Notes to Consolidated Financial Statements.
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IDEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(in thousands)
For the three months ended March 31, 1997 1996
------- ---------
(unaudited)
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,395 $ 12,214
Adjustments to reconcile net income to net cash flows
from operating activities
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 4,192 3,486
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . 2,375 1,704
Amortization of debt issuance expenses . . . . . . . . . . . . . . . . . 162 150
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 2,102 399
(Increase) decrease in receivables . . . . . . . . . . . . . . . . . . . 717 ( 2,278)
Decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . 358 1,558
Increase (decrease) in trade accounts payable . . . . . . . . . . . . . . 1,356 ( 3,543)
Decrease in accrued expenses . . . . . . . . . . . . . . . . . . . . . . ( 5,979) ( 372)
Other transactions - net . . . . . . . . . . . . . . . . . . . . . . . . 2,142 ( 772)
------- ---------
Net cash flows from operating activities . . . . . . . . . . . . . . . . 20,820 12,546
------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment . . . . . . . . . . . . . . . . . ( 3,001) ( 2,689)
------- ---------
Net cash flows from investing activities . . . . . . . . . . . . . . . . ( 3,001) ( 2,689)
------- ---------
Cash flows from financing activities:
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 3,471) ( 3,061)
Net repayments under the credit agreements . . . . . . . . . . . . . . . . . ( 13,456) ( 3,268)
Decrease in accrued interest . . . . . . . . . . . . . . . . . . . . . . . . ( 1,967) ( 1,809)
------- ---------
Net cash flows from financing activities . . . . . . . . . . . . . . . . ( 18,894) ( 8,138)
------- ---------
Net increase (decrease) in cash . . . . . . . . . . . . . . . . . . . . . . . . ( 1,075) 1,719
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . 5,295 5,937
------- ---------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . $ 4,220 $ 7,656
======= =========
Supplemental Cash Flow Information
----------------------------------
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,816 $ 5,479
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,613 2,859
___________________
See Notes to Consolidated Financial Statements.
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IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Business
IDEX Corporation ("IDEX" or the "Company") is a manufacturer of a wide
array of proprietary, engineered industrial products sold to a diverse customer
base in a variety of industries in the U.S. and internationally. Its products
include industrial pumps and controls; fire-fighting pumps and rescue
equipment; dispensing and mixing equipment; stainless steel banding, clamping
and sign-mounting devices; sheet metal fabricating equipment and tooling;
automatic lubrication systems; small-horsepower compressors; and energy
absorption equipment. These activities are grouped into two business segments:
Fluid Handling and Industrial Products.
2. Significant Accounting Policies
In the opinion of management, the unaudited information presented as of
March 31, 1997 and for the three months ended March 31, 1997 and 1996 reflects
all adjustments necessary, which consist only of normal recurring adjustments,
for a fair presentation of the interim periods. Certain previously reported
amounts have been reclassified to conform to the current presentation format.
Earnings per common share (EPS) are computed by dividing net income by the
weighted average number of shares of common stock and common stock equivalents
outstanding during the period. Common stock equivalents, in the form of stock
options, have been included in the calculation of weighted average shares
outstanding using the treasury stock method. All share and per share data have
been restated for the three-for-two stock split effected in the form of a 50%
stock dividend in January 1997.
In February 1997 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," effective December 15, 1997 and superseding Accounting Principles Board
Opinion No. 15. This statement replaces primary EPS with basic EPS. Basic EPS
is computed by dividing net income by the weighted average number of shares of
common stock outstanding during the period. Diluted EPS, formerly fully
diluted EPS, must be presented in all cases with basic EPS. Had SFAS No. 128
been effective for the periods ending March 31, 1997 and 1996, EPS for the
Company would have been as follows:
1997 1996
---- ----
(unaudited)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,395 $ 12,214
Weighted average common shares outstanding . . . . . . . . . . 29,178 28,709
Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .46 $ .43
Weighted average common shares outstanding . . . . . . . . . . 29,178 28,709
Weighted average stock options outstanding . . . . . . . . . . 631 1,017
-------- ---------
Total weighted average shares outstanding . . . . . . . . . . . 29,809 29,726
Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . $ .45 $ .41
3. Inventories
The components of inventories as of March 31, 1997 and December 31, 1996
were (000's omitted):
March 31, December 31,
1997 1996
------------ ------------
(unaudited)
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,166 $ 18,351
Work in process . . . . . . . . . . . . . . . . . . . . . . . . 16,474 14,909
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . 62,518 64,256
------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 97,158 $ 97,516
======== ========
Those inventories which were carried on a LIFO basis amounted to $60,583
and $62,068 at March 31, 1997 and December 31, 1996, respectively. The excess
of current cost over LIFO inventory value and the impact on earnings of using
the LIFO method are not material.
4. Common and Preferred Stock
The Company had five million shares of preferred stock authorized but
unissued at March 31, 1997 and December 31, 1996.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Historical Overview and Outlook
IDEX sells a broad range of proprietary fluid handling and industrial
products to a diverse customer base in the U.S. and, to an increasing extent,
internationally. Accordingly, IDEX's businesses are affected by levels of
industrial activity and economic conditions in the U.S. and in other countries
where its products are sold and by the relationship of the U.S. dollar to other
currencies. Among the factors that affect the demand for IDEX's products are
interest rates, levels of capital spending in certain industries, and overall
industrial growth.
IDEX has a history of strong operating margins. The Company's operating
margins are impacted by, among other things, utilization of facilities as sales
volumes change, and inclusion of newly acquired businesses which may have lower
margins that could be further affected by purchase accounting adjustments.
IDEX's orders, sales, net income and earnings per share in the first
quarter of 1997 were the highest of any first quarter in its history. The
business pace has been steady at a high level. Incoming orders in the first
quarter were $159.2 million and exceeded shipments by $7.4 million. First
quarter orders increased by about 3% from the 1996 fourth quarter rate, and
excluding orders at Fluid Management, were equivalent to the first quarter 1996
rate. Order improvements over last year in the company's pump businesses were
offset by order declines in capital goods-related businesses. IDEX continues
to run with relatively low backlogs of unfilled orders.
The following forward-looking statements are qualified by the cautionary
statement under the Private Securities Litigation Reform Act set forth below.
IDEX continues to expect to set new records in sales, net income and earnings
per share in 1997, barring unforeseen circumstances. Activity levels in the
U.S. are expected to continue at a good rate, and IDEX's international focus,
the integration of its recent acquisitions, and its strong cash flow - which
will be used to cut debt and interest expense or to make acquisitions, are
among the factors that should contribute to growth in 1997 and beyond.
Cautionary Statement Under the Private Securities Litigation Reform Act
Demand for the Company's products is cyclical in nature and subject to
changes in general market conditions that affect demand. The Company's
customers operate primarily in industries that are rapidly impacted by changes
in economic conditions, which in turn can influence orders. The Company
operates without significant order backlogs. As a result, economic slowdowns
could quickly have an adverse effect on the Company's performance. In
addition, the Company's operating forecasts and budgets are based upon detailed
assumptions which it believes are reasonable, but inherent difficulties in
predicting the impact of certain factors may cause actual results to differ
materially from the forward- looking statements set forth in this discussion
and analysis section. These factors include but are not limited to the
following: the Company's utilization of its capacity and the impact of capacity
utilization on costs; developments with respect to contingencies such as
environmental matters and litigation; labor market conditions and raw materials
costs; levels of industrial activity and economic conditions in the U.S. and
other countries around the world; and levels of capital spending in certain
industries, all of which have a material influence on order rates; the
relationship of the U.S. dollar to other currencies; interest rates; the
Company's ability to integrate and operate acquired businesses on a profitable
basis; and other risks detailed from time to time in the Company's filings with
the Securities and Exchange Commission.
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Company and Business Group Financial Information
(000's omitted)
For the three months ended March 31, 1997 (1) 1996
------------ ------------
(unaudited)
Fluid Handling Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $117,699 $ 96,617
Income from operations (3) . . . . . . . . . . . . . . . . . . . . . . . 23,115 19,793
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.6% 20.5%
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . $ 5,608 $ 4,303
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . 2,269 1,330
Industrial Products Group
Net sales (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,225 $ 37,328
Income from operations (3) . . . . . . . . . . . . . . . . . . . . . . . 5,568 5,880
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.3% 15.8%
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . $ 914 $ 851
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . 727 1,340
Company
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $151,839 $133,886
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . 26,262 23,416
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.3% 17.5%
Depreciation and amortization (4) . . . . . . . . . . . . . . . . . . . . $ 6,567 $ 5,190
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . 3,001 2,689
(1) Includes acquisition of Fluid Management (July 29, 1996) in the
Fluid Handling Group.
(2) Group net sales include intersegment sales.
(3) Group income from operations excludes net unallocated corporate
operating expenses.
(4) Excludes amortization of debt issuance expenses.
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Results of Operations
For purposes of this discussion and analysis section, reference is made to
the table on the preceding page and the Company's Statements of Consolidated
Operations included in the Financial Statements section. IDEX consists of two
business segments: Fluid Handling and Industrial Products.
Performance in the Three Months Ended March 31, 1997 Compared to 1996
Net sales for the three months ended March 31, 1997 of $151.8 million
increased by 13% over $133.9 million in the same period last year. The sales
increase was due to the inclusion of Fluid Management (acquired in July 1996)
in this year's results. Net income of $13.4 million in the first quarter of
1997 rose by 10% over the $12.2 million in 1996's first quarter. Earnings per
share of $.45 in this year's first quarter rose by 10% over the $.41 earned in
last year's first three months.
In the first quarter of 1997, the Fluid Handling Group generated 77% of
sales and 81% of profits, and the Industrial Products Group contributed 23% of
sales and 19% of profits. International sales accounted for 39% of total sales
in the first three months of 1997, versus 38% in the same period of 1996.
Fluid Handling Group sales of $117.7 million increased by $21.1 million,
or 22%, due to the inclusion of the recently acquired Fluid Management
operation in this year's first quarter results. Sales outside the U.S.
increased to 39% of total Fluid Handling Group sales in the first quarter of
1997 from 38% in the comparable 1996 period. Sales of $34.2 million in the
Industrial Products Group in the first three months of 1997 decreased $3.1
million or 8%, from $37.3 million recorded in the same quarter of last year
due to lower activity levels in the capital goods-related businesses.
Shipments outside the U.S. were 38% of total sales in the Industrial Products
Group in the first quarter of 1997, up from 37% in the comparable 1996 period.
Gross profit of $58.9 million in the first quarter of 1997 increased $7.2
million, or 14%, from the comparable period of 1996. Gross profit as a percent
to sales was 38.8% in the 1997 period, up slightly from 38.6% in last year's
first quarter. Selling, general and administrative (SG & A) expenses of $30.7
million in 1997's first quarter increased 14% from $27.0 million in the first
three months of 1996. As a percentage of sales, these expenses were unchanged
at 20.2% in both periods. Goodwill amortization increased 55% to $1.9 million
in the first three months of 1997 from $1.2 million in the comparable prior
year period and as a percent of sales, increased to 1.3% from .9%. The year
over year increases in gross profit, SG & A expenses and goodwill amortization
were largely attributable to the inclusion of Fluid Management which was
acquired in July 1996.
Income from operations increased $2.9 million, or 12%, to $26.3 million in
the three months ended March 31, 1997, from $23.4 million in 1996's first
quarter. Overall operating margins remained very healthy at 17.3% of sales and
were close to the 17.5% margins recorded in the first quarter of 1996.
While first quarter 1997 operating margins in IDEX's base Fluid Handling
businesses improved somewhat over the first quarter of last year, including
Fluid Management in this year's results caused operating margins for the group
to slip slightly from 20.5% last year to 19.6% this year. Industrial Products
margins improved from 15.8% last year to 16.3% this year.
Interest expense increased to $5.0 million in the first quarter of 1997
from $4.2 million in the same period of 1996 because of additional borrowings
under the U.S. credit agreement to complete the July 1996 acquisition of Fluid
Management.
The provision for income taxes increased to $7.7 million in the three
months ended March 31, 1997, from $7.0 million in the comparable 1996 period.
The effective tax rate was essentially unchanged at 36.6% in the 1997 period
compared to 36.5% in 1996's first quarter.
Net income of $13.4 million in the first quarter of 1997 was 10% higher
than net income of $12.2 million in same period of 1996. Earnings per share
amounted to $.45 in 1997's first quarter, which was 10% higher than the $.41
recorded in the first quarter of 1996.
All share and per share data have been restated to reflect the
three-for-two stock split effected in the form of a 50% stock dividend paid on
January 31, 1997.
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Liquidity and Capital Resources
At March 31, 1997, IDEX's working capital was $110 million and its current
ratio was 2.2 to 1. Internally generated funds were adequate to fund capital
expenditures of $3.0 million and $2.7 million, and dividends on common stock of
$3.5 million and $3.1 million, for the three months ended March 31, 1997 and
1996, respectively. The capital expenditures were generally for machinery and
equipment which improved productivity, although a portion was for repair and
replacement of equipment and facilities. Management believes that IDEX has
ample capacity in its plant and equipment to meet any intermediate term needs
for future growth as well as expected needs in the long term. During the three
months ended March 31, 1997 and 1996, depreciation and amortization expense,
excluding amortization of debt issuance expenses, was $6.6 million and $5.2
million, respectively.
At March 31, 1997, the maximum amount available under the multi-currency
amended U.S. credit agreement was $250 million, of which $148.5 million was
borrowed, including a Netherlands guilder borrowing of 82.0 million ($43.5
million) which provides an economic hedge against the net investment in Fluid
Management's Netherlands operation. The availability under this facility
declines in stages commencing July 1, 1999, to $200 million on July 1, 2000.
Any amount outstanding at July 1, 2001 becomes due at that date. Interest is
payable quarterly on the outstanding balance at the bank agent's reference rate
or at LIBOR plus an applicable margin. At March 31, 1997, the applicable
margin was 50 basis points. The Company also has a $10 million demand line of
credit available for short-term borrowing requirements at the bank agent's
reference rate or at an optional rate based on the bank's cost of funds. At
March 31, 1997, there was $1.0 million borrowed under this short-term line of
credit.
At March 31, 1997, the maximum amount available under the German credit
agreement was DM 52.5 million ($31.1 million), of which DM 50.0 ($29.6 million)
was being used. The borrowing provides an economic hedge against the net
investment in the Lukas operation. The availability under this agreement
declines in stages commencing November 1, 1997, to DM 31.3 million at November
1, 2000. Any amount outstanding at November 1, 2001, becomes due at that date.
Interest is payable quarterly on the outstanding balance at LIBOR plus 100
basis points.
IDEX believes it will generate sufficient cash flow from operations in
1997 to meet its operating requirements, interest and scheduled amortization
payments under both the amended U.S. credit agreement and the German credit
agreement, interest and principal payments on the Senior Subordinated Notes,
approximately $20 million of planned capital expenditures and approximately $14
million of annual dividend payments to holders of common stock. From
commencement of operations in January 1988 until March 31, 1997, IDEX has
borrowed $410 million under the credit agreements to complete 10 acquisitions.
During this same period, IDEX generated, principally from operations, cash flow
of $320 million to reduce its indebtedness. In the event that suitable
businesses or assets are available for acquisition by IDEX upon terms
acceptable to the Board of Directors, IDEX may obtain all or a portion of the
financing for the acquisitions through the incurrence of additional long-term
indebtedness.
On April 4, 1997, IDEX acquired Terry Harrison Holdings, Ltd. of
Washington, Tyne & Wear, England. This company, with annual sales in the $8
million range, produces Blagdon air-operated diaphragm pumps. The business
will continue to produce and sell products from its U.K. location under the
Blagdon name but will be operated as a part of IDEX's Warren Rupp business
unit. The acquisition, which is not material to IDEX, will be accounted for
using the purchase method of accounting and has been financed through a
borrowing under the amended U.S. credit agreement and the issuance of loan
notes to the sellers.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities. Not Applicable.
Item 3. Defaults upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed in the accompanying "Exhibit Index" are
filed as part of this report.
(b) Reports on Form 8-K
There have been no reports on Form 8-K filed during the
quarter for which this report is filed.
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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 in the capacity and on the date
indicated.
IDEX CORPORATION
May 9, 1997 /s/Wayne P. Sayatovic
------------------------------
Wayne P. Sayatovic
Senior Vice President -
Finance, Chief Financial
Officer and Secretary
(Duly Authorized and Principal
Financial Officer)
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EXHIBIT INDEX
Exhibit
Number Description Page
- ------ ----------- ----
3.1 Restated Certificate of Incorporation of IDEX (formerly HI, Inc.)
(incorporated by reference to Exhibit No. 3.1 to the Registration Statement
on Form S-1 of IDEX Corporation, et al., Registration No. 33-21205, as
filed on April 21, 1988).
3.1(a) Amendment to Restated Certificate of Incorporation of IDEX (formerly HI, Inc.),
as amended (incorporated by reference to Exhibit No. 3.1(a) to the Quarterly Report
of IDEX on Form 10-Q for the quarter ended March 31, 1997, Commission File No.
1-10235).
3.2 Amended and Restated By-Laws of IDEX (incorporated by reference to Exhibit
No. 3.2 to Post-Effective Amendment No. 2 to the Registration Statement on
Form S-1 of IDEX Corporation, et al., Registration No. 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 (incorporated by reference to Exhibit No. 3.2(a) to Post-Effective
Amendment No. 3 to the Registration Statement on Form S-1 of IDEX Corporation,
et al., Registration No. 33-21205, as filed on February 12, 1990).
4.1 Restated Certificate of Incorporation and By-Laws of IDEX (filed as Exhibits No. 3.1
through No. 3.2(a)).
4.2 Indenture, dated as of September 15, 1992, among IDEX, the Subsidiaries and
Fleet National Bank of Connecticut, as Trustee, relating to the 9-3/4% Senior
Subordinated Notes of IDEX due 2002 (incorporated by reference to Exhibit No. 4.2
to the Annual Report of IDEX on Form 10-K for the year ending December 31, 1992,
Commission File No. 1-10235).
4.2(a) First Supplemental Indenture dated as of December 22, 1995, among IDEX and the
Subsidiaries named therein and Fleet National Bank of Connecticut, a national
banking association, as trustee (incorporated by reference to Exhibit No. 4.2(a) to
to the Annual Report of IDEX on Form 10-K for the year ending December 31, 1995,
Commission File No. 1-10235).
4.2(b) Second Supplemental Indenture dated as of July 29, 1996, among IDEX and the
Subsidiaries named therein and Fleet National Bank of Connecticut, a national
banking association, as trustee (incorporated by reference to Exhibit No. 4.2(b) to
the Quarterly Report of IDEX on Form 10-Q for the quarter ended June 30, 1996,
Commission File No. 1-10235).
4.3 Specimen Senior Subordinated Note of IDEX (including specimen Guarantee)
(incorporated by reference to Exhibit No. 4.3 to the Annual Report of IDEX on
Form 10-K for the year ending December 31, 1992, Commission File No.1-10235).
4.4 Specimen Certificate of Common Stock (incorporated by reference to Exhibit
No. 4.3 to the Registration Statement on Form S-2 of IDEX Corporation, et al.,
Registration No. 33-42208, as filed on September 16, 1991).
4.5 Third Amended and Restated Credit Agreement dated as of July 17, 1996, among
IDEX, Bank of America Illinois, as Agent, and other financial institutions named
therein (incorporated by reference to Exhibit No. 4.5 to the Quarterly Report of
IDEX on Form 10-Q for the quarter ended June 30, 1996, Commission File No. 1-10235).
*4.5(a) First Amendment to the Third Amended and Restated Credit Agreement dated as of
April 15, 1997, among IDEX, Bank of America Illinois, as Agent, and other financial institutions
named therein.
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Exhibit
Number Description Page
------ ----------- ----
4.6 Amended and Restated Pledge Agreement dated as of July 17, 1996, by IDEX in
in favor of the Agent and Banks (incorporated by reference to Exhibit No. 4.6
to the Quarterly Report of IDEX on Form 10-Q for the quarter ended June 30, 1996,
Commission File No. 1-10235).
4.6(a) Supplement No. 1 to the Amended and Restated Pledge Agreement dated as of
August 5, 1996, by IDEX in favor of the Agent and Banks (incorporated by
reference to Exhibit No. 4.6(a) to the Quarterly Report of IDEX on Form 10-Q
for the quarter ended June 30, 1996, Commission File No. 1-10235).
4.7 Amended and Restated Subsidiary Guaranty Agreement dated as of July 17, 1996,
by the Subsidiaries named therein in favor of the Agent and Banks
(incorporated by reference to Exhibit No. 4.7 to the Quarterly Report of IDEX
on Form 10-Q for the quarter ended June 30, 1996, Commission File No. 1-10235).
4.7(a) Supplement No. 1 to the Amended and Restated Subsidiary Guaranty Agreement
dated as of August 5, 1996, by FMI Management Company in favor of the Agent
and Banks (incorporated by reference to Exhibit No. 4.7(a) to the Quarterly
Report of IDEX on Form 10-Q for the quarter ended June 30, 1996,
Commission File No. 1-10235).
4.7(b) Supplement No. 2 to the Amended and Restated Subsidiary Guaranty Agreement
dated as of August 5, 1996, by Fluid Management, Inc. in favor of the Agent
and Banks (incorporated by reference to Exhibit No. 4.7(b) to the Quarterly Report
of IDEX on Form 10-Q for the quarter ended June 30, 1996, Commission File
No. 1-10235).
4.8 Registration Rights Agreement dated as of July 26, 1996, between IDEX and
Mitchell H. Saranow (incorporated by reference to Exhibit No. 4.8 to the
Quarterly Report of IDEX on Form 10-Q for the quarter ended June 30, 1996,
Commission File No. 1-10235).
*10.1 Amended and Restated Employment Agreement between IDEX Corporation and
** Donald N. Boyce, dated as of November 22, 1996.
*10.2 Amended and Restated Employment Agreement between IDEX Corporation and
** Wayne P. Sayatovic, dated as of November 22, 1996.
*10.3 Amended and Restated Employment Agreement between IDEX Corporation and
** Frank J. Hansen, dated as of November 22, 1996.
*10.4 Amended and Restated Employment Agreement between IDEX Corporation and
** Jerry N. Derck, dated as of November 22, 1996.
**10.5 Management Incentive Compensation Plan (incorporated by reference to Exhibit
No. 10.21 to Amendment No. 1 to the Registration Statement on Form S-1 of
of IDEX Corporation, Registration No. 33-28317, as filed on June 1, 1989).
**10.5(a) Amended Management Incentive Compensation Plan (incorporated by
reference to Exhibit No. 10.9(a) to the Quarterly Report of IDEX on
Form 10-Q for the quarter ended March 31, 1996, Commission File No. 1-10235).
**10.6 Form of Indemnification Agreement (incorporated by reference to Exhibit No.
10.23 to the Registration Statement on Form S-1 of IDEX Corporation, Registration
No. 33-28317, as filed on April 26, 1989).
**10.7 Form of Shareholder Purchase and Sale Agreement (incorporated by reference to
Exhibit No. 10.24 to Amendment No. 1 to the Registration Statement on Form S-1 of
IDEX Corporation, Registration No. 33-28317, as filed on June 1, 1989).
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Exhibit
Number Description Page
------ ----------- ----
**10.8 Revised Form of IDEX Corporation Stock Option Plan for Outside Directors
(incorporated by reference to Exhibit No. 10.22 to Post-Effective Amendment
No. 4 to the Registration Statement on Form S-1 of IDEX Corporation, et al.,
Registration No. 33-21205, as filed on March 2, 1990).
**10.9 Amendment to the IDEX Corporation Stock Option Plan for Outside Directors
adopted by resolution to the Board of Directors dated as of January 28, 1992
(incorporated by reference to Exhibit No. 10.21(a) of the Annual Report of IDEX
on Form 10-K for the year ended December 31, 1992, Commission File
No. 1-10235).
**10.10 Non-Qualified Stock Option Plan for Non-Officer Key Employees of IDEX
Corporation (incorporated by reference to Exhibit No. 10.15 to the Annual Report
of IDEX on Form 10-K for the year ended December 31, 1992, Commission
File No. 1-102351).
**10.10(a) 1996 Stock Plan for Non-Officer Key Employees of IDEX Corporation
(incorporated by reference to Exhibit No. 4.5 to the Registration Statement on
Form S-8 of IDEX, Registration No. 333-18643, as filed on December 23, 1996).
**10.11 Non-Qualified Stock Option Plan for Officers of IDEX Corporation (incorporated
by reference to Exhibit No. 10.16 to the Annual Report of IDEX on Form 10-K
for the year ended December 31, 1992, Commission File No. 1-102351).
**10.12 IDEX Corporation Supplemental Executive Retirement Plan (incorporated
by reference to Exhibit No. 10.17 to the Annual Report of IDEX on Form 10-K
for the year ended December 31, 1992, Commission File No. 1-102351).
**10.13 1996 Stock Plan for Officers of IDEX (incorporated by reference to Exhibit
No. 4.4 to the Registration Statement on Form S-8 of IDEX, Registration
No. 333-18643, as filed on December 23, 1996).
**10.14 Amended and Restated IDEX Corporation Directors Deferred Compensation Plan,
as amended (incorporated by reference to Exhibit No. 4.6 to the Registration
Statement on Form S-8 of IDEX, Registration No. 333-18643, as filed on
December 23, 1996).
**10.15 IDEX Corporation 1996 Deferred Compensation Plan for Officers, as amended
(incorporated by reference to Exhibit No. 4.8 to the Registration Statement on
Form S-8 of IDEX, Registration No. 333-18643, as filed on December 23, 1996).
**10.16 IDEX Corporation 1996 Deferred Compensation Plan for Non-Officer Presidents,
as amended (incorporated by reference to Exhibit No. 4.7 to the Registration Statement
on Form S-8 of IDEX, Registration No. 333-18643, as filed on December 23, 1996).
10.17 Asset Purchase Agreement dated July 26, 1996 between Idex and
Fluid Management Limited Partnership, Fluid Management U.S.,
L.L.C., Fluid Management Service, Inc., Fluid Management Canada,
LLC, Fluid Management France, SNC, FM International, Inc., Fluid
Management Europe B.U. (incorporated by reference to Exhibit No.
2.1 to the Quarterly Report of IDEX on Form 10-Q for the Quarter
ended June 30, 1996, Commission File No. 1-10235).
*27 Financial Data Schedule.
Revolving Credit Facility, dated as of September 29, 1995, between Dunja
Verwaltungsgesellschaft GmbH and Bank of America NT & SA, Frankfurt
Branch (a copy of the agreement will be furnished to the Commission upon request).
______________________
*Filed herewith.
**Management contract or compensatory plan or arrangement.
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