IEX - Earnings call transcript Q1 2021

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Operator

Greetings, and welcome to the IDEX Corporation First Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Yates, Vice President and Chief Accounting Officer. Thank you, you may begin.

Michael Yates

Thank you. everyone. morning, Good Yates, IDEX Mike and Accounting Chief This Vice for Corporation. Officer is President

operating website be slides XXXX. used to start you XXXX press performance Let during months for saying and press at by me accessed thank along company’s our release, today’s of XX, night, issued the financial IDEX release Last outlining a for the March X first can highlights. quarter financial on be company’s we a our discussion us with www.idexcorp.com. for webcast, ending The the presentation joining

activity Joining the outlook the Executive on then will Bill Financial market. overview we me results and update Grogan, an of our update and XXXX. order provide quarter state financial of today and will for today Officer. is and outlook Chief follows: of performance Eric XXXX as begin for and Ashleman, our an business our with second call our our our M&A our is quarter and Officer; full end Chief year Eric discuss The providing first for format overview our our Bill an on

inclusion Finally, with diversity, and on an programs. our Eric equity sustainability, update conclude will

IDEX’s call prepared language in our call a last night’s for call Ashleman. Following open with over to CEO, turn that, the release we Harbor Securities Safe filings forward-looking in I’ll subject the Commission. the contain With to questions. will remarks, statements Before our certain brief [Operator Instructions] we may and your this the now begin, reminder, that Eric Exchange and are press

Eric Ashleman

don’t any imagined extremely proud across teams achieved of our us ago. this IDEX the year of together. when being a again, the point at be we’ve have Once viewing state world should Mike. you, Thank would the results think of I the

continues of array serve businesses diverse high-performing as well. to Our

most steadily at seeing point. markets or either recovered improving our largely of end We’re this

than and We be expect we continue days ago. quarter fourth in experienced stronger XXXX our momentum to expectations the to the build XX on

tremendous a are our made has recovery, we’re areas keeping eye progress close been there Although, in on. still some

societal quarter without past on from lockdowns rapidly materials economic we larger to smooth protocols not from This changing to in larger to demand logistics Customers and see far and Our rates The sporadic to the quarter. has the employee safety I’m but deployment. teams not lockdowns businesses. was as every impact in that, and to the trying these to conditions are with fully that pandemic In team now the surge off. of Pivoting remarkable tough to Europe are has COVID. vaccination have hurdles for industrial operational now. of the accelerated, us but capacity in the still staffing in of past moving moment day the sailing. variants In in many proud had The was situation this investments. a call That’s continues our have of variety where forward. are our challenges. more that shortages challenges efforts are months much balance want pay and confident States, to a their sector serious of all our Recognizing their yet of China, widely outlook, continuing many projects vary for around thank IDEX virus The United been issue, our the we navigated a world. excellence normal UK The late. and life I has capital rate reminds successfully for India, and to results. and been on that make hurdles parts achieve

build a external on further capabilities. expand Airtech development and roles. towards a the focus, we detail recently we transaction of acquisition have on moment, strategy most IDEX. off into our engaged Pumps resources some of allocated momentum covered announcement ability ABEL note. the night in started new integrate companies and this of talented And we as And and in business XXXX closure the last quarter we’ll in the to invest With this more identify, win expertise assess, successfully M&A We strong our to

with acquire Our is and around most both value funnel for teams We more opportunities for of expanding will within established well we look our drive deal the as positions the IDEX as competition. think as that our that market moats businesses, style fit the new best to widen shareholders. organizations of customers the niches capabilities deepen and

financial efforts. resources towards to We deploy significant are to these fortunate have

acquire we Yesterday, X. air Slide $XXX for that valves, regenerative to pneumatic engineers compressors blowers, Airtech group to from announced intent performance Vacuum manufacturer’s our on Airtech Moving million. EagleTree Capital high vacuum including acquired tax and benefits. is $XX XXXX. XXx in XX’s of with the in margin revenue deal and million EBITDA range a deal Airtech pumps. mid had a trailing It XXx

gas the compliment fractional manufacturing, which air include systems the produces solutions compressors, by IDEX and businesses, products moving horsepower and Within air vacuum upon pumps, of family air motors provided that systems. and they tank expand

much solutions within product there a we anticipate to but create segment. in in Science separate synergies will our they within shared quarter leading which is IDEX, million with overlaps innovation. some lines of to will will then from businesses Technology techs While each remain be their platform This expect the provide, the company expertise further complimentary. $XXX collaboration They deal, pneumatics and close Health we second and

the positive in I’ll also all business Turning prior quarter the orders to quarter trends XXXX and in of orders details approaching in first X. million commercial of Organic both more go levels. allowing of time The were versus $XX quarter, are or on exceeded Slide Most continued us to into QX the compared XXXX. backlog us. minute. for to order build and units organically in sequentially an year first our up QX our the momentum results in quarter. a X% pre-pandemic high at of were

with science delivered and segments, fluid and metering fire technologies and products lagging. diversified technology safety slightly growth across health organic look As order and our we strong

rates growth HST FSDP naturally level and off. began to in As

half the We markets strength industrial in resilience additional our the cautiously underlying highlight of our Slide the return the businesses we energy of year. to provide will of the rebound growth X, drive set, provide of recovery. customers. importance a the and the we we critical for about markets. the markets commercial level expect through velocity and of and On second project-based end year To solutions our These deeper FMT of primary the results in state entered outlook the the the our and businesses of pandemic our bullish

to year aggressively pursue to rate to diversified continued and began out Our portfolio accelerate drive leverage to businesses our pandemic. into day coming growth the coming opportunities organic the we of

fully against We are of the year. recovered our of now markets markets to and measuring pre-pandemic the our on our of majority have fully the track markets levels. have are Many recovered end their by

but not increase of mentioned rates about segment, out are In supply woods yet, even our end in our certain the disruptions geographies, chain of with the I throughout Fluid concern the we earlier, that As day continue to industrial we’re and around Technology outlook markets. optimistic quarter. pockets COVID in Metering

back and XXXX markets sentiment customer we CapEx projects are full mentioned, not strong. large trending towards outsize Agriculture recovery but industrial remains growth we levels. to of see recovery As underlying continues resume, in the at crop I’ve a prices drive state until be will as

business is Water stable. Our

tailwinds might from this impact subsequent as any assess levels Energy to that bill. as well primarily out infrastructure to of the pandemic, continue funding capital markets lag municipal due sector. to in come continue limited We XXXX an investment

outperform, growth many experienced driving Health almost Moving our share continued solid to we Technologies The won across Science and new market food we performance. with our faces of strong to offerings. have segment, but the and several by differentiated and driven technology challenges, market a automotive markets. Semicon and platforms our pharma overall winning all

States for the lacking. see life Our as a the markets are FMT. projects the AI industrial improving this around year. the in has One segment offset for Day will the The risk. result able most do of specifically within taking, do the to that COVID seeing of of the opportunities to businesses end last impact the testing. item segment HST, with have on improved. rates are volumes and the The product risk we about believe rebound, receive approval, that similar segment we to is application strength impact be this been of talking the rest yet will FDA pandemic which science United We are in

tenders. delaying Most Finally, in and optimistic In capital been as The at market. demand coupled BAND-IT continues improved free been budget impact new in driven we our dispensing its automotive has businesses recovery for municipal budgets through our have Products exposures market FSD pent-up segment Europe increased like rebound Fire the in Fire Safety/Diversified from with the platform & especially wins in assess auto we retailers continue of & equipment. India, and large by spending. released infrastructure as not work HST, an to has headwinds, our U.S. are about better, and Rescue, up

category applications & industrial exposure, in lagging Fire other primarily some is in energy The with BAND-ITs and along FSD aerospace Rescue.

and and to our closely it these full ensuring in back factors, on to year. confident supply of to outlook focused that, in are over financial of issues With continue create organic chain global half to the year. We conditions turn choppiness I raise monitor are our growth would stability chain, threatened to we year. for market the Despite persistence Bill enough the the for supply results our our discuss as quarter expectations in like to the

Bill Grogan

on of we highlighted were each in and our Eric as Thanks, Organic prior overall start orders sequentially in Eric. consolidated grew with quarter. I’ll year-over-year XX% the orders our $XX million XX. as on slide. up $XXX segments of X% QX financial of million backlog and organically, by up the built Slide results

points inventory inventory up related impact and primarily sprayer expected. reserves sales dispensing quarter. up units across XX% one-time business overall our was year-over-year. by the XX our We First mix highlights the electrostatic sequentially. pharma pandemic growth now driven were all Strength with million basis our it over associated and with step-up with food acquisitions, associated rate and dilutive decrease XX% we were QX X% reserves. basis but XX.X%, points notable to quarter ABEL, organically. year-over-year at was gross the experienced The in of contracted The increasing Semicon, the in and of inventory XXX $XXX margin segments were materializing of businesses

in reserves, flat the been would year. acquisitions inventory gross to prior margin have Excluding

just up First compared the impact prior of slide. will pressure year margin up basis last to by I of points quarter cost operating actions the margin volume XX I points increased the by mentioned. and driven margin was on operating XX.X%, year, discuss year. income XX.X%, offset to compared XX basis taken the in was the following detail more operating last Adjusted drivers gross

XX%, due the of XX.X%, a share-based effective the headwind tax was This benefits a from compensation. quarter. which the decrease tax than QX in prior to drove for ETR rate higher Our EPS was year $X.XX on excess

of resulting quarter First adjusted EPS or was year. prior income million over in net $X.XX XX% $X.XX, up $XXX adjusted

Excluding adjusted the would $X.XX tax been XX%. headwind, $X.XX up or have EPS

Finally, net free compared of by XX% and cash for was our and million, year earnings was strong up flow The $XX impact working higher performance to capital driven quarter XX% of the was the prior continued adjusted income. initiatives.

improving we increased $XX year. Eric discretionary we XX, year. we Moving We quarter were pace the the cautiously operating million and for controls, in optimistic growth that conditions XXXX. income structurally cost as knew the mentioned, to place positioned on well from of Adjusted quarter compared advantage market the to about actions take coming prior the to last of into entered put Slide

million mix, the then to our Flow-through impact last acquisitions negatively slide growth at on million $X price, productivity, accounting $X controls million and partially through and rate. reserve, reported inventory negative flowing $X net flow-through cost the and $X X% The of gross by of charge to After the I is extremely at our we XX%. million discussed of offset a inflation. dilutive Our margin flow-through prior by of XX%. FX, million contributed strong were year discretionary previous from $XX getting contributed approximately the organic impacted organic impact for related was able to

flow-through and year we drive expect XX. in to We’ve second expect for in and that, organic organic initiatives both Slide like we the would in started on those when provide costs quarter outlook prior highlighted reinvest I’m associated our will an opportunities. and As to already update investments our the business With I quarters. to on full the subsequent XXXX. these calls, aggressively reduce inorganic

For projecting XX%, $X.XX to of the $X.XX organic EPS growth revenue are XX.X%. to second quarter, with and margins XX% we of from operating approximately to range

benefit the investments from the expected and discussed XX% tax a with second be second $XX the by top million X% about around be of impact in rate expected Corporate the The increase, primarily M&A to earlier. quarter costs we effective to is driven quarter line expect we FX.

guidance $X.XX we Turning outlook, $X.XX increasing to from full to $X.XX, the year EPS $X.XX. to full-year are our up to

also organic from growth year are full X% our X% up We X% to to revenue increasing to XX%.

expect of XX.X%. approximately margins We operating

provide to FX results. line expect a X% to We benefit top

full year XXX% $XX expected $XX tax are million. Our is year. XX%. around income full to is to be net of be expected expenditures XXX% flow anticipated around be corporate are costs to now effective rate to the be to Free cash and approximately expected million for Capital

in estimates. guidance included closed these costs future with or these the our quarter. any Finally, charges. included with Pumps excludes deal in acquisitions is is the now associated earnings ABEL restructuring earnings first not or Airtech in estimates

With throw to deal our We will final a for closes. Eric once thoughts. some I’ll that, back guidance update it accordingly

Eric Ashleman

Slide Thanks, the Bill. on I’m final XX. slide,

for open standards our the sector second call culture. responsibility first recently update ESG share Board known We adopt Accounting report. journey to report also Sustainable our Before of questions, published SASB. I’d the evolution on to is an Standards like we our our corporate This the company and social

anonymous increased team hard to and Denise her health key for work safety, our efforts light. thank diversity, impact. cross-functional and environmental outstanding Diversity I this and Counsel to and their General our including opportunity culture. areas, to our disclosures focus our would to like Cade, We commitments to bring have from in met, Since take for company. with and of from continues which able outside groups we’re the conducted around be more evolving point developing world, goals an employees inclusion facilitator emphasis equity we to learned last begin we a company in the targeted

training We are understand issues. fostering for all these them important leaders dialogue sessions comfortable, to and planning on currently help become

including talent assessing ensure talent our of We use processes, new bias. our of IDEX consideration a we are processes a through existing suppliers. and unconscious to decentralized practice company And purchasing talent our recruiting management expand businesses. to are are from addressing our of help our assessment collection free diverse of with our diverse is

of superior and economic Our solving upon making problem the at closest our customers. decision impact, to depends model point

to essential areas this questions. component next operator the work collective me our growth. for outlined business report and important over Our that, this of it within With your phase in let an is pause of turn

Operator

W. of Instructions] Thank from you. first Halloran with Baird. your comes Mike proceed Our Please [Operator question. question line the with Robert

Mike Halloran

everyone. morning, Good

talk about what’s in just let’s strong here, guidance really obviously, embedded quarter. So first

from where first quarter Second guide the between seems little expectations. a prior back relative the the maybe second uptick and guidance quarter, movement year half comes the to in less the and of

year want mentioned kind is of And cautiously the through make just to thinking some puts just back about, those year. to you’re what and you the the I want striking have is? about viewing in all recovery? move things that half of you’re what How the takes How and you’re optimistic true balanced. what because of the just obviously, tone as much I trajectory So understand, the is thinking the – you’re of are sure

Eric Ashleman

to in high quarter Texas And the Christmas. February, our the for over Terrible had now story, point look, Yes. we that’s I it’s chapters in mean, got about. that’s as supply Well, coming and thanks, weather lie opening then it’s whether I in Mike. – of out this be which shutdowns, stuff as we’ve over said, I is an there. think kind broad-based momentum, that we comments got the mean, little of us. it’s a these it, interesting which go. mean, always going second that feel IDEX I lays really chain story And good I time,

see seasonally projects we the our the momentum typically feel we’ve on nicely adjusted seasonal that we think a around of I We quarter. but still – are of we’ll out And that’s Europe to lining we about these challenges things back half, certainly things so second that I to up that. that the navigate on some would And think see momentum going then story embedded the about. top around. of a on we going then continue, have And be that and know of typical shutdowns we good in that and suspect got inside patterns summer will think there we’re course, lot have to

So these very an support, it’s momentum, will. early kind confident with broad-based we interesting story around episodic challenges that that of we to we navigate feel have and

Mike Halloran

when excellent. margins dynamics, So with that, are chain, peak there’s maybe these those how obviously on talk I quality were things impacting challenges, inflation quarter think those pain on price your you, cost mean, from hitting, first supply perspective you all about

Second still quarter implied very good.

how talk lot of ton through it’s a of did this year? prepare But challenges. and it just for you effectively to impacting how work about So like understand phases coming I’d and to you’re you how into these managing certainly a the

Eric Ashleman

Yes, sure. our we Well, close helps and sell. like, very we’ve a lot to to very where mean, our I model produce, where where this close local talent is sourcing really of got us. we

us. being it’s I I the material. of say, lot quantities a some of buy a pandemic That frankly, don’t we’ve have teams kind phase converted. got have that been We of a of lot would kind chain. on severe really, inflationary that We the there. chain supply of remember advantage the acute talented food we us said, of the giant prepare worth the really further things moves year’s make So mean, a buy to And smart the little around base to this. spotty for front, of we’re for used, down lessons an inherent of

So little have a lag us. it for a does of bit

of around others But places. inflationary buy things we’re pressure, some electronics, seeing those. same metals. the lots where And other There’s navigating so are see few we we

challenge side. availability the a that’s price, on On on both more the the frankly, freight side, certainly

than We’re else port all trains, no that things. unclog find have of facilities trucking, to sea different anybody to those containers, trying

Our model helps us.

Our folks us. help

inflationary that’s we go bit I for going I the actually to think, out, think everybody. as pressure up a further ramp

One own of see our the that still businesses. things you it in appreciate, I can

a still As the little today, we bit have benefit. of

else kind They’ll end good Eventually, with some go factory. advantage some everybody is. scavengers. then sell back And Take things of where are at Find around there. people Our right get find they’ll and the of you the places inventory stock. over of dealing some over you’re here. kind what you’re of

we’re for So that. planning

moves for can the all story you tell talking of of And us, making this price never this We’re without need all that course, we to. certainly, about capture.

got fit executing you aligned as to of as as doing our it have spread so a we we’ve taking and of considering, the And and advantage we maintain price that sell remembering capture and we then the we mind requirements these where backend go. the at customers heck time out all things of environment drives with that that criticality what top trying to of and all manage we’re difficult suspect, of the side we and it. always of spread And lead do. the That’s what kind on

Bill Grogan

Mike. Yes,

So with customer. sitting we’re where surcharges inflation right They’ve our ramped our proactively maintained now historical more have businesses, spread. the incremental seen to here prices has we’ve that or out we When that relative some were gone up pretty comfortable quickly. we cost price

we continue through teams actively chain that are year. that our make the So our the we ability teams to with progressed as have to working commercial spread supply sure

Mike Halloran

answers, the Appreciate for it. Thanks guys.

Operator

Markets. with Our the Please proceed your question. Capital with RBC line next Deane Dray question of comes from

Deane Dray

these terms last the like Thank a were lagging cited COVID There were in COVID in looking remarks initiative. potential that you. this the the that couple million electrostatic like It bucket, two morning, new expectations. FMT, and was HST in related, tester were to that of were $XXX of were know $XX Good of sprayer. year I everyone. they initial products part IDEX sounds COVID products. the an the There million prepared revenue

terms So to those but how not just come going I in that, through, related COVID of get just all update give that us many initiatives, an where stand expectations? does are

Eric Ashleman

Sure.

I quickly I’ll mean, this So that million. That beginning XXXX. and pretty about in moved just to the XXXX that between high $XX and we back to originally start split range talked about was pretty low. kind evenly from of walk

diagnostic was So see year the in second. about million a the of application, backend points the $XX And now come as talked and for you that both two our we’re situation application, globe in pressure in COVID the loaded. vaccination noted which electrostatic the about this to we walk, always of across components terms a got in back kind then and things. we’ve a remarks, some noted, you biggest sprayer saw there that around I’ll the the testing, bucket those improving in more to bit which frankly, And we related some we were of margin little other and rates and talking

sprayer as standardization, front, a literally the pretty time, At for need thought, coincidence as the That not thoughts. the high CDC with planning. part change On that’s launch previously change of guidelines thought. was in in some a some binary is of our around being as

different view expect, you’d we’ve taken a slightly as of business. that So

this – that. in and it quickly make was hit live rallied I though. do a essential that’s slower. it. But lot to places. And There for a positive put product I run try product got our it transportation the be mission put of to of still together terms to basically markets That an going in want and was massively together where pause world hardest of doubt all the it this aspect out businesses ready and of their second core better think a still going it’s to that involved are of good one point business line. our it’s no of piece A place. a plenty out to

going that going one. forward. that leverage capability And So we to celebrate we’re

FDA things I and side, tell world, with of On bit it’s but more issues and must we partners the a approvals complex. this our testing on got have some little on the front, vaccinations other you. out the rolling We’ve backdrop across

with happens less think, forward we’re an what the again that favorably back towards in we as go eye I little half. viewing a So

is at least with underneath happier and but there’s that, is impact surveillance of couple overall, a role world these here. out a of we how the point improving teams of together still our more by the not But couldn’t world we’re think applications. at to be has an recommended the still it want put testing, responded than half. we level And an to this Now to solutions play,

Deane Dray

right. That’s shots it for look, there. All market that’s of opportunities. we’d really the helpful. rather some much there’s will terms you update goal these Thanks good always other And positives that see take initiative. on And because and of development in come product out

appreciate that. So all

Second drop in Bill, of really of appreciate question, more just on highlight for And like reserve It to how expectations – organic taken. the I it’s just was out. you terms for year. separate the incrementals through the the inventory balance

both is reported baked organic the in expectation here, So and and here? what on on incrementals just guidance incrementals

Bill Grogan

Yes.

speak So flow-through healthy, organic maybe to of I’ll the organic. we XX%. really at Obviously, core look

XX%s we revised our reinvestments relatively increasing probably cost what’s add guidance. and through at to moderate the as if with that’s backs, with the math, low I going where quarters, we implied fourth third discretionary progress we’re the really, do EPS around that’s guide, think second, the

Deane Dray

helpful. real you. That’s Thank

Operator

of proceed with Please question with next comes Wells line Allison Poliniak questions. from Fargo. Our your the

Allison Poliniak

morning. guys. Hi Good

inquiries, to Just sounds I moreover project comments on big it’s some to that of color getting still like color customers the that quality I Is on want It want understand any confidence that just you’re side? it. you half, to from of can your there. sort could – go the increasing first sure focus. expectation Any provide back that it slow, on half make industrials improve. really second

Eric Ashleman

we absolutely. mean, the of year. about rest Yes, important I the business, of as it’s especially the piece an think

quite The actually is pointed That’s great we the the there. there. to shifted sign that’s belief. things, those daily confidence has a the working system’s outlook of And I that think one say, world is of all I the now. that of situation actually from lack in project great and momentum let’s side, that’s in of rates, The think an sign. momentum and favorable course, and order changed a improving that a

have lot actually see to space, we’ve execute of a people that’s on projects, people caught where and going, thinking ship that are get some product, I those look of would things some really, to I just thing about along businesses my larger of been at inventory, been think now all of a moving trying it’s really in a And that. up it. that trying own things zone same hard understanding

engage as particularly with difference in FMT, industrials this is down the we So that with customers, of right an that fairway tone.

you of the the lot see And medium kind These we optimism, term people. of that. also and very true nature of things especially You like a see expansions very, lot a of of those kind busy that’s of of projects but have. are facilities

continue forward. to bit already the those some So story to on are going more cross, confident work see that important to back. little we’re pretty just of And the we and an part that’s momentum think come them, confident, going very a then In out ways, lines we need there. space our get that’s to

Allison Poliniak

is things, of opportunities M&A, to I sort second And some here. these along pretty incoming activity you any really one it capacity properties Thank managerial so – that if active say helpful. come And That’s around sounds you. next, some, of more would change with Great. then And two handle leverage, I that to then there’s guess, that level. are pipeline, far. balancing two increasing. how deals like just a comfort interesting

any thoughts there? Just

Eric Ashleman

the and about us for a five in as A over think just quarters the the you’ve that Well, of as years we – lot of gave been looking of in now a muscle comments Great couple the optimization that done seen with we’ve last and companies. on integrating capacity here, leaning things Yes. IDEX so all we’re couple questions. building general, along. for we’ve acquiring

some transactions both a They’re let’s the the good very demand board. good And the terms do These something that they’re in are well rather while lighter say, across So talent from businesses touch require standalone have to here. IDEX two that’s in just activity. just that foundational than shape. at we integrative positioned level some going of

the now it’s I on have see lap in and to filter to that And work back that line teams out that more And there yes, in to top. a if able that problem, are with this again would the that If our being funnel side that terms fortunately factor we’re lot a build the successful wouldn’t the great But said of that we gate. so half, were shape is, we’re are confident Two to shape tell in. experience we very kind acquisitions. I are that. bottom continue could and these, the will of we on of you, as a always intentional of work good of were kind some on pretty transactions spec. We we aware properties very intent we in a take feel always than and an in work with And go I we right – driving. out bottom others.

Bill Grogan

at to relative sheet think I efficient we is then And X.X. still balance say, question, most of your about yes, second would part our your

is deploy billion plus the us the to availability additional for extremely leverage post have hand another Airtech relative $X capital closure we So reasonable. on to go

after than the So enough go we Eric mentioned. just capacity things have more to that

Allison Poliniak

much so the Thanks color. Great. for

Operator

Stanley. Please Our the Morgan line comes with Lynagh Connor with your next question. question of from proceed

Connor Lynagh

Yes, about thank you. to talk wanted Airtech acquisition. I the

the be competitive firm? should could this Just you market asset, of, to in about an sort of how think wondering, found structure overview the provide positioning why attractive if of we you the

Eric Ashleman

specialized the handling very a this the really applications, transaction. with very, Well, And both company. In nature business we highly opening they’re nicely exciting there really, very phenomenal involved next is This complementary. illustrated is an gas that to but air they’re the it that sits deck. on Sure.

are with the different nicely specialty strengths the of So balanced blower of very in and areas compression the gas valve then in the regenerative of side piece Airtech.

track got they has domain seamlessly, businesses but just got fit phenomenal filled So really, both they’re great Airtech really with these is together innovate. a experts to like have abilities growth I record. who about incredible

strength we’ve then the know ones two capital frankly, drive my of we we’ve extremely could for that gas base, I channels think of I IDEX and our a we’re quality that we’re well. toolkit, close toolkit we’ve like as in. of cultural things got that a the that profitable we when to compliment we’ve part open got funnel things can some got be deployment going the other as that the business. this interesting are in piece of markets very that it – thinking you an whole As markets particularly the said, there’s lot And that further. consider may and to got very that interested high together a that But base, a world it’s talent thing in of to XX-XX Last are businesses, there in end apply us about side, In out businesses future. is, unlock comments,

but around around of business suite its a all not the options, So centered could with. of that we be super attractive happier

Connor Lynagh

and dive the longer just that the growth Yes. Could type just a us business sort normalization the business? term you’d that. how of serves you markets about little to big deeper end on within ex-COVID Understood. Maybe think help understand

Eric Ashleman

a Sure. some And I some respects, within in work it’s and of piece a some then specialty in kind business alternative industrial they’ve an great being business of terms technologies similar in interesting has in the really done terms scale. things lot energy. as those it’s the this like they’ve it’s some tech. tolerance of done for a that they foundation to got a core in them that some has going applications, applications, the tightest spectrum. medical duty going They’ve and again, IDEX. gas how some filter markets forward, great They that financially but above. end picked, the very industrial important world of up to got nice of around – serves bring Many industrial leverage And at like they things are both be are just, mean,

important of general capabilities of has with for next it’s you see the little most really you And to applications So, level a their financials going at up just the sum pick but to incredible when us. niche well and lot up line always that it, industrial, the been that business.

Connor Lynagh

it. Appreciate

Eric Ashleman

you. Thank

Operator

next Please your line with question question. Davidson. the comes Matt proceed Our D.A. Summerville of with from

Matt Summerville

questions. couple A Thanks. of

about profit sustainability feel looked talk delivered breakout and business the how HST, to with QX? pretty what’s standpoint. performance about nice a First, delivered it Can of like operating performance that driving you that you here an margin from respect sort you that in and

Bill Grogan

then could take the Yes, add. I’ll sure. it at and first Eric stab

couple performed the to relative well think to of the portfolio restructure within then some last extremely I year actions mix businesses the the the that took assets we here over quarters. last that of these of have and

the businesses So a and drivers. primary build much of foundation that better significant they have off growth the the did mix within then sales different to were of, of combination

to of So would look this I’d forward. for say, them profitability we at here be going level

Matt Summerville

up question just of year want where realization How need as price how it? that to cost price keep you the you. of the Got And came much were a then realize will to earlier. in it. price that to price able incremental QX? guys cost you follow-up And balance much in the you sort Thank

Eric Ashleman

a the Well, we we it line saw we north fully target but we That with – bit, indicators going that think was with aggressively a what honestly in just we’re do the thinking QX. a that side. inbound to always that the up ratchet will spread in of ultimate to that lot see I were and about realized. on point we

way that along, the active, have a we I able lead the follows we So sort we’ve execute have very number advantage of are of that know that that don’t short pegs, that is method but times a price. got we of peg we takes in to

some we and we always where be of things item of So north a dependent shortest for probably would ultimately heading company. on but of us, that it lot keep where the positive where here. are that we the of But A spread for I underlying as net the is. see guess, mindful some commodities answer to want

Matt Summerville

Thank it. guys. you, Got

Eric Ashleman

Thanks, Matt.

Operator

Giordano next the question. question with of your proceed with comes Please from Joseph Cowen. line Our

Unidentified Analyst

morning. is Hey Francisco on Joe. for This guys. Good

Eric Ashleman

Hi.

Unidentified Analyst

specific pain the any the other semi-shortage, feeling seeing to you specifically that or like markets it’s whether sort are impact automotive? any guys Are on of that end market

Eric Ashleman

easiest program. both is certainly our the by world recent some fronts, very see one We customers into the figured to the much end first We automotives issues, out to. coming in That’s there point Yes. so those is where are more occasions got there programmed our them exposure quarter.

and making we elements the literally have it, sensors been navigating of in we’ve it places, we’re it cars? of, displays some it don’t and around ton it down they and some And there. So so it’s side, bring about out else, comes everybody trucks see that From other the to We around some work enter a versus talked products together here. in kind make. we mix – just move our that. to of are it’s seen frankly, so like And able and all computerized but of been we we’ve QX

Unidentified Analyst

And Are on bit Great. can like then you and in a replenishment just expanding side? little That’s expand general? dispensing more the on helpful. you demand seeing the there

Eric Ashleman

life we a been Well, of dispensing capital of be go where I stream that interrupt while course, there was painting has lot to always refreshed. mean, down well, – think, were and that, of fleet shut together. saw yes, things one point you big even reluctance that down, a going of that a I coming locked of drivers where a top up had were deployment. frankly, a I pandemic side, we think and at on sort on the of see let’s that knew we the there you we say, On was couple going of coming and the with to

that business now economies really things a on kind for together, pass are coming basis. you’ve global of that, we’ve kind this two global through opening that up So of got that a and you’ve got those Remember is us.

here. over the all We’re doing world business

all of bunch it’s has right forces to tend seeing positive And positive together time. of hit so many on we’re cycles. It kind that come sitting a one valleys. place over and in some cycles business does potential And this some a now

Unidentified Analyst

That’s helpful. you. Thank

Eric Ashleman

Thank you.

Operator

question Seaport Walter proceed comes question. your the Liptak next Please from of Global. with line Our with

Walter Liptak

after. fit to going? sector the a But was deal. for working there’s try Good pipeline process Hi. have good insight Was and with gas on you’ve been see on if with Thanks. nice for with this I or a and awhile of you deal? that morning we this Was that to Airtech kind quarter. wanted the and get went get been this awhile? through the something maybe deal was a a can working broker Clearly, to M&A congratulations on a Airtech go something some

Eric Ashleman

over them very, here. like kind about decade half or for as long well mean, out known grown I time. that a companies of the watch are lot of Yes. We’ve they’ve a last the Airtech very so. Honestly

than might other we get a lot us So, saw it quite and of things our because did particular faster then quickly. one together of heads ownership, tell will they’re and of pretty came things imagine, well case, private you, under around. the as just And for of this moved it, lining us. those it for transactions, a of lot bit that up as is some In this a I the – quality moves to easier you businesses

Walter Liptak

past, this M&A for have for paying the feel wonder, about multiples in guys valuation about the one. that how’d you’ll you then, of multiple Thanks I talked deals. great. be Okay, that. what And the that to it a value-add is mentioned do Is like start early with you And talking think to too the XX-XX can business. you where you you could it? about – you bring you think

Eric Ashleman

are it’s very look business, high Well, strong valuations now.

from transaction. do. perspective, did representative We’re That’s spot the This XX-XX say, any – can sweet interesting. what of I’d pleased is it’s of with – in it’s we I the why to an going think it. XX-XX ways this

incredible Why of business your a do And already intuitive to and disproportionately that? resources framework and things problem improve And are the passion. with simple just them we’re a here what very a lot how What good thinking it of business. on becomes the are that excited over it introduce over more process time. that might on go you’re with work Airtech the team can help ours got best? and terms get of filled to is you solvers these understand like after? XX-XX helps that’s You’ve is its you going full in a things how It’s otherwise

other and use to elements You two in are future. lens different can to continuing business synergistic And different and strong much as it even companies is a use the better a this grow in that combinations help and really one the businesses but between about together. it about very for states, things – think think the around

Bill Grogan

relative over focus excess in You’re and capital we here the to going Obviously, quality the proceed is returns our of couple the returns think well cost to on business we we high drive a next years. multiple. be as that this is of of

transaction So, although the this side higher number, phenomenal a bit on it’s long-term print us. the on is for a little

Walter Liptak

great. Thank you. looks Yes, Okay.

Eric Ashleman

Thanks.

Operator

next Our proceed Graham question Please of Securities. Rosenblatt Scott with with comes your question. line Instructions] the from [Operator

Scott Graham

question. apologize, asked, the for morning you nice here. guys. and was been off I Good quarter Did Thanks mention and call for taking you a I question that’s advance. in on sales my of I If I specifically? jumped sort apologize ask Airtech’s

Eric Ashleman

opening around did Yes. the in comments million. We $XX

Scott Graham

million. you. $XX Thank

not of know some opposed particularly know curious it’s like And but customer, was Danaher, of a couple why sort you put you that I had for that like, just life I markets. out as it recovered. Additionally, to with in recovering Illumina, have some I perfectly your in of market to which really their blowout but first that to quarter results Eric, not in as And be proxies companies I sciences, are noticed Danaher, up there, a recovering. are

Eric Ashleman

products a Well, comes IDEX we with to play the we that lot and of where a down there. couple of things, things like have

lot than companies of consumable a lot more So, do. have we exposure a

that’s in And elements lot that clearly embedded sciences. so that recovers are would first very a be piece and that of the life the

open of things Let’s as IBD go in and just up kind back take space, for the testing. people classic

the replacement but going supply. box takes it stream, scale while action large we that’s what to do on before you’re of lot and a a a get You consumable

have their not to there the it different it you for That’s this way in a we’ve in sort exciting certainly in some got space. but involves some together of that have all development elements mixed we the going So, And recovering, AI especially microfluidics category we stuff next it wait. on and move are that as find use a some side put say, and the yet. to into when like to vaccine understand itself to to place. We’ve bag quite stuff, going got where us of therapeutics. to around But there here. we places we’re have the And

Scott Graham

quarter Right. I if sciences on recovered a things within have around guess, you just call if move then that bit little space the would into zone? notch the didn’t and by next the space, you different be a surprised up life

Eric Ashleman

the moving machines, don’t But companies. know. those in later, that I’d wouldn’t certainly in or that’s there that’s now that direction. from and it dynamics other to IBD down consider would cited to it’s you improve. be we lot some hard suggest placement I All CapEx what of arrow imagine the come quarter follow to of that that would of much the whether A a it the of would part,

Scott Graham

you. Got

you. Thank Yes. Okay.

just like given it a slows there you you morning? potentially down sort on refresh is are. little that It the as a was that page quarter. quarter know Or a fire may surprised the which This watching like – sort fire on an of like good this might think maybe be surprised here pretty again fire. of muni well, that, area number, there and sounds us reported of from a me, the final one still you you question number you. that that’s another that into update sort I Could bit have were that maybe even customers just and of and kind robust related your needed on coming So bit same of rescue. market? spending of Is customer morning reported

Eric Ashleman

going certainly said might what a say talk Yes. lot have they interesting on because Well, too of you I space couldn’t seeing, I or about will they but be it’s things an much what here.

have to and got backstop to know things concurrently. lot many regulatory wait the obviously see that so There it some and that of spend that around efforts municipal goes. moving are side profile going There’s where that of there’s federal You’ve elements and a are to we’re pieces.

of certainly then around talking that potential globally, some things stuff this that chassis of the this market we’ve dynamic, ahead even to recent of off where about sales we’re industry side unique So supply trucks chain got sort and and challenge we’ll see. And seen some end on more you’ve the for the capped very customer. in of that’s

massively then add in variable, that are the but works out you is successful it. for And to So, itself, more us. global for underneath we’ll see And be how have good a do to hate market along if rides to have to ultimately us, with that’s business. always where going this itself market I We’ll see that. people and really municipal more the then throw

here in step. are necessarily And so, Midwest. what emerging India in they not markets and Things don’t all move as going we same see on the and would in China the

working a there’s things of together. So lot

think I clear put monitor be go. a where in picture think as quite lot like we we coming it not expect would is ultimately. the and to it’s it here back a be recovering. things these of we it safe It paint improved, will together will you to then to And

Scott Graham

That’s very clear, Eric. Thank you.

Eric Ashleman

Thanks.

Operator

Nathan next with proceed with Jones of Our the comes question. from question Stifel. your line Please

Unidentified Analyst

how quarter? total. end for then so morning. XX% you Can Jones to segments order Orders in is X% markets in the rates? daily ask orders. cadence and What order of up and far in Nathan drove through trending this of I about Matt the kind on improvement And organically rates about wanted the orders were April. talk This

Eric Ashleman

company and can Yes. I month each quarter. its guess all externality. equal. had generally say But take it through of that I in first kind were I will improved remind mean, somewhat the again, moved chapter us them we honestly of as you entire of own

looking So broad would as I Bill, at April, the mean, you’d the see improvement add. we’re anything don’t story and change kind here. anything that I quarter of through marching

Bill Grogan

well extremely things improving Scott’s dispensing withdrawal about a the group that based within and that of orders, obviously that’s across on the in the guess, I continues Eric a the that And obviously Banjo within the portfolio, all to a quarter FMT, outperform talked the relative from the we to with relative portfolio. rescue of FSD, extremely did that’s some Within probably little question, then businesses highlighted to dynamics it slower bit so bit did fire and the of well. phenomenal specifically of of the than No. lagging HST still outside market. balance had

Unidentified Analyst

And Okay, your muni. muni market? spending and thoughts the impact on then with I And ask the budgets your great. wanted are What assumptions Bill spending? potential what infrastructure a follow-up on are and muni to to

Eric Ashleman

Yes.

interesting in we’ve it So got by goes think look, you’ve on it’s find everybody as a Then spending peel generally here? as stuff else, until of muni in do like think see probably it. I a headline really when of back we kind kind steady And unclear. way lot headline. we more category of timing. The variable would infrastructure and and got a she that always, of is to pretty you its we expect as Like work go know that

many while say it’s think it then for it one thing see help means bridges, roads means IDEX it for So starts is the and until to hard to supports it that, if exists is that’s markets. going like that element of – run and to IDEX, should things that And different. a just and itself, in general, positive more I that I take out. it I it term wet a means actionable, to pipe clear which become it’s fact me underneath sewers would if think But how and in

view continue within trends into as business So to call insight we way. We’ll we the things start paying out. will surely that and to it it get some see driving it

Unidentified Analyst

you my Thank questions. for taking it. Got

Eric Ashleman

Sure.

Operator

hand back further There for questions no the the to management queue. are call to closing I’d in like remarks.

Eric Ashleman

much. so Thanks Okay.

and want lot to for interest like I For those IDEX know you the in to this external We a your a there’s company. call thank of always as IDEX, well. support on employees

again I resilient come, but your It’s paying And we’ve you There’s business. hard talked as want here. hard for clearly, off so a more got work frankly, to we’ve about thank to work.

well. We’ve none people our positioning serve team these to think as got that a here. continues to attractive second are of in I niches

I that come know think forward. pretty about we’re things you will way, hear, optimistic be up are the challenges, can We along So that there but unexpected will path we’re excited. the

Pumps. the And momentum it seeing, we’re us. very here story into ABEL about that excited with alongside where Airtech the excited We’re about will take the bringing family, we’re IDEX

go as to on as forward hard way much. you progress. of top forward. well that look as working talking We’re the we to continue so And along momentum we to make we’ll it all Thanks

Operator

participation. gentlemen, this Thank today’s you conclude your and teleconference. for Ladies does

time You a may your disconnect lines day. at and this wonderful have

IDEX (IEX) 28 Apr 212021 Q1 Earnings call transcript