IEX - Earnings call transcript Q2 2021

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Operator

Greetings and welcome to IDEX Corporation's Second Quarter 2021 Earnings Conference Call. At this time all participants are in listen only mode. A question-and-answer session will follow the formal presentation. [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. begin. may you you, Thank

Michael Yates

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

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

me Chief Financial Bill Joining today our follows. Officer is format The our Eric call Chief Executive our is as Ashleman, Grogan, for today and Officer.

on with overview an XXXX. of on We and quarter the our outlook then performance will overview provide year of an third providing results our and second our update Eric will outlook XXXX market. begin Bill growth financial full end our and quarter for order discuss our investments and of update and state IDEX's for business an

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

Following open for the our question. remarks, prepared we your will call

replay. on hours by our to and exit you you the access If for to for approximately ID number complete Conference webcast after entering may dialing concludes two log any company's replay you to call call the simply may toll-free beginning XXX-XXX-XXXX reason, should the need number a Or XXXXXXXX. homepage

call the Ashleman. our reminder. Exchange This and last to to With release a Securities Eric may night's brief subject in with the CEO, turn I'll statements now Commission. IDEX's we Before language are filings and in this that, certain Harbor over begin, call contain forward-looking Safe that press

Eric Ashleman

IDEX dynamic year environment. in an working with stepped unpredictable who world Slide the our again and employees up team you are among you, and ever QX most the overview Thank past during so extremely and on Thank half challenging but around experienced, IDEX have the hard. Mike. our been a to The X. Beginning delivered

record and Commercial all and continue in Our to pandemic quarter. the three performance Order in sequentially is backlog pre above and orders strong level. materially record we as trends segments very improve

Our very for continue our and Only OEM We're organic lag continued projects, beginning a of many robust. in industrial large year. patterns the are them of order are day of XXXX phases strong funnels to move planning the half back to and support indicating rates FMT growth in bit. into next see

operating quarter partners, a at depend our minimum solutions and level turn supplier challenging supply lead Our challenge to is visibility. times. quick number We're reasons also on a a close integrated. the the to bottleneck generally We with short cycle tend located was These vertically typically lag We business now with of companies. materials. bill often logistics for units of industrial our material further tight chain one disruptions. operate quick customers' of very operating down conditions tight IDEX other our logistics by and component the network of supply

challenges the anticipate helps it supply same a support We between does positive recovered, many calibration we price costs, Overall, and material plateau. not not likely don't until year of things subside than like disruptions in At this end these our better quick global overall. model and anticipated to and the This variable. sharp economy as capture rising but of year. early exit believe realities on us next hit see a have backside soon, be they rate the worse these agile did inflation remain although the will the getting narrowed imagine most we of or Our disruptions We a don't increase. spread continue constraint. getting time, quicker today's many to highly the side will we

team's made the adjustments systematic two, we precision. and sometimes three leverage management in pricing aggressively with deployed few Our ago years a pricing investments

to are spread levels half expand cost We track back our the to travel price on of typical year. to as the we

a ability spent don't talking to on time of one lot is area productivity. continued I our price, business's about capture miss our operational we want While focus to

Our improvement to and margin CapEx drive through deployment. lean simplification, through teams sound continue XX:XX effort,

Our QX. One exactly we this spirit be robust to mention project as exemplifies weapon combat bundles to discuss another deserves costs. continue rising that project

bottom the market, group. energy show of overall some are now Our the lagging signs recovery starting to off still

aggressively Our our long-term in the proximity. equipment consolidate that this scale a teams headwinds delayed, working less resources was value transports. But to for and us and close inventory our is driver facility for than quarter, positions production to executing created project support are Ultimately, group. as in were project rationalization ideal focus a human the

expect We completed in am I confident be third seats. to and track through on of project the choppy these end the [ph] recovery back Overall, quarter. by the path our

from teams businesses solutions deliver that positioned quality outstanding matter are well focus high from We steps. very their within application that continue relentless to to apply

Moving and on our Rescue investment to the the deployed digitalization technology a Fire in acquisitions a half with within million small $XXX of space. first ABEL the over of startup in We X. Slide and year just Pumps, Airtech

additional we across to make strategic continue build processes IDEX. capabilities We want out investments and explore to to

integration happy is IDEX business Airtech, fit opportunities stronger past. ABEL business to in our excellent that see like in and competition returns. pursuing but than term. early growth each prospects acquisitions And near that potential our and our with the been in well it the It's with long for we're performing of days has and we're more style in solutions well drive enhance aggressive of funnel Our

half existing tied advantage. significant Asia. of expanding higher in process We're level also our higher drive to the our customers. competitive to approach investments these focused capital with critical scale India. of up M&A to our through investments with strategy are areas growth and and of spending the local-to-global also digital We're investing to game, we're opportunities move we the a on seek in our While in we And first businesses our XX% for IDEX integration we've China support the our largest as We year. impact in ongoing as our next increase project across facilities stepped of

as growth. focused to are as technology Lastly, operational is mentioned and investing as This support dynamics on in market as new productivity changing, both I previously, we're side. well the OpEx CapEx

key these for at growth new in applications batteries networks, incremental Some are vehicles, approach to is of support and products of already satellite semiconductor components investments in and inorganic for the to years up and like capacity sets both for investment to paying across targeted in investments enable global manufacturing. combined the automation building ongoing to areas, come. build broadband spend efficiencies new out electric shop organic providing us and areas off support These with are This targeted strategic floor. high success to

our to on Slide commercial X. Turning results

the segments, strong all and Safety rebounded build prior Fluid As Fire pandemic compared from Sequentially, resulting order we Metering quarter. increased backlog to I mentioned, order and in and and quarter, and growth. second delivered the continued a to year $XX Diversified Technologies in strength organic orders saw sequentially our as the both first in well quarter million of compared the Product across look

in debugging exclude FSD, quarter due XXXX investment we testing above oil of HST year us as well On XXXX. Science of which in provide confidence our Order to Technologies across X, commercial criticality QX. half the segments second orders FMT highlight lower deeper and also that market. intake pre our our all in application gas saw ability in as COVID impact and growth levels. continue half lags, customers. occurred double-digit we if Slide segment and second industrial its to Health and of of a pullback a of in saw results the the was These the sequential market, levels increased market, look the of a Our to primary COVID into also concentration businesses and give in the resilience end to deliver solutions the the our second

geographies, them. shifting remained, about focus of strong. driven levels, are by challenges only market Our as of to optimistic record around ability performing is and as segment, pandemic markets or outlook most XXXX with within I In COVID to level, Fluid strong rates equipment in certain above at our now disruptions pre the above we're and growth trajectory with recovery chain mentioned growth chain even aging our the day lagging of supply was projects were Metering and drive industrial large our Technologies overall, but execute to pockets and earlier. concern Supply from farm our prices. continued Agriculture crop businesses

was business Water stable. Our

our item to well We continue impact to energy year. primarily the customer's organic for spending, in its and for sector, burn and is instead of organic organic FMD of figures and words, limited in pullback capital impacted project FMT Infrastructure levels, the other as markets In trail impact Package it our It's X%. significant been longer to by monitor to FMT's due in U.S. of XX%. as the One XXXX chemical would investments, FMT's quarter last cycle. municipal acquisition close year a XX% sales with have backlog continue investment Federal sales the capital and highlight now last the

the across segment, our driven all The continued Technologies market automotive continue demand face chain market concentration the market by to targeted growth product markets. driven winning initiatives. supply share recovery to vehicles. we're perform but Moving growth well due end and into outperform and we activity our Health to European and end seeing Science challenges, strong overall [Indiscernible] our higher to

the continue as the have increased. within business ease Life similar FMT. and AI segment The to perform to market Science result industrial saw a Our investments well impact and pandemic

production by Safety rebounded to adversely pent Fire for second through capital freed dispensing in work and Products Finally, automotive affected large Abandoned our the up shortages due was quarter. demand U.S. equipment. business in and retailers Diversified microprocessor segment, up pullbacks as

new constraints emerging see In as positioned we we market the Rescue, to However, have to supply believe yet achieve tenders and come markets chain and and to remained back we're Fire platform larger wins continue outperform well slow. ease.

our We of market the to backlog, half like as ability raised execute in continue and monitor well our growth we're that, to to I'd have second to discuss our the expectation it our and markets trajectory end our year. results. financial in That strong choppiness the said, With organic to confident some expect over as year. conditions for of the Bill closely future turn on

Bill Grogan

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

of Second XX% million quarter XX% overall, $XXX organically. up were and sales

Metering and the side constraints and results. across sales. discussed tempered chain had impacted supply on a FMT pandemic experienced pressure in energy rebound While Fluid our our we our by which organic strong Eric from were overall we portfolio, consolidation also impact an The

FMT, XXX organic XX%. would increased have by by driven year-over-year and expanded increase capture, by margin The inflation offset price basis impacts. Excluding points primarily volume supply sales partly and XX.X%. up been QX chain gross was to

up acquisition adjusted the ABEL sequentially. value Excluding $X.X related gross pretax approximately and margin impact fair the was inventory charges flat of million XX.X% to step was

margin discuss year. up spending will Second more Adjusted in was basis prior income offset was operating points I margin discretionary driven quarter largely points prior XX.X% next to rebound basis on leverage compared investment. a detail gross the drivers and operating XXX fixed year, and operating margin in XXX expansion of costs compared up by the to by slide. XX.X%

the $X.XX was XX.X%, from benefit prior to of rate $XXX also which income $X.XX was XX% resulting second tax effective over prior year in was income adjusted quarter than the drove up guided the ETR adjusted sourced due benefits of favorability QX lower ETR. year This or XXXX. for QX foreign adjusted of to million EPS in XX.X% Our rate quarter. net our

and compared payment earnings. year working volume higher flow income. timing build was partially Finally, was XX% free driven net adjusted by of million impacted the for cash was XX% down by higher tax offset a capital $XXX This of result quarter to and prior CapEx

the significant Our remain strong working do good changes to year-over-year. job a teams volume metrics managing the capital and continue efficiency

which operating increased million income details year. prior operating of XX, the Adjusted for Slide adjusted to income. to the on Moving our drivers quarter $XX compared

year prior material XX% contributed on We volume leveraged increase. at margin positive within maintained organic price Our the approximately quarter million rate. well and our growth $XX flowing through cost the gross

investment from Our experienced high disruptions. profit XXXX, mitigate pandemic. driven the the control by helped environment of contribution and we In quarter during spending chain supply margins the strict cost second headwinds minimal, the discretionary were a

FX guidance the about the with spend line pressure As XX% throughs negatively performance, of and impacted year. flow incremental with returned we in our $XX we of gave spend, investments, that with see issues year-over-year dilutive XX%. continued us Flow and by a impact we robust to our a tempered to beginning through. organic growth the level still of we line through achieved flow reported of in getting supply the million operational Even the and chain then acquisitions strategic at our

As aggressively to both we reinvest in drive highlighted, to and organic opportunities. the expect we business inorganic

that as will reduce associated flow expect year. update as initiatives organic I outlook similarly well level discretionary spending, full and on quarters. third We growth from quarter subsequent our through our provide of would like to an in With for the that, costs

on to Moving XX. Slide

to quarter, from For range projecting third the $X.XX. $X.XX we're EPS to

XX.X%. growth revenue We of expect XX% margins approximately operating to organic of XX% and

top is corporate are in from line effective The rate to expected tax XX%. around a quarter third $XX of third million. FX. And expected be we And be X% the impact the costs benefit to quarter expect

full Turning year. to the

our year guidance $X.XX previous $X.XX. which a to includes We of roughly EPS of contribute XXXX, second quarter. from to our $X.XX will in $X.XX full $X.XX increasing the half This are Airtech, up range to range $X.XX

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

We of approximately expect operating XX.X%. margins

be guide flow a provide due last around lower versus net tax results. be costs and increased $XX benefit XXX% be of around million are expenditures to $XX our to top line XXX% higher FX is to million working additional is increase investments opportunities. our effective primarily of income the last growth around year. be Free The expected volume. our our spending to versus support to capital in $XX to increase Capital capital And cash we year as expected anticipated expect are to corporate X% to for approximately We an call million, the expected XX%. full rate

With I'll excludes guidance back with that, earnings throw acquisitions Eric earnings final or our future charges. for some Finally, to costs, associated any restructuring thoughts.

Eric Ashleman

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

facility. improve at also to great IDEX. a share the for than this culture. to up Before €XX,XXX installations on to team. happening now we their the a week I'm an in help evolution capabilities share leadership. pilot levels improvements people in cellular DE&I. new on the company his Germany. Chief sure and year the and open we IDEX and potential measures pledged Troy will I'd this he of systems the full XX% We to with make needs communications journey update earlier there, as the He senior the European other our we completed last Officer. about and help IDEX, will I facilities project size culture United [ph] solar hire of recently the to bias a their Inclusion fourth just will of that leading us announce the it help like build solar our soccer competence field like background help us leadership the more energy opportunities call first He Troy our on carbon footprint on the look of step array taking in business nice Not for U.S. questions, my and that workforce. would leadership alone. on everyone, our embed our to where I'd success from in in the provide our electricity diversity carrier build of largest facility pleased our roof have our Work all reduce it I LUKAS will things McIntosh Diversity around Equity ESD matter world. will will their through year the joined month, serve save began DE&I and of one-third I next Cellular, for and At will the in we're be education the deeper only solar a way States, reach no training, He in global significant Once mitigate collection anticipate this led to just estimate manufacturing create panels and culture inclusive and coaching. roadmap forward for efficiency.

Lastly, quarter destroyed. I employees their damaged Vetter earlier IDEX of had German are Safety have or that month the want portions employees. the to many Western and home flooding the Fire of devastated this a business has impacted catastrophic share Europe either severely About

our the the to are saw again to of businesses. assist all flood. loss, which our as All of impacted directly from and and once employees from came with IDEX with our by operation IDEX safe family Germany destruction and come ongoing living this area continued in other are pumping through. friends businesses the not we spirit at equipment recovery facility, efforts Amid is Vetter Colleagues

Our German long gave recovery those road from the draw flooded the people to then. XXX,XXX water by which The tirelessly of work impacted. to is in homes to Cross, also Red thousands help assisting to Foundation IDEX the people region

again While you tragedy. through want dropped I need. time during the I our that volunteered you in and this with all by IDEX shared at employees stand thank selfless this to colleagues we everything and Vetter dedicated this And internally, terrible who express to

Your this for to let outstanding examples special. questions. that, what it and makes over pause operator With turn the me your so company

Operator

Capital gentlemen, this first Our be line the question-and-answer question [Operator and with comes Thank Dray your question. we a session. from you, time, Markets. Deane of Instructions] Please conducting with will RBC proceed ladies at

Deane Dray

morning, Thank everyone. you. Good

Eric Ashleman

Deane. Morning

Bill Grogan

Deane. Hi,

Deane Dray

so like that early product at prepared maybe peaked what disruptions suggests chain markets looking diverse them you're worst is know we have that touched kind a that many comment can I'm sounded optimistic, end I degree we or the the indicators confident passed. more noticeably the the within GE And remarks. of Eric. But start sounding neither Already, supply XM. yesterday And But your bit Eric line. and of heard the the And as had in with you're asking to of from and reason also you are confidence?

start Thanks. there So maybe going we're to thing.

Eric Ashleman

is relative make I this really, this at no really guess tough of mean, this Sure, somewhat right all Deane. - now. mistake, this point. I is

tough at And so, don't to is. is mischaracterize state want I steady staying there. what of it it

For exposed that us, of the microprocessor a other couple less of are. businesses a we're lot electronics, remember, things to things a little to

Our bit and a generally simplified. little is building more streamlined material

lot things many of work. time, of very the quarter's what times against have this lead indicators still, pretty while don't delivery honestly, do is to way like like the pretty we for said, least lead lengthened are this a have we that point. drive aggregations a we then as or the lot holding them we That at they're generally we components. are the And being The they are them, at, complex suppliers against on and So, by extended, our have by great close critical that, us. but and not great difficult systems, in And at we're looking at of and rates kind point. stable performance what world, still

So, just can we comments see of for say, it, us, we the and the begin one want very I plan it's now nature the environment, but do. tough what around, given very, to relative we emphasize to

Deane Dray

front started. could Thanks. here, still be you stay, rates real not of helpful. share and kind your can maybe real that time projects there's we larger mix analysis any a we log like commentary could, would And commentary July if about about if the And how but discussions some yet, has That's seeing helpful. of more day

Eric Ashleman

Sure.

and kind back that that the even our businesses. at of go as And days stable end of of healthy mean, of it day XXXX, pretty saw in restoration that come rates quarter clip, acceleration move we there's I stable. in the see in at in of it's scope. decelerating, kind in this in on second we'll about the point. of industrial that they're at seeing is as price accelerating businesses. and most of same world, we but the a different was we to size and lot of other - it project ton think July, we're look And And in think we into if More it's first up terms So, rate. our they're terms at not a two category, things components for then some the IDEX and of a degrees the it

trying productivity, discrete I one XX get XX. are enhance production of or and to and their to These are are what things optimizing of to on or continue can they're two, what's So, at people seeing something QX we system. QX, asking the where lots growth, will And factory for it, it's contributing we into the small running know call the kind do would their they're you lines, Instead run. and projects. things of those optimize but throughput, are

the start of that think to in in some on an to order that the they'll well hear we story happen? little it part a of those XXXX, infrastructure closer classic minimum, are spaces. you When general in inspect past things play we're Certainly, lot we mainly distributors so, will there XXXX. see projects into and it and were the have say replenishment to them a still where Maybe transfer the contributors. we starting from of and those early And cycle continue. talking there's are those quote, And They oil there's ahead others think were frozen seeing pushed that starting the it, been just out a kind They gas, And of the of bodes delayed. of our and planning, start we're strong and Right turn back side. XXXX. chemical, with. and year. not half into for that in A canceled. are does kind I are things now that the are frontlines now, are more at what it of activity, larger I a to about

Deane Dray

were the exactly looking was for. That we Thank Great. you. color

Operator

Mike proceed comes Baird. Robert of question next from Please the with W. line Our with your Halloran question.

Mike Halloran

Hey, good morning, everyone.

curious I about pipeline sitting about a amount capacity today. fair thinking your actionability you've of in to of in the and how of the M&A you. And short here? an how still medium front know you're you update in just thinking you're environment, how got Just that actionable think is that pipeline term

Bill Grogan

of Sure, to through specific I spend. side we but of the got sure. numbers, availability mean, upside kind mean, availability it do is really, really good. could plenty maybe we down, firepower go I the I and Well,

a talking around of we've a of taking do couple effort zones for circles, have inside, to and of series IDEX we quarters the few the On IDEX. we'd That participate a the more this and actually now of about as areas we're And it time consider concentric And through resource the not to some of like part been business, radiating participate. where places all part, we're be today bill. of could some intentionality interesting where not like where to the attribute. things, of currently inorganic thinking efforts, of think we're

in we've of I firepower, doing we're aggressive. think looking And and actionable. work, more got So, end, the is we're active, very things then the at the funnel that

But are any still same IDEX, got the got take the into have than areas involved the that we before that meet requirements, previously best. and of you we've people tell to at, looking got to we leverage to certain we're done. going to we than work with things do more to Now, probably and that fit of get things had more we're it's firepower have to more we lots at I'll what discipline looking

Mike Halloran

you just be thoughts and broadening, strategy in and in areas maybe changes that guessing a areas it's not looked. thinking that might what maybe on more iterative of more I'm some nor that the maybe on high point previously loosely? you really level So, change there

Bill Grogan

it concentric is really it Yeah, about I second I and like this circles. ago. used analogy, radiating a think I

work today, life in terms there's in to it's fluidic that stuff extend position to of what's space, So, think the an customer set. whether in will bit generally a of solution the bring in the I our outward willing we some we're doing But we're little anchor that sciences.

open That's And we some mean, least that's interesting We've maybe an years might things mind know a separate of to long the always about couple always, on I page. couple have slight have that's been an tweaks And for mentioned always further But model. because they don't before, of now, IDEX resource zones to or very difference interesting little how area from areas that I two base at the been thinking we've done the the that we as that considered aperture a what to open there's for do least, anchored IDEX. that to been like be at but we've us, these out it. different. so, have still a of attribute.

Mike Halloran

more that question puts sense. record normalized Deane, you seeing these high some feeling just through you at with he cycle some broadly orders, And hit getting the what means run Maybe those start towards from about a probably normalization they it's of you about with year. track level, little a and levels? all of are rate, Makes bit year, talked least You're 'XX. and early late takes this timing businesses maybe once about thinking a move cost as better bit later the like and as better how you're in perspective things starts portfolio of margin, more can year, next a you a some pressures The seeing as move through price you look little the the CapEx. can or now, seeing these

come when think of are top does thinking that? Just your that about outlook on do you seat? And together constraints all of the that what from you're how kind one-to-two-year

Bill Grogan

sure. Yeah,

way like question. you it. it's a the phrased think And So, I I great

level years, very from you positive and If of the the a perspective. with think start I next about highest couple start think you

not a through out. and put were they away. very ahead lines if of that, be locked the of and you out of amount more coming think Then Appalachians. back played today, I all a there's is capacity reflective we're time like that, this pretty a I a as is decent of that terms recognize recovery You cycle think acute we isn't The think, now sort real we I and troughs, industrial a the even into this completely But was to with go dynamic, that is only as of question, cycle of think sharp that dealing we're with series the there of replenishment smooth graph that elements in super bit the like look system. is, peaks needs little

I of little momentum. operating a bit a think environment positive becomes that more that with standard

little of in things so, it think normalized, we're dynamics that when that when a would in be the would typically the now of are way be operate come winds at. terms that and feel place back they of used And with we for in play. about the many they that we'd places they of bit they in backed that reoccurred, And would we or talking looking all favorable I be would terms

I we lot it of outlook. some get framework, that to of positive we're you way none it the for But dynamic a and outlook in of way, really which the just navigate think of it's way. puts planning that view a and positive So, and think here, I takes that positive there's sort have of variables

Eric Ashleman

proven that we issues supply we're inflationary margin inflation, foundational, as that some year And go improvement. associated look couple here, a year, to there'll we I will be to for forward the then price through consolidations extremely just on as with economics bedrock much profile capture this that on growth leverage quarters. out more go two, the traditional the be deal we've executing with like as some some our that of the And if chain rising environment ability continues of progress very think facility well would incremental of and team's will the and

Mike Halloran

you. gentlemen, thank Appreciate

Eric Ashleman

Mike. Thanks,

Operator

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

Allison Poliniak

think near any I wanted morning. discretionary here, and I the changes own we going the makes be each a there up of I that know, a to the might half? mentioned the its as back in corporate reinvestment, think incremental. are just challenges altered has Bill turn bit that from notable sense. you perspective of Hi, had term, know guys. sort But specific across we we're as step about to Good kind segments? to segment which

Bill Grogan

think the margin, the I the and year. and they with so large pressure of they've and in one, on record and the our should we third weigh FMT's done But putting facility highlighted quarter some how comp of within on first and some I just energy, that'll the margins No. at FMT, were had things year-over-year. of outside that's segments that, consolidation FMT FMTs the of at outside we challenges consistently the pretty with then year and last really half for projects year-over-year two backlog the mean more perform two levels second other quarter there's

Allison Poliniak

to then And spreads. again it. the confirm just price cost just Got want

spread You guys makes was normalized we compressed would which more little you exit Do is what with say we sense. bit a near for I said that a it term, assume 'XX there?

Bill Grogan

exactly. Yeah

Eric Ashleman

Yep.

Allison Poliniak

Thank Perfect. you.

Eric Ashleman

Thanks, Allison.

Operator

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

Nathan Jones

Morning everyone.

Eric Ashleman

Hi, Nathan.

Nathan Jones

trends there, returns order I want as recent trends, to the a just that flow from will give had maybe more follow you being drag us little up to being color Can business MD, on quarter. some that just obviously backlog to when switch big recent a a in growth? a tailwind on bit think pretty you impact

Eric Ashleman

the it's that's, large that of right little - the and along like, custody These they business, and of mean, backlog They IDEX the it's things average pipeline nicely, bit at a intensive more business. of nature by there there. tough core than I a course, acquisition. of in it's point and going the Then, just like COVID of project are do. story are large Sure, they what that out markets a projects, transfer for And that. units sort devastated came lot were burning had

couple particular as is So, that then now right simple of environment, area this public in well. kinds been maintenance, We're very items. shocks if spend of some very mean, of just, you things, those a towards and there's that I think and other intentional

more That favorable. business that different them. are North think we That going what while I in before said, that generally long markets seeing little continue it's And has here pointed America, bought those we been be the to before way. little a international So, towards they're than strategically, breaks. a we're

of that that in things think So, take And many it. with extension didn't this for to that's bit economy pieces for our nice we as offline days too felt happened But here very a recently, technology saw, that that think the great little are events it makes and continuum. nice incredibly business we useful be it. even before a I them

the prospects the and free. think happening it it, does. So, the it while take spend like where for to we But what We and it's in nature. long to here of the going term are for positive nature long because term break think I of it's a

Nathan Jones

your the is a at down of So, hit kind on that basis, or still there more in here opinion? sequential least we bottom

Eric Ashleman

bottom the think characterization. a fair I No, is

Nathan Jones

I the that And businesses? digital then Rescue. investments can IDEX you us that just follow of Any future Okay. is? Fire a you color your made look variety and how What give to the that around digital for expect on up like to in want investment what you impact and

Eric Ashleman

of on about anyway. think, of but will doing some automate time, so Yeah, great from the now, how the be. the we're mean, that job think I talked with time working it's tell we've I'm that's been extent, while about some a like things you work things to these talking I small, happened. some to for really nature we've will to that I I

levers, that that. of and with So, replacing a automate products engages employees we've some sell got a we touchscreen, sea outstanding to

for other that extension to small areas make you affordable available in this Now, the some to truck, take more used be allows essentially, of data it off and firefighters.

we'll it's lot enhance it example from a probably it make and I the see there's a of doing, way to more there time and that where are So, we're from IDEX, some to a things valuable. kind of think good jobs time

And sometimes like little small, in one. it actually comes transactions this very

we things nice of been come and an we've to of indicator And in a and years. so, things and of have for scale levers it's Rescue number lot Fire that working a on

Nathan Jones

technology portfolio? kind Is to is kind other Or parts this really transferable of of the great this thing? of

Eric Ashleman

We be. reason. It select that for could it

You careful on places, be do other what kind we'd out here imagine happened in that rule know, so of I entirely. job it just But we focus And wouldn't anyway, of organization XX:XX an to There's need you it. the hand. at say can never. you things never given the size small

Nathan Jones

Great, taking thanks for questions. my

Eric Ashleman

Thanks, Nathan.

Operator

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

Scott Graham

morning, Bill, Hey, Eric, good Mike.

Eric Ashleman

Good morning Scott.

Scott Graham

I A be I've know, able couple all gap cost the What questions would maybe cost. heard us actually you commentary, to price around was tell was? what price in the quarter? that

Eric Ashleman

somewhere points. of bit the said look we we the price here compressed under back mean, progress basis cost that again, a is that or normal year. half the actions And XX quarter. I through XX excuse little we back we've be within our Yeah, to around - spread pricing And to level me we XX XX historical taken, at the as

Scott Graham

Got you. it, thank

lot just Now, hearing a this to around ask that of are think the some there, let's you certainly year? was do you through there. to have say, obviously wondering, experience seeing they things on about kind activity of this was in you, some of I out because quoting power the projects, these stuff. pricing or other - exquisite early can is customer guys what going the, next you're very can to - that You swirl you're of thing like, the the a because is of so, into part do chooses distribution, it be I this conversion something on lucrative based you of

you'll of So, early we're when next start that? potential? see funky this to - when normally Is that can that cycle in, year, sort would you

Eric Ashleman

times. and one not have anyways. some the was, It's distributor mean, I a to other median level, it terms of say in as easy it a usually that that if would we do it's the project. now go there's talking but to into distribution to of things would like you're degree, I about specifications their longest be involved lead standard We're then parts that varies would

just it's I of be actually XXXX, where's probably put zone, a if of beginning of the where would that the say, things in nature. place, lot medium So, it

but some So yeah, could be sooner.

again, later. you the be of back It the talk the This IDEX, wide probably would spot is but could depends. half. given nature Some now sweet about it through a say, spectrum,

it plan of maybe the next it get some you'll You out booked. And into part of run year. see it, beginning

Scott Graham

it. Eric. you, Got Got for And it. question same last

bit here is organic the from was like those around to why Is that outsized guide. is talked organic? maybe little below move a which you XQ maybe what why the you're an to XQ, sort is delays So, of saying XQ essentially,

Eric Ashleman

we're we're how to you ultimately it's was but it's on is constrained side Well, our going it, anything into next looking that thinking us, on places, good in output being What of make a course, go not everybody still level want chain of like about, capacity? the And to of a throughput know, next I just place mean, that move as as to as courses, everybody so people of and food forward. only low move up this you point. of lot and the kind at able it's

right now, gets up availability intensive, think I maybe of more better. the around us included. it, a that for labor this We're working that stabilize on as in Everybody's things just lot are we So, fall, where are, kind coming labor reality. people of

see. way where I out a just problem think like get that's backlog can crazy to working that math a people less to the and us have. more a that you ultimately, to of It's more to process of kind of start many place figure would complex ramp you a

Scott Graham

Understood. And was of around to is I question. last where earlier time the a could sort sales. on to. construct That Anything point, year your a promise of my Eric? this This XXXX kind question is started was my of predecessor to XXXX get what at the you offer about this starting talk

Eric Ashleman

here lot haven't about variables still be virus of to the a I we not there's But out today, which that that. I mean, this talked things would do time. go of nature normally was sort. including our yet the there, would want of Maybe and one

lot. So, imply I just, wouldn't I speculative would think, a and it really, be too

up think working we going the that ones things feel, what we and see that I throughput, know to which continue. we that to all beneficial us. have generally are over that And we back be more all We of think a elevate I variables become there's leading said to there to a of strong those that for out as is function are capacity move others are just positive and time, and to And data. before, going they expectation. eventually tendency

Scott Graham

a Thanks lot.

Eric Ashleman

Thanks, Scott.

Operator

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

Matt Summerville

up was an come through term The you Thanks. couple spread And Bill, year? here of could if aim into to back capture six get incremental pricing absolute be basis typically to in? what just point the times you're and the a price Q&A provide you realization first A in forward months couple questions. XX:XX I was your has price the looking that how much wondering,

Bill Grogan

framework going were No, over that back the the in to of points we're half, you. opposed little I from in be would the gave half kind accelerate I we yeah, a to first mean,

Matt Summerville

ordering? Can that distribution them? they're that what terms a talk pulling you to answer into your splits? I get demand, sell And an earlier in word you're resulting of sell question to tough use you channel Is would state sense talking anxiety and whatever forward your supplier supply steady you In then, your the among I'm sort bad similar in given base they're seeing about do being or in Eric, chain. through about over that with of sense, of a imagine or customer you

Eric Ashleman

of would and so a things very, a volume don't lot of for part. a are lot stocking we've quarters, generally, orders just, of question I like we know are say like, do very this had you of things specific, have hyper and products, high lot now as couple like Yeah, that a customized

said, aggressively not you, That only doing expanding, of stock we're a probably else. and lot on quarter number times a everybody just us would being We're So, because and to higher things to are We're mean, material. price, unusual point of occurrence. an a that. great our I company some I is of that's this

of campaign. number trying say, line seen a to people I'll a place get for take than giant So, there's in kind don't more in terms But - think here. it's can or it's just risk of this, it's I I hey, before we've in potentially there a

pointer needs minute of to avoid because price done this to be is on you lot customized the our or going the distributors, it's mainly go you're not since regard. the is not it's to the to but into. the applies going it's giant at to a a part this see can I in products model, of a just So, increase, a last of only shelf, lot part company, of Distribution, often

anyway, times value doesn't of make lot sit that add quickly to have shelf gap. on a a and that somewhere We

guess I So, story long short.

of We number of a but higher we of have nature typically probably incidence facility, IDEX the really, this us. because do, than really low for

Matt Summerville

you, Got Thank it. guys.

Eric Ashleman

Thanks.

Operator

Please from Our Melius proceed of comes Rob question. the Research. line with Wertheimer question next with your

Rob Wertheimer

Thanks. Good morning, everyone.

Eric Ashleman

Rob. Hi

Rob Wertheimer

I if advanced But right was opportunities, listening spending wondered on in projects a mean you CapEx, the what about on a road and down to ROI for real versus here, like. hear or manufacturing, now, I margin about the I long could it improvement prepared you if in comments for you related specific love going shift the you are that far direction how and you're made to really Maybe time, whatever time, was it. central more investment just could that. inorganic remarks curious doing expand on over maybe margin there's

Eric Ashleman

been. we've CapEx typically to story lot A around have ramp is but don't we is like, a markets at of it it where so Alright, anyway, of lot the emerging a up. IDEX up from intensity grew attributed

really, really for India both term capabilities there and to support really, taking we're deliberate areas we local that to in long China in concentration So have. very actions make local of our depth that over a infrastructure good

than and of when the was high standing even lot to technology it big of where robot factory things the base. in phenomenal the is course is be used category availability where Outside floor labor the it some that, time world, from we've to, like reoccur available, automation. technology of to all Particularly, more level makes pretty of cost points point there often. would that our a and we put have somebody driver come a The today, So, its issues, it's to doesn't there's down time down got sense doing for. next that in a

I of doesn't I using operational in our slide necessarily graphic really that them as helps it's So, are to the a business inflect that and a the used, drawing we're people, the That's, lever too area. there's deck It talented it's those on go in that to on projects tremendously. great perspective, it company, efforts a think out curve within actually productivity. something on we're concentrate putting and But very us outside. having the opposed from where from the growing areas that

anything… So,

Bill Grogan

generally kind profile, I we the and I returns would for the impact, XX because on mean, are XX return market investments productivity on return of both side. XX things the months can those inorganic profiles the investments we return or the the are do what side, XX, And say growth these on highest that make.

Rob Wertheimer

Thank Okay. you.

Operator

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

Unidentified Analyst

little Good bit just you're of morning, on for us bill guys. Joe. expectations give on as budgets municipal talk This detail what any a seeing sort there around some is about and Could on infrastructure Francesco well? the you

Eric Ashleman

been a money mean, probably I Well, are thought comes the to one, there's there. I let's a would that most Sure. number like I in here the States the financial be higher. always year things There's stimulus and and certainly municipalities, generally an of lot better were, receipts ago. tax in of interesting say dynamic mean, positions than United say, they

actual bill from an mean, project-based IDEX actually you There's help of reality did would Ultimately, question there. think and buy work support where CapEx. of CapEx go criticality good there's interesting. to our takes? I going ultimately condition like business of different to the businesses a one awful on long projects, concept I'd determine of you're overall to talk that have them. does lot studies, that how point do long Requested water to So, monitoring is terms just good. is lot sort is then of of one on infrastructure of our infrastructure way. is how a I Water in about always the financial us spend what great thing flow a parts you in and one which that an mean, to of in there's I a it

be as there's and we probably in well. system But positioned than it is economics might will And have through the category imagined run receipts other But So, positive like out always, a it take just better into think position a we pockets I went to might would well they're as the like longer I for think, and pandemic. than imagine. put I we're would in seeing I play some that it certainly in in, there. that's

Unidentified Analyst

term, that's talk Fire expectations what your Rescue. if little helpful. I could And Thanks, maybe for little bit there? outlook, recovery longer for the you and more very bit drives maybe know but about have guys a down a you the market it

Eric Ashleman

mean, phenomenal added most nice, I it's and years, businesses. businesses. we've got Rescue geographically them one business and to is a concentration, Fire they're scalable our dispersed over our mean, I the We've Sure, of

what's least backdrop in the as in of You at that term, We've start it into before trucks steady execution we've is put couple things couple that A red with is probably was of for for the mature and assets near going a a the One things, different space. that to the struggling the was zone us. Obviously, even said incredible on always of premise is geographies. that chassis kind that got pandemic better. most output making and it with market now industry on around us going there a and overall.

was long on backlogs if not fire a ago, year continues just trucks it so, longer. as to as And be

we there. complement we've a of a think runs perspective, our tends us, of push into localization keep products do I it case, specifically captive of impacted brand see yeah, timing a doesn't to impact China. until definitely it for as how then zone from a a emerging in that And term we've And imported couple but of hasn't we little - it tenders out. amount moderation now that well. And bit markets So effect don't seen side, seen the ways long actually local of our to necessarily versus in fair there sort

anyways. new job And steady encourage it, what this they when it, element is we're top existing on I matters. a the our about on of of the application like, sets in think market element in and doing terms basically, so, people where maybe always pretty critical it's that's

of is we be with still more the something steady discussion change and great about green ebbs things go assets. a that right like we're generally the But supported earlier critical on So, think state, exciting fine. element automation of well nature and them the can red the job is But zones. to doing mission very long positioned On a, had as the it's the certain that global going job, it think with be to one term now, And term of going we it does long things. through funding and to flows. is you not

Unidentified Analyst

a Thanks lot.

Eric Ashleman

Thank you.

Operator

from question your Please line next Blair Oppenheimer. Bryan the comes Our of question. with with proceed

Bryan Blair

Nice. Good morning, everyone.

Eric Ashleman

Hi Bryan.

Bryan Blair

technology in quickly wanted extension can follow I question your on think capabilities? Any should up about an how on we digital Rescue. provide you to and Sam of Fire color that Nathan's investment regarding

Eric Ashleman

think for of name is this you the I for we trade details others and of the mobile without application. here, it unit name Well, within essentially a spending on too call, time brand the of much lots the do think a that automation SAM can the on what

platform. some are that think to make of it of points, hardware, which of more that know come in the to together some off that the this mobile You lot as that, others to you related brings allows less based. our way technology that And in are are simplest important and a can to data to mobile us happen truck, make it's a related truck way it

Bryan Blair

pre can funnel a like to extension. relative In terms, the nuance you to this And very understandably sounds regard actionability pipeline. Okay, of the offered, of share simple you answer levels? M&A natural pandemic with size

Eric Ashleman

in I if think, the Certainly, we up terms are larger largely go by in just up could as we larger. listed and firepower work a there if transaction we people the to and the It's company transaction putting added that we we because and I it's had to how safe it's things that deploy? could consider yeah, potential ours, the and of where there's things funnel So, consider of larger, we're potential think internal say prices, that in the on resource size.

Bryan Blair

Thanks, color. the Appreciate again.

Eric Ashleman

you, Thank Bryan.

Operator

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

Eric Ashleman

time I'd with spending today. well, all thank us for and some to here you Okay, like joining

day-to-day recognize said end, deal that variables we a kind a beginning, we of that, around. people of the in remarks prepared basis. come up problems of these get really, we in when kind It breath, lot dynamic through, in going kinds has they and the with all well we on lot I But really of it's to of Technologies the swirling that deep back with with the IDEX of made What and at have have to that time demands. our through. we ask people take that and the of As we talked mean, businesses, drive that we a that world about be kind them, a need a goes and solved

talent. really, strongly end, one the we're We as that what's to live us. no At that's the And of ultimately, it's So, believe the horizon. near we're very, are where trade thinking and Thanks our variable again now I very think really joining have with But on And we and assure long term of our we've got you, in the to and teams about that winds we're term XX:XX, phase for the eye going through and of We're term intuitive. to prospects dynamic here the and medium a the to company. recognize kind most. very we're moment moment well this positioned work businesses. focused, environment. very I favorable. the putting We got doubt incredible an

Operator

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

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

IDEX (IEX) 28 Jul 212021 Q2 Earnings call transcript