IEX - Earnings call transcript Q3 2021

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Operator

Greetings. And welcome to the IDEX Corporation Third Quarter 2021 Earnings Conference Call. At this time all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure Chief your Accounting my Vice Allison now and President Officer. is to host, introduce Lausas, It Thank you.

You may begin.

Allison Lausas

Corporation. Good morning, Chief IDEX and Vice Lausas, everyone. This Accounting is Officer Allison President for

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

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

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

will an update IDEX Difference. with Eric conclude on the Finally,

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

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

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

Eric Ashleman

IDEX years to have our team, behalf accounting service pleasure to evolution XX Mike entire It's IDEX. for future I had his impact lasting I'd the to the Accounting best help his IDEX. business. organization Mike Yates, the On former finance work Welcome Allison. thanking by an Mike team. a and of his you Officer, to of start on lead Chief in on you, has our Thank and endeavors. of the long a wish like

overview Now let's our six. turn to on slide IDEX

to throughout supply quarter. third chain see We continue the challenges

past price, last spoke quarter, we capture third sequentially. best leverage a and the persist cost pandemic. to around headwinds. the Our At across thank our they'll this continue of the the our filled localized availability realized high poor the of just to price over to environment our globe day-to-day spread stamina labor business Overall, of for in want and as We'll risen about model I relative as providing quarter don't our critical best saw I to a other another around helps just in expect priorities. quarter They increase both customers. exhibited over while mission-critical all they overcame us and all disruptions, to work, this XXXX. and actions for support differentiated obstacles, of IDEX with the months of selling bit challenges near-term level into our price our but have team principles but we prolonged nature sourcing, due took yet business. others, to products. production growth the remain macroeconomic diminishing our business we Rather, prospects us a stage, to increasingly months within high our a see QX at our any material, your ability that align level were members hard IDEX signs customers, six Despite we any XX these like not the globe XX/XX we occasion. teams and last the resiliency and logistics

many conditions our backlog. challenges continue push We and quarter will aggressively organic sales remains price set orders, another Despite performance as third in the appropriately out for record support there, the arguments. and We to strong. our

million higher if to projects have at of IDEX current now was intensified Signals drive is energy backlog than the areas. have Our potential it sustained, around $XXX and investments the return the prices, end last within application of industrial year.

Our Health Technologies and performed exceptionally well. Science segment

for technology customers. platform IDEX components market share brought and Over our and years, facility X we Center create longer of capturing and technologies. investments with share returns, long-term These sealing Excellence facilities a our well so of generated focus goal tremendous Within to of in or new and the three enable our with term. a on series in footprint the up are capture core expanding stepped multiple together, market. forward. optimized we to technology we the across our of the new investments positioned repeatable our past on enable integrating to semiconductor by have growth We sciences going processing have value business, organic life wins the material capitalize Optics future to We growth optics built

the up our recent and their doing are extremely strong integrated schedule, The integration progress playbook. Both in strategy. growth ahead Abel are ahead expectations. as Pumps is fully challenging On is and environment our inorganic to well. Airtech of team the on side, operating executing speed of making acquisitions they XX/XX well on the come performing is

ample in remains business. capital future and acquisitions available balance the Our investments have strong, to and sheet we support

Our M&A healthy. is funnel

quote of long a significant best robust, record ability additional but come. number activity team lag, both day to business volumes. the investments end, to focused second quarter. deploy outperform have thinking Metering expanded the projects are in favorable difficult teams, the opportunities on delivering of a on growing each and turn outlook and technology near our our identified we capital interesting I'll segment, In to in in has remains Fluid confident very environment team's and day our and seven. opportunities were in industrial I'm spending areas. operating as that, we industrial term. in page delivering on to technologies very With both near versus years In rates term market strength within funnel Agriculture to about a thrive Larger & the Our improved. part look still while the

continue to perform steady, funding. due continue government is businesses chemical primarily limited increased and investment. optimism energy there to is The future lag capital around water to markets well. spending and Municipal Our general

on However, fast the performed well. chemical side, smaller, starting projects

cautiously as concerns increased fuel We on have are investment. shortages optimistic energy energy prices the to over trigger potential and

customers' X% instead reported. MD as other FMT have would It Flow our organic noted we X%. business investments. MD, words, a pullback impact capital Flow FMT's As significant organic of impacted in sales quarter, sales In by experienced the has excluding of grown XX% last

Science Health Moving & segment. Technologies to the

across We food demand and all continue see instrumentation markets. our strong Semiconductor, life sciences to end analytical all and well. performed pharma,

growth affected our chain-driven continue initiatives, but faster intentionality trend We win around businesses by European market growth than the that concentration a broader The saw challenges, is market automotive end grow within to our opportunities we share vehicles. to identifying segment supply our continue The targeted remains paying FMT. the to higher due and similar through industrial see off. in to

Fire market OEM tender US higher Safety, Price to vertical and to our Rescue within these business. due is faced Fire to increasing Safety will within Larger supply the markets, capture activity America higher performance the our is production global stronger slowly our continues & persist segment have to pullbacks levels of microprocessor production challenges. we struggle now. challenged due into segment In integration. right exposure direct most chain Finally, due segment offsets and headwinds volume due Fire shortages automotive OEM feel material challenges the but North & of to Fire XXXX. Products intensity Diversified banded tempered

achieve versus chain moderated and third performance. last We continue quarter automotive and the constraints ease. our new believe we're to increased positioned quarter, to well But platform wins shutdowns of impact eventually in the supply

customers dispensing on demand, Finally, key DIY and offerings our strong share. deploy product performed market as well capture global capital

expect throughout and balance like our to despite to supply sequentially our remain and trajectory rolling about chain market turn for We That end of chain remains challenges, that, and said, over not Overall, flat financial level. the to IDEX quarter is products continue Bill the were third of a demand supply optimistic closely to discuss second weighed organic With record environment we to disruptions results. I'd monitor markets. orders it backlog [ph] our XXXX. the versus continue the quarter, conditions at into year our and

Bill Grogan

$XXX Thanks, of versus XXXX. up Eric. XX% organically. QX of third I'll start as backlog overall and with year versus last the up and organic nine. million our of performance consolidated orders were results in quarter, on had well all financial $XX strong built slide million quarter three segments as the XX% We

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

Eric chain MD overall discussed, a experience portfolio, constraints. We impact our pressure an Fluid Flow & had and Metering from supply The organic strong continue tempered the rebound pandemic to also sales. on across by

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

pretax adjusted Excluding margin charge related Airtech inventory the value a million gross improved $X.X and fair step-up of the XX%, impact acquisition, to was sequentially.

was in amortization compared quarter will XXX compared due year. cost flat margin and from our by to basis discuss drivers XX.X%, Third to ABEL and year, fixed operating I targeted reinvestments operating points acquisitions leverage, Adjusted the the income margin dilutive up the of slide. detail prior offset more gross on operating driven next with some impact XX.X%, of pressure largely expansion to margin was Airtech intangible and their costs. prior

of in enacted effective quarter in period. in of prior as tax well compensation Our rate higher XXXX finalization benefit the than tax which the the ETR excess share-based year decrease regulations was a as was XX.X%, current tax third the to related the XX.X% to of due QX

up XX% Third of net quarter $X.XX. a prior XXXX XX% prior rate. adjusted EPS resulting or I taxed as mentioned XXXX an Adjusted in EPS was EPS in EPS would was tax rate million, or the in year $X.XX by $X.XX $XXX EPS. to of million, adjusted expanded at income differential The Said drives $X.XX $XXX quarter. which $X.XX, our have the had income been differently, net year compared an over resulted movement

result free earnings, volume-driven prior quarter million, flow partly adjusted up offset to higher build. year, for by by The of XXX% X% $XXX income. Finally, impacted capital was compared cash net working was the and was

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

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

positive XX% million, Our sequentially. within growth cost price, achieved organic gross year improved through the spread our flowing approximately rate. cost We saw price quarter, prior and margin contributed $XX at our

of productivity chain The mix the portfolio we experienced associated headwinds year. drive profit mitigate teams operational supply results that positive another Our a result to inefficiencies. a as mix last levels from is had pre-pandemic the and to business negative help to and continue our impact primary normalizing lever costs on

to supply the make the a and Eric the As mentioned, targeted the like significant on need achieved FX, disruptions, full growth actively of spend update reinvestment reported close getting to we us spend, of This year. that, to efficiencies, supply are execute the the flow-through. will year-over-year I'm incremental dilutive year. in impact the business, slide Flow-through a then provide the we flow-through our dedicated spending in of productivity. resources we would expected as and quarter on chain did With the I higher our XX% an future to by Despite level for solid the discretionary XX%. we We and in million. not fourth compensation amount pressure to execute on these inflation on impacted out back quarter. With a and $XX outlook organic variable in a they and chain-driven investing quarter, negatively drive navigating of XX. and into intend increases mitigate flow-through still fourth of fully operational we is investments focus we acquisitions bit

quarter, fourth are range adjusted projecting $X.XX. to $X.XX For the from we EPS to

quarter, X% the for margins driven lower by and year-end approximately rate challenges. and growth between potential inorganic QX to The organic is adjusted slightly revenue XX%. and the results and investments tax seasonality operating are third resource XX.X% logistics than of QX expected to XX%. effective organic expect XX% We be

X.X% benefit from about corporate and in top line expect around million. FX, costs are be QX to We expected $XX of

year. Turning to full the

$X.XX year narrowing $X.XX. to $X.XX are full We EPS from guidance to of range a to $X.XX our

We organic also full maintaining of XX%. are year growth our to XX%

XX%. approximately of margins operating expect We

our effective of be XXX% million, to Capital FX with the to due results. guidance. for top expect last line rate year We flow be provide to to around be capital $XX Free investments. to around line tax around benefit corporate is expenditures full anticipated primarily X.X% to expected expected are income, year. And expected previous to approximately in $XX net are be is guide XX%. costs lower cash million versus our working The

excludes guidance and charges. earnings any Our acquisitions impacts restructuring from future future

EPS Finally, on operating results the will throw peer this IDEX XXXX, We amortization. our results, companies continue deployment transparency with our intangible provide excluding reporting well guidance beginning in and we actual acquisition-related it that, facilitate journey. core believe on comparisons provide I'll back impacts adjusted Eric will our after-tax basis capital thoughts. report to for more final some EPS as of as With to as

Eric Ashleman

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

questions, share call to great to I'd like few Before teams. the we open our up around a updates

the named by a public thinking at Public this perspective National I in years. well tremendously company, both for the extend of have deal like when and Director him I'd been Bill, honor. I to great and IDEX Non-Executive congratulations, joined speak Corporate His XXXX, critical and learned on the the Bill same say deserved IDEX time I helpful off, Directors. my Association of and I've Bill congratulations the over from for I everyone Chairman, Year our Company being on to First around skills know insightful Cook,

and with within engagement. one Every clear aligns U.S. Turning to level, for of seeking color their girls Last IDEX to club one increased years, entered This Boys community. the business the local have US-based year, is Clubs a & the America. the agreement offering but added opportunity this create our charitable boys equity supported boys our to work Girls disadvantaged close national over next earlier at a units month, people partnership our girls opportunities foundation's pathway to foundation with takes of least clubs this location. business for Various Foundation. the the of underserved and units pillar joint and

our Finally, culture. we attribute much strong of foundational success to our

were just came even within annual incredibly we this and unexpected engagement Our in top in challenging the all scored with companies. turns, survey September loaded environment, back. of manufacturing study And disruptions quartile held

continuous provided Our do for develop the teams your around of we to are turn plans beginning questions. let address supports to that, the improvement their teams, IDEX. part at me tactical by local the world operator that it pause feedback and With to everything over

Operator

Stifel. Our with of your Instructions] first from Thank comes the with you. [Operator line Jones question question. Nathan Please proceed

Eric Ashleman

we I lost Nathan. think

Nathan Jones

Can you hear me?

Eric Ashleman

Now we can.

Bill Grogan

Now we can.

Nathan Jones

Well. Ends That Well All's Okay.

And First on in wasn't just it on intended. said in this in third the much as the in discretionary actually quarter up called that out as second question walk quarter reinvestment his Bill didn't think the quarter. first third quarter, you spend comments you ramped I and

guidance fourth extra margin the bit. growth I in at in the think a all from fourth coming looking little that is guys just quarter? for that down reinvestment that discretionary are you Is the quarter

Bill Grogan

exactly. know I Yeah,

within bunch in third different high and the quarter relative a have count good we invest to for to - that and that things there's and labor need done the In head demand of geographies teams third business. obviously, managing I businesses, pushed to quarter think the across would thought a of the critical focusing just we on job have we quarter. the bunch items fourth some other landed got the a

bit overall back our a So flow-through, but little still strong. come that and will of relatively mitigation on put

Nathan Jones

your things you release your that I I lower inhibit said the get how ability able any guys. push to of that there's to you slipped, about of press one then you to and that satisfaction. on-time up means And delivery if that a at them back leading assume these customer metrics you'll quote anticipation, impacts quickly, was that are all? pricing much where for Okay. constraints got Can be constraints all from talk macro if

Eric Ashleman

of it's of and a on-time function lead those then function, and Well, less Nathan, commitments. delivery Sure. a times actually extending hitting

services inherently is of that to So lengthening. a XX/XX that environment, our in in levels this struggling think ratio lens I the constant. all we've customers, times different so just of the we're customers. provide remains maintained queue the say-do with to mean, differentiated use But all high is the lead part We relative I for

your really does resolve. that it's around - question when it So

quite the think, to out the mean availability and knobs horizon, on as logistics. the together, I labor a we further turn honestly. spectrum of material availability, it's have indicated, bunch I across

start lead in. And as times So in, that, all can start to ratio. of able those to move bring to and against move ultimately, depend we levels and of on be high us higher all [indiscernible] throughput, still would maintain that back of

on OTD So it's, less lengthening times lead against on just and more again, expectations. rates

Nathan Jones

all? ability have Or times extending, that to conditioned impact price customers and this push at your are it? And are to point just at with lead does they it just deal

Eric Ashleman

It to interfered. as mean, has And Yeah. relative remains I of lead performance well hasn't tracking generally as so times really relative model we're advantaged competitively. basis. always typical is traditional on this a it our things way one the our then been because

the generally as all we them. long arguments the and that equations like as holds, that of So keeps where

Nathan Jones

Great. Thanks on. for pass taking my it questions. I'll

Eric Ashleman

Nat. Thanks,

Operator

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

Deane Dray

Good you. everyone. Thank morning,

Eric Ashleman

Deane. Morning,

Deane Dray

First, of luck. Allison. welcome to Best

you cash for to all makes to growth Secondly, with peers. it your sense great you, kinds on level-playing by put that acquisition see field of guys EPS, you moving

move great surprise a no So there.

the clarify is And guys heard out description you inflation everyone inflation, et can that are feeling thought you are had few where kind not. you've you. the But to clock So think labor, chain, it has - the given one back cetera. -- chain The Nate's And thank - that? but if really revenues? I question question, quantify plateaued, let's quarter, just whole have Maybe we've that there you you there the so of that missed any on and to - the about roll pain? just last supply could supply on of from just greatest are you

Eric Ashleman

Okay.

chain a least plateaued, a at for relative to that said has So look, quarter. X story We we say situation. did months, tough mean the tough fourth and it I supply at pretty been here into continue

a the second that frankly, quarter, end tough always tougher. with, third in tough continued the dynamics the bit So fourth and some quarter year make that in in tough little

thinking so we forward. And we're as those project of

the us, castings. labor some all a we things smaller And harder overseas. to say availability Labor in US coming as is have degree, on all from availability high And of what are have scarce items is vertically typically, about some businesses down a thing is does Others, I'd if the a it's vary. track overly of not We're we material ship-intensive. more it pretty where is tracks and scarce Your shipments are IDEX lot IDEX. away, don't I'd overlay, try semiconductor in mean And or geographies. same probably a a #X of there's for challenge. experiencing? makes it our those percentage either further question Well, that lot We've the integrated, around sales, and logistics for businesses. one I so say those but the we that like labor going And . materials. tend are be in configured variety to got resources, But to or and things tend us especially that's few of buy we they're then challenge. you then suspect, do other an as - continuing uniformly as to motors to that pockets

it's a But bow So all put for I pretty possibilities. want us, a you chain know the covers coming of to it just materials. through spectrum material supply in that around availability much configured of if

Bill Grogan

that Obviously, faster with maybe Deane, think across application dollar go high in, I can products got it and the no. cheaper, where commodity for to demand. spec-ed a revenue to product. comment, portfolio are they're your get then, critical week isn't we've This And folks lost holistically, that a going

technology differentiation different businesses. or we loss to price the to to relative have ability increases support across with So continues our revenue capture our price the incremental our

Deane Dray

All all And one right. just That's for helpful. last really me.

to lead of times, go there on on You so material the it that any that and flexibility that and weighs What's backlog? is is commented any your chance - backlog, forth. older it reprice more extended and Just there you'll cost back there? record is, inflation need

Bill Grogan

constrained. ability Yeah, where we're do contractually that, we the have to not

done progress have as year. the that We we through

Eric Ashleman

Yes.

Deane Dray

the all for Thanks Great. help.

Eric Ashleman

Thanks, Deane.

Operator

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

Mike Halloran

Good morning, everyone.

couple So questions here. of a

a I and environment we you just start you of the case, as various of appreciate this that moving us, next and and were performing. move colors year First, even markets years. thoughts and red gave the into guess, those green the lot we today. in Certainly sit in next thinking on how color literally how the triangulating the us, pieces through here Maybe gave you're maybe end can about markets those some as couple you

how all sort with the sit and today internally? sustainability curve as just about having challenges, moving level those out circular concern we how supply chain think demand, of degrading Your some you versus here pieces recovery you of balance challenge the all of

Eric Ashleman

Sure.

there. things kind folks. we changed of couple red a of that in is of chart few couple the last there the the over a terms of and areas lagging. green hasn't lot Yeah, relative are provide that quarters So It to

chemical, later even changed on that's small presence. the higher those tend side things is something continue I'd - have in here end are question automotive changed and to of more red IDEX, energy leave we - our just a flip did would over the I'll into stories sort new say those and if go those good it where . of be disruption, So and a that like. for But but a different. can I'll as There's piece few shutdowns more stuff we us. but little products no just to Again,

as up Technology very, in of strong really prepared semiconductor. the from life see a level, in well, strong remarks, science, can Those Science That's forward. some very our universally food are if We've really, instrumentation, the would mean, pharma a segment got analytical That's and I strong as think well. going kind kind I numbers, just you and Anything there our of to market. areas. Health I in continue got those is you segment our we to expect exposure just strong where come mean, is. doing

I think lends to would others has in more the our and and then seen about. have some of food over I bit through the middle course, of environment particular, the And intentional those. hit-the-order the lot to business. the areas shift lagging of the But that in the of starting lot, classic industrial of faster are towards itself project continue chemicals, we're down to movement turn indicate energy. FMT those see some FMT the a which in see that we side, of project discussions even That's a turn with capacity a businesses come say This on least will XXXX. been fairway at slow projects march and we in there. of the where pharma, that business into of talk and and side nature although our a sort a we expansion, we of other to seeing of first And progress spectrum: board, are of you play. move, right FMT part it The in some starting a folks on and places around like In us year. discussions chemicals,

just I curve wouldn't more continues but I acceleration So the is positively. it that different, to say -- move

of condition it's run sort supply Second the chain part of and was around question really out. your

I about this this would a work is overall, has playing I out is, industrial there's put still were space. the think indicating morning. of be interesting I in lot we to think capacity be that that to talking

running that lends You labor XX of and mean are challenges towards things other provide with itself some to ground. the equipment hours got that Then I too XX hours, support. running places into many and their some scarcity. automation going the

in is to X do what backlog in chain course, of that a supply I output the lines as continue ways, we're lot higher sitting back capacity order a with increase happen -- continues its a others and to and people of to backs of space. that would about wish supplied catch here, a would sitting to and cross. and good winds think that because the is like industrial some in those near-term rate challenge, challenges. steady lot would of feel at work We great companies the that longer-range throughput I are Eventually, and come other then begins it The direction. we the is our was kind So of

I think that's sort for rates coming the these X over X XXXX. into question of say, let's all open things next resolve. do of the us in, is time Those how quarters resolve

near term. few those them. feeling are the in to to rates continued things progression variable we're I'd that, -- have But going the and good a the watch course. we're are equation, of kind feel the and so seeing those, that are And of complex end to saying all about inputs It of pretty all variables of positivity, driving a that down with comes

Mike Halloran

And about of color how just around that. you think kind usual then funnel that? actionability? Appreciate M&A Any outlook, update,

Eric Ashleman

very mean good. I No. Yeah.

we both have kicking things might of a this projects, strong consider tires through are that more as of that and at in about of interesting lot as most on businesses traveling resources we that ideas over close an and more funnel a things variety well things apply there talked some we've of We're are IDEX more open out and line in areas, time. around. IDEX the like kind universes to a We're of here, As were year of putting job. looking the interesting on intentional

we're go there shape, in about and both So forward. excited prospects as . we good

Mike Halloran

Appreciate it. everyone. Thanks,

Eric Ashleman

Thanks, Mike.

Operator

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

Matt Summerville

Thanks.

for is have to I respect in And intangibles the then amortization, be 'XX, in acquired if reporting what a give relates And to follow-up. might with change 'XX? that Just for be you something it expected helpful. can number IDEX to as us that build have you

Bill Grogan

we'll and guidance give that for our in our late 'XX, with on Yes. once number was guide Matt, what January. go-forward come numbers out we

Matt Summerville

I wondering with a thoughts Eric, tend that to IDEX-like give in about of business. you've was volatility Okay. then I on how that should respect what little just MD, Flow thinking we business, seems you could bit forward. the seen a more if And on going to be call outside

Eric Ashleman

Well, Sure. attributes. of position mean for it very I sort infrastructure the bill terms it's country. some in has on fuels the IDEX-like materials it fossil solves, in of Sure. the and the of problems

measure that relative -- the to So the is pretty of sale But large business, units. average right, of the a This lot the IDEX typical. larger. is are you're product is these price unit of

us as be of larger come projects nature very of business. a in of of In capital-intensive well. fact, much the It to kind are terms doing those tends how orders way to

find against few price maintenance project infrastructure spend. comes around business increments, larger. the in a steady about off talking if And remember, around internationally. a is really, when projects But is in this is up replenishments the levels a captured state a and acquired over backlog core major to things high back of of pretty now and of projects. Then, in of It burned so the last year it, US. sale of or U.S. how change of course, the the in pipelines end we We things ago kind backlog had charge business the lot capital we ultimately because that in terms the just of this and pipeline We ourselves they the do are the folks product that, still really refurbishment larger dramatically acquisition. build-out long prior of We're that in the

it IDEX. results. So sure swing reasons, magnitude why year-over-year the would typically to the That's out of a the people call you we've than is make understand all it and those careful larger within FMT been - see in for

Matt Summerville

Got one one. final just it. And then

present somewhere you the in as good more typically And the time? much versus color any points maybe range viewed be And I'm of of nature helpful. a at curious to -- realization where more Just provide how XXX should on of in there year. that basis you in get pricing, could in some XXX, a maybe as year-over-year surcharge would permanent terms So be like? of as your basis that's is

Bill Grogan

Yes. No.

organization. more Majority looked of But our price of record the excess that's capture this as will year that. into of pricing it freight price XXXX. increases. to in we're much we permanent basis surcharges be is level it base for on offset So XXX will It the a been year. variable at most for for continue side points Obviously,

Matt Summerville

guys. Great. Thank you,

Bill Grogan

you. Thank

Operator

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

Allison Poliniak

want you or bit there? times there guys quantify a points increases to Hi, and the little And chain bring was attack, welcome, is Just chains of of your and I Eric, morning. those quarter little in a a lead guess, in start part in sort maybe what this more Is impact little Allison. guess for - lost more. the that, issue. of beat supply of Bill, you an to any one suspect good fully I first to of color bit and tempering year, next there, up some bit? a part back to them with way about the organic. along Supply and I a just maybe go of kind talked one, some Then there working of capital, that to terms in and then two here of opportunity that growth. comments is I

Eric Ashleman

Sure, Allison.

In the the we backdrop slightly could in with favorable of range posted. rates in we more a realized have the a supply couple percentage points of terms of organic probably chain, output, that of

many critical we like the make we'll other can some -- things, we, if the to material with will if take to. it made order, about going the categories perfectly it doesn't and point to can on something one in even the talk it that could spot take have I had and let we're simply say it prevented I'll X up that I those of material. Bill inventory. businesses, Just talked get

little So working investment in there. of capital bit there's a

part last on we we're like I chain question think the and help think businesses, other attack scrambling we dimensions. your of a capacity lot in any of our can lift way supply around, all can our to I it?

it labor helps an innovative, doing than very the that thinking through of sense, issue. that down we issue more scarcity ways watch the it been and spend. most before business and some So some honestly. and IDEX very the of year. wherever to, the solve quite to business not kind businesses Others and are to some that put labor throughout easy in we have doing we automate, we're places, things also capital into possible. is in but unique makes We're so have ramp And it we comes capital know because attacking

Sometimes this comes that down don't to is something people design, which think lot a about.

is actually some where fabrication. we it's the of that circuitry Sometimes really our local helps simple parts have, proximity whether us. with assist and or you This designs, even alter other can in

a and is drive discussion a a problem can to way kind material and solve in we to of So of, different supplier car this get in. a collaborative and there have bring over

of So short of or longer of sessions, discussion it's this problems day, see much possible, you around that pretty then of term one and our both wherever nature, to term, in management you'd every problem-solving. the the solving daily is XX% probably terms went in investments and if

Bill Grogan

side the I half things back And there is. once We're see. working tell we'll of assuming think next Yes. time when be on will will capital but opportunities year, that normalize, but

Allison Poliniak

And this was impact strong you it. to well of contribution that investments of of what had in some And on to certainly delivered terms sort comments quarter Is core as sort those any in mix today? having that contribute as there being the products of terms have Got obviously, of are way core. those HST, been quantify a investments just quarter there. starting -- mentioned, then to

Bill Grogan

We in well that robust targeted at segment the kind due of realize we that the a those the highs the just really say say -- -- portfolio. On but folks quarter, the couple, Airtech you to across in because continue a been was coming have expansion like-for-like incremental core shouldn't Since we I margin basis, to almost, I'd reporting that's been with margins in all-time of we we nature the second investments HST, And have No. margin associated overall in portfolio, unit. expansion every but are with there margin forward. look differentiated here look at associated saw the highlighted look in for we've HST within high and there's that that experienced entities go margin technology, as still in some -- the highlight. down almost Sequentially, did some the revenue single it. all the of as we it. there's of you into when

Allison Poliniak

Got it. Thank you.

Bill Grogan

Thank you.

Operator

Our next question and Cowen of Company. proceed comes your Giordano with from Please line question. Joe with the

Unidentified Analyst

touch Hey, of customers good any have actual their activity I demand guess is with your of like to orders morning. Yeah, the trends. wanted much trying you again. like are like build how inventory. sense Joe. how to also for just Robert I This order consistent Do on in And much feels

Eric Ashleman

IDEX question. nature good a we most I when couple of it's No, so One things. the for ways it's customized think some configured, highly a mean, of is about Yeah. each products, application.

just in typically, of quite when it's order product order to through what over typical to going system. not as patterns, sort how run out terms here is horizon. never the it's a And so I you're lots lengthening the we go different up of little great a sure customer year of say because it's of would

to another a that's our want We and us, in lead it would change lead would going then work lose That months' throw as particular times, of in is we recognizing, worth six most there, line. your quarter how know equations a if actually patterns order product. place accommodate tracks requirements, standard with this don't would So those might to use we're own you this to times they we in somebody given it. extended let's and hey, say case, before say, have

of So I a seen really - tremendous run-up IDEX we've never material. inventory

within the work thinking as reactive really that agile, end goes change channel people and the the think changed of think of us Our distributors Most entire planning of on doesn't products, around haven't world IDEX kind very really it a and way. in spectrum, they outward. they still, their as FMT through of relative for as generally shift

Unidentified Analyst

initiatives the Thank of It be you going sounds follow-up for largest you something integration which is have also, that. and just like have on you I like nature, be or those a that? is And helpful. And all that anything might focus very well. quick forward. date, a transformational break might That's a your like behavior, going This acquisitions be is segment that healthy, a of on one Airtech, I internally but with a then you big pipeline. one said really the like in would more new acquisition guess previous from to M&A all acquisition considering

Eric Ashleman

technology things chapter tuck-ins, I'd every kind are we say there. mean, pumps, consider things possibilities, like within we end which of typical little do the very of at like And want then transactions I Well, to things that pieces small, things consider that One, ABEL X frankly, other from of more of or, IDEX we past. Airtech spectrum always in are are larger. time-to-time the the in

particular very always characteristics a careful somewhat say, category, just bucket. in exercise for to And muscle, want giant risk. to that always it things you mitigate think would I is universe not are a actionability that to of that but have to we're that of in there's IDEX-like have And always there something question. were, if

to switch it there. lower the do we for the off, but probability we that is I from recognize time, reasons And we don't that time suggested consider so turn generally

would would that of we it mix it as kind of calls. it where and large how about one But you're and every IDEX our follow-up thinking complement that chapters size the in a describing. those is walk down given book own Just attach something

Unidentified Analyst

very That’s much. you great. Thank

Eric Ashleman

Thank you.

Operator

this Please questions of There with question hand over no, have Wertheimer are queue to we proceed at do to another no line Research. Melius further the like your call in the Rob with time. back the - question. from I'd

Rob Wertheimer

Hi, everybody.

targeted spending. background can you more little Just give if the around a bit curious

obviously mitigation seeing You in you & opportunities opportunity? for anything about whatever. the cost way But you a couple and/or attack change some with there's generally more discretionary trying you've discretionary cuts. been mentioned talking the investments I pressure year, Fire Are And are you the last investments? Thanks. of speaking, Safety, then know to quarters. just

Eric Ashleman

front-end work. bring areas, business growth in generally, mean, or charter the that the sheet they investments X IDEX, we on on the when strategic usually for about I commercial Sure. I focus talk to balance go the people we're they're around into side often or with skills to specific legs. in mean putting thinking going walk to

in are of lot bring in. of but it things, and the out nurturing need a to we'll services, And have go So the times, then begin third-party up spend investments. couple to terms down to that sometimes might of inputs in other and ability the in-house field, or that time there comes others technologies we the we do, a modulate we things the that amping shaping just technology, things study get to people-based

Rob Wertheimer

mechanism Okay. Thank Fire then a the of & don't the And pressures you. I and helpful Perfect. will some recapturing there. know, path in Safety. path cost I That's stop. response. to just And on a -- then just And

Eric Ashleman

off more Yeah. typical. I some IDEX concentration work mean the a project be bit as it's of is just larger do, the well. OEM as tends to little mentioned, a little there. this where have We we

changes and places You discrete as to sort make go as able we just put FMT the two together, things you're and not out other in and are quickly. those of

a it rest doesn't the -- the IDEX typical of time bit do. location. we it from The tend It's that mean would to get don't little So performance that more capture. just lag we does over verify absolutely margin

relationship So of - our that basically with It's argument long around you duration and the have different and share the a the to arguments, cognizant pricing those our timing leveraging are that's of solution the projects bit within and position, the little more equation. just a same criticality and just our number but be little things one position customers, of there. niches

that this catch will take up it those the that's time margin but of longer going here. over something performance to So little wouldn't we businesses, dramatically see us to a or as alter company

Rob Wertheimer

you. Thank Okay.

Operator

question Citigroup. the proceed line Our of Please Bystricky with your question. from Vlad comes with next

Vlad Bystricky

the taking for Thanks team. morning, call. Good

Eric Ashleman

Morning.

Vlad Bystricky

now. really see your of thinking or you supply the seen supply So as pressures particularly that you've increase just the up there some to and about not logistics investment course changed and targeting inflationary you're and better? Has and dollars evolved continue of over the get follow wanted reinvestment any to you're issues out where on doing, year chain chain given the

Eric Ashleman

And when a like one really the a the talked is markets, maybe the that's quarters, about, in got those we it consider challenges, continues very get great back 'XX and XXXX, were of the we're short and of X coming making the that's actually mean bets. series glad sometimes bought the you which about I to was you many you're we we different when best of are that as for and here, important the our out to chain in going were X, fruition as Those business, future. think things of all even near-term reasons question. that dates. even years for that went -- reflecting in When no. the commissioned Yeah. you're talked HST, things and full really, And you basically, stuff we consider disrupt that specific X, cycles flares answer to checked I the to they're made all in supply at aspects them of about happening specific day-to-day, make, 'XX, positive facilities and today that now is

around discussions two both have actually doing 'XX, in the things very front and projecting we're those longer-term of just positioning appropriately making and 'XX, make So and us, now. be 'XX sure One, bets we reacting to and sort longer-term simultaneously. of of extending disruptions are happening also sure into ourselves first those that aware trends, but to that growth

Vlad Bystricky

a growth over But shifting you the the bit. is in Malaysia? for countries the Okay. of situation U.S. maybe talk Thanks. in and and piece the course That's COVID mix can really the just XQ, know about of And I region Europe. XQ China Asia and gears like into smaller evolving saw given you terms in trends of then a helpful. and what policy responses you versus

Eric Ashleman

really years. performed of attack surgical well us, a mean across China, we would campus last it very most I IDEX, we've got everybody got it in I for XXXX. I and Yeah. And have play. of commercial smaller remind the And we Asia. a in I a general, in well and preface We've then things have say, some performed in campus Southeast those They where India, portion in both. broader areas few is our a way.

dynamics because applications their they're So got flows have or that after specific in picking technologies I then many niches, picking they've -- back. of quarter-to-quarter immune you would think go them and to we mean at we're mating specific the That times, up because see IDEX some we those. day-to-day more somewhat and in that available we're to ebbs growth

market that air dispensing altitude, all or things doing and things reason. for we're specific region So ventilators of for great paint that a across high is in

terms think in able that provides we're to cycle offer they headwinds wins kicks that's very ultimately, been region sales -- performing It's seeing we China. Now backdrop, I -- growth would we than a that option. are harder, there. that are more the in as for but different some have mentioned I in a certain talk little for And moderate and a interested about but a things think a has us. I'll What local is means specifically, markets we instances, don't say say little China in our differentiation in just would a rates talked we're longer, others -- for of investing have great belief quite this, couple to there's the there's there build around I and extended where and things headwinds innovation different in. specifically, of out where -- we China us, than

Vlad Bystricky

Okay. That’s Thanks. very helpful.

Eric Ashleman

Thanks.

Operator

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

Eric Ashleman

your Well, Okay. going and to here welcome today your everybody thank to at like for interest session hear our what's team I'd you. our time IDEX. Again, and to Allison thank and on

colleagues really My As challenges interesting know things I as for the are you. closing would I we comments for lot the know you frankly, be customers, the doing thank your this IDEX it's is there. those call. business this really for a on want Again, have. right of how I terms for well. that associates the and in out a hard of your day-to-day you're challenges and said, to time, communities

prosperity and everybody. you in to the And and weeks ahead. days I all safety wish thanks So

Operator

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

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

IDEX (IEX) 27 Oct 212021 Q3 Earnings call transcript