IEX - Earnings call transcript Q2 2022

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Operator

Greetings, and welcome to IDEX Corporation Second Quarter 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Allison Lausas, Vice President and Chief Accounting Officer. Thank you.

begin. may You

Allison Lausas

XXXX company This Accounting everyone. joining Lausas, President second Vice for issued night, Good press a for is IDEX Chief release quarter months during accessed along company's IDEX the presentation with financial Officer discussion for highlights. X slides performance at today's XXXX. be XX, website Corporation. to for and Last our operating our June we our morning, of The used webcast, the on can outlining the Allison be and financial ended Thank us idexcorp.com. press you release,

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

an business. XXXX. full of the our second serve providing overview outlook segment discuss update IDEX they the We of Then and financial will in third will IDEX's year results and performance and for quarter on with state Bill markets begin the Eric quarter

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

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

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

Eric Ashleman

achieved IDEX supported second delivered everyone. XX% morning, good the on contributions record outstanding We each by from our double-digit sales in results growth of operating levels, and X. Slide organic quarter. Allison, you, segments. Thank I'm

over at to in fully levels, normal EPS strong growth to record our return backlog investments. by momentum We described second the sit a us as XX% momentum accelerate ability QX. $X.XX, improve as our customers. Core IDEX adjusted we an to continues environment. delivered I throughput invest even prior second increase teams allowing more Last discretionary XX million, continue to spend be quarter, chain profitability the into execute quarter. teams record in levels supply quarter our positive grew year's we That challenging of their now Our and and deliver our to best continued leveraged XXXX within to how of for

decentralized operating required speed of Our drives which to the impact agility model, the point and the outperform. to us decision-making customer, aligns at close for

strategy gain a equivalent and price pockets rate were across share times continue we Inflationary trending differentiation. for spread committed remain, capture pressures priority with the M&A advantage decelerated, deployment we competitive in increased enabled of We capture company. and us. lead to the our price and back our expanded Gross top capital Our price/cost increase towards historic remain while to a remains but levels. our

acquisition This within KZValve, on business closed agriculture to our complement quarter, we a the FMT. of

Our support continue in style our pipeline and to opportunities strong, of evaluate competition. that higher-growth is we markets

continue to growth. our can our We're across healthy organically deploying capacity and put also and we drive efficiencies to capital are to a portfolio confident to sheet have capital We support operational that increase balance work. our

us to to that continue in and make strategy. resources engineering investments We M&A on commercial, enable execute our

enterprise of with long-term create shares deployed remain of intrinsic disciplined million IDEX our quarter, to methodology a assessment see public valuation. value our $XX we stock. During and our and We IDEX to back the disconnect increased between shareholders when for buy value share repurchases our we XXX,XXX

any year, interest some Lastly, second but into geopolitical and continued of us seeing rates, our dynamics of half head environments. major XX% in near-term second the commercial in the present and an all slowing yet within consider as signals our our quarter, increase Board for the Rising uncertainty approved we we're inflation not dividend.

in to our good continue sight line days, the and strength see to have we of end XX all markets. almost next We

IDEX stakeholders. but agility to for let As technologies, we turn strong diligence me it's With IDEX Bill I'd it lot positioned been over look as in that differentiated all any the this well to like market half teams outperform they of, work, to to first have our around proud discuss globe and not execute across the during It's short-term industries easy the we is our volatility. and financial hard portfolio serve environment. to be overdeliver confident our their year, a and we're really thank to of for employees a our of our results. that,

William Grogan

I'll up America's XX% start FSD of in and were strong consolidated organically. X% results Slide million but on orders Eric. with orders overall saw North strong financial growth XXX HST our in experienced QX dispensing driven Thanks, up last FMT, orders We year. contraction received by and X. replenishment

overall double-digit of experienced up with organically. and sales Second We across segments. million quarter XX% up all increases $XXX XX% record of sales X our were

Second margin up Adjusted basis and was basis XX Nexsight acquisitions impacted unfavorably by KZValve margin XX.X%, Incremental prior operating to was operating to compared points. basis year. margin XX Airtech, adjusted quarter down operating points. XX XX.X%, points amortization related

in EPS prior resulting Adjusted XX% $XXX up $X.XX, net was of adjusted quarter income $XXX million, over of which Second net was $X.XX. million, an EPS or in year. $X.XX resulted income

availability the Finally, leveraged take million This quarter in share sales year free competitive has the XX% last accounts the to challenges increased well as by as was to as driven net versus higher in levels. $XX supply reflects a or of adjusted significant inventory flow Inventory market. buffer for increase receivables tool and elevated material income. cash chain

lot the our down plans to reduction our second time are a positions with half their We and inventory teams targeting bleed the of year. have reviewing spent in inventory of

the Moving our of drivers on to details operating adjusted Slide which X, income.

operating income compared $XX adjusted last to quarter million year. Second increased

the levered increase. organic approximately at our million volume on Our rate. gross prior well contributed growth margin XX% $XX through flowing year We

form Price to of to our margins reinvested strong portfolio. additional accretive M&A engineering teams to $X in inflation commercial productivity, and the drive Our accelerated operational activity. we headwinds. towards support trending mainly was experienced positive is of We and and and historic the levels. had long-term million, to drove offset resources our growth million resources, cost across price We $X mix capture

by discretionary $X last million spending versus Lastly, of and million year increased up $X quarter first the XXXX. versus

the support teams across customers, products our and globe in-person marketing innovation. Our investing are partnering our with to back to actively

rate, As we we look sales. level not We've of second increase expect half ramped spending ahead on year, significantly now to of the the higher pre-pandemic sequential do to but our this continue. to

a Metering for at drivers last the us Technologies Page reported productivity our dilutive flow-through and but most organic respectively. segment, & negatively like incremental with The and strong year, experience experienced sales orders of and was the of points growth increase versus flow-through to set impact Volume Flow-through margin amortization of expectations strong main organic the XX. I'm to then of adjusted to is XXX that, XX%, acquisitions. lowest operational Our XX XX%, a the flow-through increased year. Fluid look beginning deeper margin. were with to X% in the by line second due we likely will rate and the quarter year. basis KZValve operating FMT performance. I'd impacted and we of included With favorable getting XX%. Nexsight In of the segment acquisitions the basis on both at price provide a FX this expanded operating costs leverage, headwind points we by adjusted related our

few demand quarters. Our quote activity over the stable industrial markets last consistent with are exhibiting

water projects applications midsized petrochemical to small coming well. The the integration are our to to and as automation is Farmers is going seeing Agriculture drive our to conditions precision and business. remain at to on are battery productivity. favorable and in track. inflation production. project tied asphalt KZValve mining, and oil gas lithium-ion extremely experiencing and record our and continues We through well look in as Market in Banjo ag perform technology well, markets municipal

driven We strong and a optimism, and initiatives. funnel government ESG continue funding to by see long-term commercial

to strong activity sustainability. a demand supply to investments energy experiencing and side, see are upstream providing in bump the oil On chain prices Midstream price long-term due our markets have support. healthy caution yet constraints with customer

orders Moving adjusted margin impacted quarter basis of organic Airtech XXX operating and acquisition with XXXX. & second margin on the performance to Incremental amortization XX% unfavorably versus to adjusted commercial organic XXX points Health by up HST Science/Technology. XX%. continues by the contracted sales Stellar operating points. up related basis

investments. strong science, analytical by spending on continued Additionally, performance. trends demand partially material food instrumentation, adjusted by Analytical experiencing and semiconductor for margin to secular costs, and pharma demand. driven and and biopharma is market The continues instrumentation cost, diagnostic benefit consistent discretionary remain HST price volume next-gen operating life sciences from results leverage was life strong processing core resource markets. increased within and growth positive market employee-related offset strong sequencing instruments and pharma and strong

we growth, enabling gain see continue but our On pace. a lead the across to competitors, semiconductor at offer been variety to than a We've applications. able share times shorter of side, slower

businesses our We businesses broadband satellite strength growth and optics in continue industrial FMT our the tied to strong to to see in technology similar results.

aged sales product turning as with spending employee-related driven increase on backlogs BAND-IT. OEM contracted the last year. Safety/Diversified XXX offset by points This well more contracted margin an the were side by automotive higher Finally, to higher of FSD versus volume to organic being pressure second and price by discretionary our more exposure was strong of XX%. on within due content than metal quarter by costs X%, operating & adjusted with cost basis and segment. fire as but Fire Orders

address XXXX have through will the As backlog. taken those the we our action pull increases improve in in this calls, expect of half to second we noted gap prior and as price/cost

American project by BAND-IT paint performed and and strong business dispensing results overall driven automotive across oil of delivery and gas global market. industrial, Our the markets. positive well, an had North volume

share customers. for Safety, continue market we with with outperform platforms. the EX side, capture see downhole due to automotive Within we & demand strong the demand Fire market In tools. capture are times we new material availability On on rescue shorter Energy, share our seeing our and lead to and strong

fire to which side, European supply the updated choppy On With our starting an core quarter but are provide some American modest improvement. OEM guidance. results. remain I'll for XX, on we and constraints, markets Slide to our that, I'm outlook out due XXXX lays the like chain year and to third full North see

the revenue of operating to quarter by volume price are is margin approximately forecasted For cost, leverage. XX% to organic second versus QX lower slightly of op growth offset up XX%. seasonal projecting X% of due third XXXX, quarter partially and margin we improved

range to $X.XX. range We expect to GAAP from from EPS and $X.XX $X.XX adjusted to to $X.XX EPS

Turning the to full year.

XX%. approximately year, in the confidence our expect of now raising business. Given first the short-cycle of third year This of for due full in our we our the the half fourth but reflects quarter revenue our sight of the strong in nature line organic some We guidance. are year performance quarter, to full growth caution

We to expect to $X.XX EPS between to and $X.XX $X.XX adjusted to range GAAP from range $X.XX. EPS

margin for be the to operating Our year approximately is full expected XX%.

net second cash estimate adjusted year. elevating back our to head previous half the from half our down free of is of as flow receivables year-end as expectations bleed, this With revenue income percent expecting balance inventory slower-than-expected to our the guidance. are and year, for range our We of best a the from XX% into higher we a XX%, the

cash be for consider let our volatile your generation external and it current that, shift turn to operator over the questions. guidance remains goal versus pause a structural long-term to of a the me XXX% With capabilities. and environment reflection in the Our above

Operator

Instructions]. [Operator

question of Halloran Mike first with Baird. W. from line Our the comes Robert

Michael Halloran

deterioration. a and not well, are anything that really with you're start that Things commentary said in the from comment, you the let's of yet terms end seeing can market you hear certainly going So Eric, you all guys don't outlook bit the quarter taking that that the business fourth then you're you little gave. of balance into cautious outlook a with know. don't given what short-cycle know And says guidance more you and

pace, this So be for but and portfolio things competing and love are be in decelerate, say to the things to you're contrast, just things what looking else, your talk to compare something maybe X about maybe going those could could BAND-IT kind all that business, of would -- keep that stuff?

Eric Ashleman

thanks. Well, Yes.

what well. that system have of landscape. I the think feverishly consumption very, in the actual industrial cycle, industrial post-pandemic we our those at this really working So recovery And the the in to really, that's whole I up that's just to is to mine up. been businesses held there shortest close try looking we're businesses. on out Those going the the mean, as catch canaries story to coal industrial are are that's more refer very always

and of always sends if things there's start looking indicator up So first weakness that is come that, see you we're to a an for signal that. after us, something there that see usually at to then

at point few And us as in indicator across own far, in call, pockets with sure we short said sort there's uncertainty, of tilting a into how sending some have of recovery many the down. about a indicators it, that towards side. of it's that's places and overall us this -- a the but confidence comments, ways, of and look of things. a of That's in at bit I we'll has future, And that of backlog we on business. where that's and at people always more so term. then cycle more gives that talk But I story in that than just of the an the then a course, on kind are overall, and markets host we And short support then where adjust of mean, for of traction in all couple that to get look where this we've top holding seen all And the it's those the slow I'm we're our other recalibrate of we'll cycle. those an interesting the in. assurance out of it whole a future further project balance keep there, exposure joy the whole business struggled least

do quick. that can pretty You

William Grogan

percentage to frame just mean is that, deceleration a And QX. our guidance, X like, kind implied I sequential of in Yes.

have to still back bit to going and of strong. is there. small, our we potentially So of the confidence we little line order be But think could the a just it's really that noise patterns, now, be sight in out right half what

Michael Halloran

lead the sense. in? Maybe backlog makes the come more bit the you said through the a underlying a -- strength in that Is that talk I quarter? $XX by built times And that million, are that like No, piece. seeing Is think backlog something you little quarter that. of reflection about extend order just

Eric Ashleman

kind and mean, was a at to I see if it's broad-based. it really of day the chunks, kind pockets layered not. across lot looking other I mean, it's in things. of We're it's and of

are made there are advantaged share a holding are pockets that decelerating. that I times reducing where to lead go some some times giving Our or opportunity mean, aggregate in our we lead us we comment seeing grab some frankly, are in things.

the on the say in doing drive direction. not we're build in So I'd And balance, anything broad-based. to very, very direction. going that backlog is right It's wrong the

Michael Halloran

me. question Last for

You a healthy that to M&A M&A pipeline? environment reflection made know Is a invested I on processes. challenging you pretty more a gotten that there has accelerated support of little a the comment side. the

could what those you're you. what investments So I get hope understand would like to seeing you and

Eric Ashleman

pretty through work this. well our sort Yes. deliberate a held up those on I we into lot I'd say go of very high-quality our frankly, to for the to want we've deeper, think as But look, is insight applications. concentric surround say of best assets is our into I circles this -- part that environment that mean, gone

can, up sure in there's a analytics resources that make an well pretty we're work is in step-up for third-party doing to things it as so in that high-quality So assets. some understand purposeful as far we we of both that type, and environment holding with well

Operator

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

Deane Dray

the with we're towards the in to resulting inventory we idea getting but there. pretty with expectation free guidance and demand this This sector. seeing then start carrying the And could year-end. cut across likely familiar, all more be higher flow this buffer receivables of the look, Maybe cash is

math on us down? get math through we expand to works. inventory chain frame the the So time does for Bill, way the the really it on depend that. just take the guess But But can begins how the on you supply normalize. I bleeding

William Grogan

that's think exactly I No, Yes. right.

lead chain. side supply on our are we're just sit broader that As as we the starting of times, across talked now about to Eric and our aspects here see improving,

purchases customers deliver some the So increased continue is shrinking. times buffer our longer to to our for lead to of

with that system. through just up it's our Now our catching and getting production

we first quarter, material but decreases into of in more as next year. at the leading will -- look So improvement, part fourth quarter some there be third the

down So and in POs, of are lead time again, drawing from what the quarter we've the spent a half progress their through the and open have lot the to with first and robust we capabilities as teams still then and of perspective around the then the back calibrate having throughput that increasing and our time maintaining vendors we this to measuring understand our a second year. as here demand,

Deane Dray

where on anything inventory shortages, at that Is your they're all? is goods, to that's nearly product adding on there waiting -- Is got but particular product finished issue a your semiconductor-related you've inventory? an

William Grogan

customers Yes. receipts. some have we've That as suppliers then produce held other to is them for capable their a is haven't of component up who had

So we a facing have our suppliers. we at are because had other customers finished with level issues have goods higher than of historically

Eric Ashleman

that And our general, to that's half nowhere production we in kind it. of you things. enough, something of we most unfinished well the you quick often rapid so waiting produce asking all you're extent a it we off pretty businesses, our maybe, factories turn something put have flow do with it's maybe of in it you better And that doesn't in not how also piece I don't is done, really just our I that's to process quick like build because it one world. because our starting see but the things I about see much you part, were Dean, on mean, -- completely or auto were own that have devoid wouldn't think say environment, there's

Deane Dray

helpful Because there. they've up where That's all need lined like and... these that got autos, hear for you color cars still the do semiconductors

Eric Ashleman

something because the schedule of we'll make a XX of hours, kind those in a put We couple wouldn't things. build of pump into or them

Deane Dray

for of the asking about question projects. slowing on are question you macro, of kind pockets to he's begged earlier Last me, said the Good. when Mike's Eric, there you some

a we've really made It we of of kind confidence. not of and midstream, where of I full and going they -- you say hasn't to get? ahead? getting move describe absolutely, realized CEO think of going So what you that. kind of to just a plenty reference slowing that's heard Are reflection or projects these were prices. you But to release given oil how some you in just the spending would pockets and that thought

Eric Ashleman

probably a Yes. say or second out. more of while for of release the line, been not getting the or about get the we've some and coming projecting on these just something extended category, not now thinking I'd

So food the A specific the things chemical interesting then you I in category they're midstream the markets the indicators, And side places there's really say cycle here exposure, replenishment watch. cycle markets, a bit our pretty on things I good it's is this paint they're isolated. never area. dispensing few just that. of of maybe would European a I mean, took expansion, mentioned massive a in like but industrial just some business, part side. big coming been of off. not It's to there. over in end mean, than the just We're off more our pockets And elsewhere. little kind

nature inflation the the later to math there work the it of bandwidth those energy into bandwidth for of the these Maybe then of cost all certain the was Can back or now where of of is go the -- in recalibration kind run a projects clouded the to some it, in factors. creeping sort Uncertainty and of back uncertainty. bit, markets of and in have anybody causing issue is the with here still on recovery, a together in materials very it's think a turned it? kind beginning, again. people and innings I The and issue. time it put much

Operator

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

Allison Poliniak

it does by Keeping in vertical you're project know point like it talked weighted seem verticals, towards any broad-based specific but with a is that geography? very at in terms just Or line what I you of comment. seeing? this

Eric Ashleman

described say, the energy than suspect call side, geographic things Well, I side, people mean, more mean, positive terms watching in bit if are I we But reasons North I would those the we to are on geopolitical I positive American America for the both in there bit North more little of Europe for way had Europe. are terms than a side of I'd on seeing strength us. say just all broad-based I things. it. would a in the the But it, I think

Allison Poliniak

and just the then to And to just to cash free Great. back that in of general, tepid the CapEx start flow $XX kind going of sort approach million.

investment emerging then of in I next that and to just still Banjo year of right those that risk Or about talked because uncertainty track? you on gets markets. mean, You some kind the do are now? pushed of

William Grogan

this No, increased back going later Banjo year. to in spend We're quarter, I China the quarter. then the half. kind to India late is open and that's And expecting the of third fourth early think what's both facilities drive

projects, supply things, in as there's first we chain smaller million the million -- $XX are Obviously, that. that's $XX ramp have delays half seen So a I back million pushed of Relative to to and the the on second. the half from ramp, $XX subset items spend track. some -- think, those

in there's number. couple the the play that a for of little that So we're next But here will in bit of those large hit confident months. ones,

Operator

Our Melius next Rob Research. Worthermeier the line comes from question of with

Robert Wertheimer

if your versus I there's and any how of different interest pricing not? big then higher? funnel are repriced And as on bit market of the corrected and through of a feel question parts different know don't more people about pipeline the process Can I like and adjust little as is prior potential My the standoff you'd from is you get is M&A. on or what rates kind comment there, whether periods? edge to out sellers are kind don't just whether things you just know -- talk make a

Eric Ashleman

Yes.

is So work in doing. bracketed mean, this before, the and bit all I we're as by a I step intentionality that said up

a respect, that we're of having. we're lot in doing of conversations lot things analysis we're at, of that So again, looking and there's a lot a that

has work. just is of where You would that level driven been, activity of say much north -- it our our by it

conversations, definitely have, like the and those discussions and the near-term to there conversations in the out forecast all extent than much see is what's for sales reasons been more back with to you it the probably more Now all the that around you'd intense do prospects on suspect. links how tracking and you going valuation, it's just has

have I especially looking well and path, sharp, though, the that's Bill if we're looking of strong And generally a at, quality look at said, that you're As when owners in kind very a picks history positioned, at always projection then that the up again. assets ways. of reasonable that driving you're we

sides So see it. be to -- that that doesn't get mean that and are able both through going to

we're at. our but a nature is perspective the very kind looking assets term in that always for that's long of possibility, So

that a sides ideally confident quality, of it's So short, with activity I engaging more lot on and this more long engaged. of us, that all near-term kind what be story then just both and part, a stare I it means strong deep see but the horizon which breath, stay where for think discussions people over around going a means go, think funnel activity, take and our way to for

Robert Wertheimer

so guess, I uncertainty that if on forth. on up I can, the And follow Perfect. and

backlog to if bit give us willing triangulate the cetera. currently. is on I look a versus help doesn't a backlog stands on there's any touched levels, the that don't seems everybody more of know future prior You where you're It don't but uncertain versus future, earlier. et know will if cycles or I standoff record the color a prior bad and about backlog bit? your that

William Grogan

of what go X/X the to close definitely. sales quarter with got kind our backlog been a We've in of of now. XX% mean, has into And normally, quarter No, I it historically. Xx backlog. is we'd

short-term any visibility more lot dramatic falloff. a have we to temper So

relative again, confident the we're of So couple fairly numbers. next in to months, our

our would I in huge backlog think So don't a decrease pause orders. any support that short-term there's because come could

Operator

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

Matt Summerville

a of to With can respect in realize incrementally half? you on price, the quick you of much I top that questions. then how Just year-over-year? realization And quarter have you back were where a couple second on expect And price to follow-up. comment

William Grogan

X% in don't little the out here what from guide the little price, leveled balance confident a We second really gone have to the first which ramped X% off. combat but have quarter. quarter, over inflation, with a in the in we're seems which over to the of teams We're year

that our profile cost So to the support I mentioned year back the our half we have an to price expectations. expectation to going is continue improve of of through some higher-margin

Matt Summerville

does some from actually that certainly have In but off-peak. in historical P&L? commodity certainly of markets, steel, copper, elevated certain areas their incremental to to start aluminum, When of metals, the still benefit things add come your off highs some standards, materially, pretty

William Grogan

couple direct through that a have couple phases are things. businesses -- that exposure say of buying to that value we I only level, From we're would components a stream. of have a couple a relative of prices. to One, commodity materiality

way price Again, did. a we X% obviously, that increase impact we're vast other price inflation companies in cost the have of the building. didn't on So positive, is lot still and

So think, incremental we gone the will increases it material will, we've keep that out surcharge. holistically price over we've be but Again, all time, will versus pricing with -- I impact, wean a out that had.

like positioned forward. So going here we're we where

Operator

Vertical line the from Sprague Research. with of comes Jeff question next Our

Jeffrey Sprague

of indicate activity on little Does what's level of heavy could new of of cultivation, Just pursuing what of in maybe that. really going Maybe said the to tactical back more activity efforts? being the a deal internal resourced this on Have teams? deal and any interest elaborate on in come we you color strategic a on can you significantly kind Eric, your right, you function up kind of bit there. adjacencies?

Eric Ashleman

Yes. I Never center-led we're not massive a organization. mean, kind of have been.

third-party So that outside engagement more mean, we business side. And biggest of I overall of years. of on few for well-positioned now something than is it's of higher a shops. from great we've the business. been from well-deserved a And it the on institutional sort is ads execution headcount combine to perspective. dramatic a growth I work we're this focus couple probably is might our frankly, component top to the really outperformance mean, this driving then just level a sound doing just

so lot a of it way. that And is

left we're in. that circles know concentric what I back where of know applications favored. the always of looks what's We or We around sit we always like, it this come for mean, starting work terms should environments slightly kind of these really that really In these understand right well. looking we've the to to I make currently right we've and of the to or analogy into and The company that. us, where examples market would a do we move perfect acquisitions heading, are that. layered is this we me how and of is recent best left

As said play, in maybe we're would presenting the about in we of before, new general some flank world and are and could us and up IDEX the applications a where to broader and styles open thinking are that company. like also competition where problems for themselves come that

it the lot think do way But of well. the from ground radiating we you of it overgeneralize a from parts more like So That's it. the of that's circles if mix think as as with to up. and just really the to best had it in the intensity, company of it,

William Grogan

Yes.

market the that deploy highlighted, to is the funnel much an applications, depth ability we capital are the high. why probably of at a main quality more so that Eric Like across confident actions, the done has progress. our those circles concentric those as team one and different end and variety we work all-time that in think consistently of reasons of I

Jeffrey Sprague

Great. the to dynamics are actually mean, hair an times -- to I got the shipment happening deceleration? are just trying anything kind feel the And order canary some these this snip maybe coal mine? issue their of and the supply that unrelated, in out everybody's the dynamics or kind just back with ground lead an Any improving to earlier economy. gut anything of actually of in the And precursor that

Eric Ashleman

back that's acceleration because any a It's just though, the say, hot mean, going material it's inside noticeable I feels question. as of pretty it others to just mindful. that, impact running in the that's even on business. us from call catch to the actually have be level. not at than thing a peak just, planful, conditions, maybe we've as such at for well. that many deceleration a okay, same for know it's bit can good it's But how tremendous the more feeling We Pulling abnormal. a been us, don't been and little I in ways, more we've We if a it's way, breath. That's can simply that's hard levels. in broader And a is others economic

since those get but we I don't else let's in as more say, of then it quicker. product can terms of see think it So there's indicator that. do, to nothing an

Operator

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

Vladimir Bystricky

us just seeing a can some distribution, of businesses slowdown? potential to terms of ask, you're I about the you more In in inventories and concerned any there destocking of and on following color event where are your give macro-related through in you're So a for up that these areas go distributor whether hearing kind wanted what on questions.

Eric Ashleman

Well, shelves. inventory a we always reminder on of that question replenishment, customized of of Yes. this with a preface configured kind products which quick means have with ton lot a I not our

it's some number. got will at we've visibility to minimum. a say I of sight good line small So

it see visually you can them. go You when visit

wide to well. It works that pocket SKUs can components slight if on of the it it's some product. we see think applicable in In our increases time, world, clumped that while really I more there. ultimately out it business. in ways, of a a it's the over way takes for that's deterministic that chunk. pretty similar bleeds are out None of as around because of if variety own as there solution you or a flow off So some assume that you our stockable just made call standard would would our in a big that

be about a it is extends from usually numbers impact as of overall. we It's honest. a think time to giant a So math, not an horizon. more But kind the indicator of mainly for or piece of business, health it to in up of down, the IDEX, large over and a lot lost the meaningful just it

Vladimir Bystricky

helpful. That's stepping then back. And Okay. maybe just

back into inventory about talked your you half competitive So to But the has advantage obviously, the down you. a think, and 'XX. over here bleed availability been, some intent for I

in any you bring recovery? gained talk advantage to you're competitive the inventory So what confidence seeing through about can gives without own you've availability of down to chain the that giving and terms of supply up the your logistics you begin that

Eric Ashleman

I -- are Yes. fact-based. impends Well, of some mean, the it

our their times their and see can us. suppliers' lead -- own we and to performance So our delivery track on-time we and

bit first now, you of can "Well, and the So our where been say, The they astray. some part a on loops we them run factually kind are year. when teams are the start at quite they of frankly, good logistics basically And better than improvement." there have really navigating see

thing inventory. I take anybody in ability go you got biggest breath. we're a ways, I a that is, to tackle throughput, some energy that to time, to buy advantage is say recalibrate wants for the go stronger of think and would the actually does this to attack momentum, and to executing take what have bit the do which improved of systems, as us now space us we've back and and to little go you here,

desk. You've part signals. on -- laid got the do out go to you paper lines demand across That's change part. it by of It's

energy, based do People and can that making work fact-based patterns of the Bill to go happening. talked calls to and of the -- they are kind of have the time and see, with stacking that's so engagement our on teams, XXs making sure our And we're it they advantage and about it. is kind taking and racking XXs

William Grogan

And then we it's have some And areas a take competitors. been have smaller position shares, because to that vendor. allocation able our of higher some with the of XX than we're getting we an

their to material availability, So don't we're the and able volume. if they take go in have

Operator

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

Nathan Jones

the you that on the a & about can a on at strong driving a extremely outlook showing business have what's a seeing with Everybody start detail those? Health growth Just economy just Let's you less orders. color for you're any us that and What more that's is question there? growth in cycles and Maybe these Science you that that's Are bit going moment talk specific there. down and the around is for still give business. product strength but cyclical continued the more can duration? up on the focused organic order

Eric Ashleman

very the mean strong that much it. to I for described you here. way tied out going we're to, quite Yes. time exactly I it's see trends it's think, mean I run some

sorts into and -- we everything components else application of drivers sets. So in like all and it little break IDEX, specific we down

decent is well of analytical very, space a instrumentation. COVID ones been going sorry, the space very surveillance. business the healthy. And of the that has lot That's Some of initially -- there, involving are the COVID is AI genomics active. part that and A then

for and were and I think it out has there of study. that technology entering targeted all pandemic kind now We're seeing taking and always the field of its some on more now things things targeted some applying that third around as that of year. for moved medicine in the like work

have those been well. as healthy So

for of well things. as some have COVID continuing isolated the as on to stayed do continue strong to things as We vaccines we work targeted that where things vaccines and nature they're and pockets that that other to like support both different duration for

that of a lot and So why it. we the have talking of are about it's long there, out definitely we it macro known investing most in and time spend picking and up it's dynamics trends

Nathan Jones

of gross a Maybe around company maybe with of with. impact all gross gross margins. lead or are have else efficiencies you range. obviously or very that one manufacturing plus there supply the mean on expand that seen industrial been years gross could strong margins pretty Is gross cost but margins? within opportunities modest consistent negative in maybe to COVID to chain begin that you've an the price XX%, less over for few this in away to margins see disruptions related I to that you They've that margins anywhere your last to minus kind in go higher

William Grogan

you margins, XX% a Yes. With excess to have price/cost. cost No, I of been that the think gross to pressure expand. well have has spread biggest price in

has that our pressure. engineering resources, we that number. which remind So gross And put then to is invest constant to included everyone, margin continue in in

So productivity across maintain portfolio been the headwinds. through of those robust to able to we've offset some

be difficult get volume Once a stabilize we on getting perspective, cost price we to bit to then think our do the contribution able back I levels high historical business. our So an and have continued increases. from too we've the that margins productivity across With, has we leverage we'll little operations in operating point. the very through is little historically pull have been portfolio ability able in, discrete been the some we've just to another projects that been again, on environment muted bit here execute to a

get things So normalize, we'll that. another I think as kicker of off

Operator

comes Capital. question from Loop Scott next line Our Graham with the of

Scott Graham

where was CapEx? versus from idea one a quick guys. are you sort give I OpEx can have for Congratulations Bill. us an Kind really quarter on running of what one you of of good your sales

William Grogan

goes talked our a of that bit earlier. the internally. part little honest. project at look about It it business. We not comment disclose be little It's huge externally really to don't to a that Eric We don't bit a

CapEx, projects new like-for-like, and creation. to number. of our holistically, would things plant volume most market some our that overall, it's I So relative able material share have incremental then current with say, OpEx, be IDEX some expansions, that are we specific realize we gains The not But we an to replacing portfolio, have. overly plant would

our would short the holistically, more OpEx-related be, on sales. So answer it's

Scott Graham

Got it.

talked the it bit. half Is back, does to second of just I'm quarters the now it weaken orders, little for dispensing materially understand means comment -- in There's triangulate does maybe look? of look not? I how half about want a X this should the or non-repeat talks better back, to in quarter a year. you How the second that what deck, trying dispensing now fairly dispensing now So year. about maybe

William Grogan

sales those have growth with line have but the fallen third, in that third pressure of the quarter they'll our the we bit of finally in orders I pressure quarter the the replenishment fourth to year. it's kind continue think expectations beginning I a with had second sales quarter. the will post mean in No, more little off in projects at in

new on software So technologies in wins still having side. the Very markets. launching They're global. a great Still business. emerging

So the business grow. to lose continues although they're going their replenishment, core to

a its been roll of opportunity the span, and it's pressure term here but growth. in as bit projects those through software of over short emerging lots additional life little So markets holistically, cyclical But off.

Scott Graham

saying of are just you with pretty having could changed good particularly anything in business, squeeze chain still I guys, this beachhead if the now in quarters nice an your your customers it's they're restrained. you of little Europe? the Could where OEMs, us the a idea as last give for couple where on that And a last in goes couple the supply that it. one business there Has next Got fire pretty of quarters? business

Eric Ashleman

say still of challenging, a I'd say still that kind in that are constraints jumping chain the are in. supply the folks job specialty the fighting that I headlines there, and there, still medium smaller will decent to Yes, players there's some of larger space done have that.

remain business technology. the us on in part that of really, not focused So biggest bit, really We a the just that's helped market.

So there's do help come can the side. we to will supply only Eventually, chain to that place. better on much a out so

been ready water As talking path doing got nozzle thing we've the in same connectivity pieces got diagnostics. the have we now but mobile it a on all we the rescue of not that piece. does, about, want that we've the automation in the with and the to platform, be that's only tools it of We're

global show quarter. got presented in good really things really, the So giant second there in a we've some here just

headline of to and So we longer-term kind start think will that ultimately in us industry improve. the is dial an that for on

Operator

of line question the comes Mizuho. next Linzey Brett from Our with

Brett Linzey

orders. the back to wanted come to Just

for here? So some even as no the can the more think mind? do anything growth is you would second you in I order year-over-year July inform you strong, rates the underlying half orders and stack basis. very X-year advanced this that customers encouraging your quarter a in run or of longer on in ordering expectation mean grow are backlog What

William Grogan

versus highlighted dispensing we've material little at that still third that of from visibility. We the Obviously, much comps. we'll a have experienced tougher from back But pressure half, In we've quarter, positive. continue. And still here perspective, trends no portfolio. an overall, the be positive will we perspective, changes least bit a IDEX the across got organic think the relative July to

Brett Linzey

accretion just performed Okay. what Great. how stand-alone then for you I within And are spend basis heading you was the on calibrating And relative into KZValve could year? then the this a hoping that acquisition, moment expectations? guidance a close on to framework the for

Eric Ashleman

Sure. let the state I'll cover financial the question. business, answer the of Bill of kind general

a ag mean space I strong is It's acquisition, It Banjo So far process. integration strong within franchise very, has that our close been in to a very the really, complement away. very really conveniently FMT. not

our in it. Europe. teams both as America And agricultural have strong It's performed have really businesses and so attacked all North the

of the And everybody the strong the one the technology so speaking with the and same supports is ways, on some linkage business, been, so integrations and in because broader easier is in the has same this page -- it. commercial market

on gate. of talk let and out strong very the long-term I'll specifics. very, So here, Excited Bill prospects about the the

William Grogan

$X.XX. to $X.XX half, back the in EPS Yes.

Eric Ashleman

Yes.

Operator

of comes Cowen. with from the Anastasio question Michael Our next line

Unidentified Analyst

Congrats the on quarter. strong

for more internally the they What obviously, are impacting seeing broadly, those to the start initiatives types if business? of prepare deteriorating. you're mentioned macro you data You strength but the doing macro is points, ultimately,

Eric Ashleman

that. for thanks No, Yes.

these of we've mean I So seen cycles a before. lot

kind of standard at have look we We way it. that a

none us, called came for would it. off We've with that looking a at almost times lever the spend. discretionary of -- a think out be I because base few first we

going with we engaging out to shows. are trade customers Now

a frankly, over level through discretionary couple years, of make we the So last much learned lower the elevated bit. know, would with it's first anything a we That if it spending. of you lever. be But can

things here and were cool actually opportunity think off mentioned, a a for productivity hard bit, factory look across As I If at Bill there is to an we a pretty setting. are working, in a how couple bandwidth ago. than years have back lines rethought been flow they of on team's different perspective, positions may got is product where some how different the

one little there might So a next. area that bit we The be go different.

I on talent looking lot even still a we're today, have The for real. -- side, been is on headcount about we still people side. war the is it talking We mean people. on the have

Some work that's mean of labor. but area. the I it's harder communities recently, in we pressure still -- here to find it's more still been live that and improved there's in,

nature probably on would the and would about choices, company given long thoughtful the along that's growing have area, the all make we things dynamic, most we So be investments and term the the focus familiar say The -- that we where to playbook process Anything, there? Bill, that. the never short-cycle a at get it's run away us. add And us it's you'd pretty Otherwise, way. helps far it fast. so I'd for

William Grogan

they said you It to I little No, expectation is have been a think be on for relative decrementals that us our historically because profit at current war talent bit and least well. than of the levels -- higher it Eric will highlighted.

been We're in of next So pickup the as here have maybe the we progress over historically probably there's XXs. would low closer couple here slight XX% we to quarters. if a

Unidentified Analyst

helpful. That's really

quarter. I I know had the from more, What going we a but seeing orders forward? perspective may. mentioned Just past one cadence if sequentially over are before, you declining

William Grogan

there's I our quarter, from Yes, lot our first of customers. generally get think our annual we always a blankets

relative sequential inflated the to generally it's profile balance of year. So of the

-- to So real QX the that's driver QX. the from

the month an kind in sustained our order just keeping it's now, on July. which rates, of off For here leveling have eye us with of daily

Operator

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

Eric Ashleman

rally we've We're joining at proud I "or" working execution, a here, a our tactical and times, over trends then performance top is value we close, take and performance to thing be the one great I we're I for earned that it. are very -- that really I'd that forward. going want as we're reputation the organic today. the really drive to just complemented as with Okay. those few go it's "and" that our think, bets half We creation guess And And by efforts an basically those. haul. for here deliberately really deliberately align long away as Well, we of inorganic We around good well addressing I the to not we'll growth thanks, in resources mean here. We're picking outperformance here additive times, component to to investments, continue of that times. on of first IDEX. of And seeing that today. difficult really, spoke do do I the long, really, everybody, you as macro top story

that play the alternative So I seeing out. it acquisitions we and We're think be. in you're space or that in can celebrate it seeing ag out play made water solutions the precision what energy pneumatic or

So you're today. want I and your to we that just continue interest very X together. of the Thanks additive talk things, forward. in as about those move that we'll seeing highlight much component come to joining And for

Operator

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

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

IDEX (IEX) 27 Jul 222022 Q2 Earnings call transcript