Earnings call transcript Q1 2023

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Operator

Greetings, and welcome to the First Quarter 2023 IDEX Corporation Earnings Conference Call. [Operator Instructions].

And it is now my pleasure to introduce to you, Allison Lausas, Vice President and Chief Accounting Officer. Thank you, Allison.

You may begin.

Allison Lausas

everyone. morning, Good Lausas, IDEX Allison and Accounting Chief This Vice for Corporation. Officer is President for our Thank IDEX us joining you for XXXX highlights. first discussion financial quarter the of

financial press Last can issued XX, be today's company slides XXXX. along our X release to and release, March operating website press accessed the outlining months night, on ending performance a at webcast, our with we The be the for during company's idexcorp.com. presentation used

IDEX's Officer business. providing are and second full year Chief in of today Joining results of Eric Grogan, we performance the financial Chief Executive Then the markets XXXX. and they quarter Ashleman, quarter our and our President; me Financial Bill the discuss will first serve update our Bill for begin segment an IDEX state and Today, Officer. with Eric on overview and will outlook

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

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

may a Exchange Commission. in the contain begin, This with subject and Securities release filings the night's forward-looking brief we and are reminder. press safe statements that Before last certain language call to harbor in IDEX's

Eric Ashleman. now I'll our this and call that, turn President, to With over CEO

Eric Ashleman

free X highlights. segments, start positive delivered good flow. adjusted with morning, of some record Allison, and on all quarter and per X. share $X.XX growth like Thank I'm We across our organic strong earnings with you, cash Slide I'd key first everyone. to sales

IDEX offsetting our well, segments strong historical FSD performance. record pressure above was performed HST in and some achieving positive and both and Price/cost FMT Our exceptionally sales segment. profitability,

concentrated inventory As within changed. the anticipated sciences last from volume year, ahead OEM select has pressures short-term QX a to life outlook few spoke, in The balance customers. we we calibration and the our of time we look

prolonged we markets. our instrumentation, through segment, saw we of centered we sufficient more still largely End-market recalibration within the have critical semiconductor a to broader, pharma customers our support analytical components is our their needs demand as However, but HST positive, and our progressed believe the quarter, inventory life science, near signals in of in term.

with years, over chain Over demand support supply XX% up robust strong past profile inventory the demand customer-specific HST, suppliers our cycles. the sales historical OEM X simultaneous the partners and and we with beginning improve organically broader in those are recalibration exceeds demonstrated to lead The normalizes, that experienced times. quickest But this end-user levels, replenishment. growth as conditions returns have to nature aggressively prior inventory pre-pandemic all and attacking higher of inventory sharp

tailored specific losing volume discretionary costs the We response, short In the of to offset our not managing cost executed challenges focus through proactively we growth this businesses a longer-term across individual well entire on term approach as impact. to in the but portion reductions path. our as broader company,

Therefore, of full our discuss cost-containment updates. Bill revised the as of our and XXXX These EPS $X.XX. top we plan, EPS $X.XX for from noted line year. the will in drive specifics our we greater net headwind guidance $X.XX adjusted detail our guidance release, press during in to challenges, adjusted year segment

over in Regardless ability total the end-market term. our to confident remain we deliver of returns challenges, long these shareholder

plan Our consistent. capital remains deployment

or XXX a that million. look value announced M&A of to Technologies for creation. approximately acquire end, as CAD intent source million to to significant XXX USD Iridian Spectral we continue our We To

of deal. markets. XX XXXX about And It is science low-XXs XXx EBITDA family the a revenues complements a range. businesses, Iridian fiscal in and is world life Iridian CAD serving of expands the IDEX margin telecommunications Iridian custom provided second optical space, we and EBITDA-trailing leader This the filter XXXX, million be solutions HST. irrespective in within on and the Iridian macro close transaction upon is our deploy on in our expected will our Fluidics remain the bullish assets to to within of solutions the Scientific beginning and quarter. capital ability conditions. businesses Optics of sixth high-quality expects and by the acquisition since

teams Muon to The there fit integration deployed value of continues our quarter strong between unlock cultural which be as our XXXX, fourth elements our model, well. between Group and closed acquisition, Muon progressing to and of key a We've work in our together businesses. is IDEX operating

last our facility India Gujarat. in world-class It officially sales to capacity our Singapore of opening element of effectively of our in state the China traveled Coupled our to in Middle Asia strengthened we late footprint logistics with attack the and I week recent expansion markets key in now East, of commissioning Finally, and strategy. have the doubles production across centers XXXX that to in a and the a Dubai, a our is open second country. plant plant and growth

turn I'll that, our financial over it to With Bill to results. discuss

William Grogan

Eric. Thanks,

Moving on unless on stated. quarter quarter results consolidated to financial otherwise X. against comparisons All first first XXXX, are our Slide

pressure million analytical pharma down and the the HST. semiconductor in project timing as life mainly next-gen and for of and markets $XXX instrumentation, across overall were by orders of HST X% dispensing in sequencing in driven Orders organically, sciences, down as well FSD XX% OEM

up and by by contracted unfavorable the This within X% productivity. of growth by $XXX mix, and was points. inflation, of organic acquisitions and margin overall HST, and experienced driven FMT impact of organically. and centered largely price XX% offset dilutive XX in our partially X% employee-related We basis XX.X% sales favorable in were growth X% Record Gross HST. FSD million up segments cost

to the margin, includes drivers XXX remaining down was points. related discuss recognition I'll on which the of XX.X%, accelerated basis $X adjusted EBITDA slide. share-based of EBITDA million Adjusted compensation, next

share-based and of which effective prior our rate was Net of for EPS was X%. Our adjusted million tax EPS quarter $X.XX. compensation EPS by $X.XX, I XX.X% relatively which adjusted of resulted income $X.XX. compared rate that or lowered $XXX $X.XX mentioned up earlier flat of was tax was effective with the XX.X%. accelerated income Adjusted with million, recognition was in $XXX net The

due $XXX cash operations and year-over-year up investments million for was versus was from $XXX working Finally, X capital versus to year. adjusted in at capital in higher flow income. XX% This have last included XX%, coming first and experienced investment, primarily which cash million, the year Free represents quarter, last of up XX% cash past strongest net we conversion free in quarter the years. the lower

XXXX. the details Moving of Slide million EBITDA. which EBITDA adjusted to of our to increased compared on X, Adjusted quarter quarter first first the $XX drivers

approximately at rate. through Our X% million our gross margin flowing growth $X contributed organic prior year

drove and productivity that and offset than we million, HST Price/cost by more in mainly $X volume components Mix in was employee-related to inflation. science our businesses. was margins, operational life instrumentation due accretive analytical declines unfavorable to centered

spending and Resource by $X discretionary million. increased

As did XXXX, year. of quarter. we in of the not spend balance the mitigation discretionary of this carryover our the noted will prior Equally, to progress ramped plan for second our through investment we come a the level sustainable spending year. last This year. cost we our guidance, as was we return In from until part down resource up as

organic through. retirement to had to participants accelerated timing of X% eligibility flow certain the million yielded We a due related $X status. share-based reaching compensation results These recognition of

of organic share-based XX%. compensation, impact Excluding the our around flow-through was accelerated

and adjusted divestiture contributed of Nexsight, we EBITDA. and flow-through. an FX, acquisitions, of divestitures delivered of KZValve $XX Knight million and Inclusive FX, Muon acquisitions, additional net the XX%

Excluding impact XX% compensation, the With provide a share-based segment outlook of I'll deeper delivered we performance. that, flow-through. our accelerated for

XX with discretionary costs we performance strong organic the growth strong impact well acquisitions. volume I'm as technology and employee-related spending Metering order points and basis and X% year, XX. of In price/cost, sales expanded Adjusted offset last productivity, segment, dilutive which than Page by on driven experienced leverage our and X%, versus respectively. Fluid more margin & of higher by EBITDA as

battery Industrial and markets. energy, throughout We quarter. demand chemical remained steady experienced mining, tailwinds from the lithium-ion

strong U.S. and Our water around cloud AI infrastructure Quote due initiatives, remained performed businesses continued technologies. of funding the momentum and to activity see adoption we well.

markets we well energy truck In export continue as demand. transition in driven strong strong, and experiencing chemical wins the to oil favorable Middle be as East Our and market, space are by mobile China demand. the energy

agricultural lower as and farm positive The last year. Farm mixed. net with stable landscape as versus incomes are costs demand fundamentals is well fertilizer commodity prices

inventory typical start season distribution turnover season, of inventory. this the and the a to into were levels to slower planting coming delayed the higher However, has than due weather

the Moving impact on calibration & contracted segment. Health orders the well as of a in quarter year. inventory large Technologies last to of first XX%, Science order Organic received the OEM we timing driven next-gen sequencing as by

As Eric noted, customers demand life broad-based by normalized analytical inventory to being more destocking are impacted instrumentation a pattern. science our and as recalibrate businesses our

year. the second the to recovery We half expect some see of that back through markets this these in continue will with the quarter pressure

export The impact resulting progress that U.S. the as share do remainder semiconductor buffer feeling continue as through customers market year. we is of experiencing memory as controls. We market declines. oversupply from leverage the conditions to some of We macro softness the the anticipate broader well gain to will improve of

seeing tighter business hesitancy availability softness driven biopharma pharma, markets, and to and Our capital across is technology recession material due processing by customer nutrition concerns.

second automotive remain the recovery in year. market and half Our funnel some of strong, positive. we The the expect remains does

towards We growth. continue opportunities solid to electrification see trend driving global a our for

of EBITDA points unfavorable EBITDA offset market first I is by the is price/cost. margin initiatives organic sequencing, X% and factors next-gen Most the contracted of by overall pressure margin Muon delivered offsetting growth Adjusted satellite line, mentioned margin. The more cell-targeted growth gross quarter driven favorable broadband quarter, first recent volume with versus to the strong XXX HST's We fuel acquisition leverage the XXXX. accretive in than this some basis earlier. in sales and with from mix

driven Safety both business project by double-digit turning BAND-IT growth & of X% by were and year. dispensing. our in to dispensing offsetting our Organic growth, the last sales Fire X%, mainly Finally, with in Organic orders segment. results Products contracted timing decline Diversified strong orders in Rescue at Fire &

and versus the higher The expanded offset spend from American replenishment to price than strong costs. Southeast year, leverage Adjusted points and is softness last cost an EBITDA strong Asia Indian with margins European pressure XXX driven and performance, coming and volume demand. in offsetting basis with North cycle more mixed, market largely employee-related being by discretionary paint productivity end by

remains Fire trucks OEM for North by business, be chain. constrained supply continue strong. our American to demand Within volumes

China to and and with strategy constraints. we backlog OEMs mid-tier bypass pivoted for our American with are retrofit in-service North share the system approach product to have gaining integrated our SAM our go-to-market OEM However, trucks

we and and our that, have Our and and to on steady, energy markets full across year globe. market continue share results activity an and strong, most vehicles we is in than high-demand is on be With the our demand BAND-IT stable, higher demand in drive quarter Europe positive. rescue Industrial to update the experienced are favorable project of continue outlook gain. for performance give position due XXXX. automotive second to good I'll

organic In some for I'm on ranging XXXX now X% growth $X.XX, We regarding revenue details from anticipate both the provide year. to sustains. are HST we the performance range $X.XX second of to XX.X% in I'll Slide from EPS and with projecting second QX to will and strength approximately EPS the in guidance GAAP to adjusted XX.X%. $X.XX negative full EBITDA from adjusted revised be QX, and to quarter $X.XX additional we range volumes XX. saw industrial our margins and the quarter, that

full to the year. Turning

cost to in volume in have of revenue EPS to low yielding a mid-single-digit on expect across and the single-digit growth guide. offset FMT reflecting full reduces midpoint, organic $X.XX by of reduced equates and annual headwinds mentioned, This $X.XX contraction year we segment. net HST $X.XX, At the Eric FSD. OEM related destocking low- by full our revenue and impact mix year pressure HST actions, to we guidance, As our

back industrial continue recovery Our HST. assume half changed, modest decline for second market has we the view with on half to not a a and the in

it EPS EPS we project to together, and to from all $X.XX $X.XX to Bringing $X.XX. adjusted range of GAAP $X.XX

will profitability expect XX.X% end to range percent We adjusted from sustain adjusted be cash about expenditures The and we our of of implies Capital $XX growth flow year. between margin XXX-plus high anticipated full year EBITDA free are to net XX.X%. income. and our record range X% to X% of million, is expected and organic be revenue last that to

questions. I'll over for With your that, operator to turn it the

Operator

the question [Operator Markets. of Deane Instructions]. with And from first RBC comes our Capital Dray line

Deane Dray

well. been HST through the with seeing We whole the starting Just kind the look, as And other in They've covered sector. story we're here. side COVID the across this of And surge on you're Dover's Danaher. this biopharma story same there this, pumps, volume. of

what's But Just normalizing? degree the not not share that. kind your of it's do to We have execution. It's here? visibility So path you loss. of know confidence in what

Eric Ashleman

given mean iteration as had. levels, and swings, I at I'd at and the you'd of the them thanks, mean, One, commercial level with operations the of I of highest couple and intensity customers things. end Well, some probably discussions expect, the magnitude a of say the Deane. the ever all we've is

then I up say, can in And order actual you at things look you half. see firming some would as the the back intake,

the can are same pulling and see of the actually a the further that sorry. actually kind you now repositioning year, later So it planning down out it methods -- in are little in

that down middle kind we that of you're the And that the kind for fairway. would of volume right products seeing are gauge, standard usually the of

on are reliant bit probably as a think it X -- deviates but about X we're that's that. little we that say, market I'd most market, the factors for So those

William Grogan

add guide. just our And I'd is

low about X% high And only then HST from X%. first side, we second the a to of On kind the the up have recovery on sequentially half end, that half. the

So to Eric relative reasonable the range things just highlighted. that

Deane Dray

right. then playing second bridge lead you out makes of you're quarter from here implications, period about the and All short-cycle rates, that. softness, forth. day can times your comments that's last And and as sense. Eric, as how question, the trends well That so across being seeing appreciate the I uncertain businesses, maybe

Eric Ashleman

more a you So kind are take Deane, little saying, it of from bit depth...

Deane Dray

Yes.

Eric Ashleman

HST On over okay. it rotate and the then --

Deane Dray

no. no, No,

wanted about the with see of softness. all broadly is comment I a Just now, but uncertain softness, IDEX, cycle, of trends there... for in last quarter short pockets seeing to your seeing what through period quarter you're We're

Eric Ashleman

it. Got

Deane Dray

and so lead times In forth, thanks.

Eric Ashleman

Yes.

So in in most recalibration about happening the we're HST. here obviously, pronounced the exactly area that talking

inventory first industrial As down the you we really of right to I ag plan. look ready in fairway, the kind it really, up well. and business, quarter of called kind dynamics our to go I to mean and center side held out rate similar the particular, one of day business stuff we of think of some where is only saw at the things

you it I will things bit, of you in often that say back here reference, little we though, and in can a pull data some canaries more see can doing April, together. recent see those them

say bit go It May going something April of up in it never But is real as firms can for a little is, I a especially June. watch. for and whatever So those that see to be reasons, we'll predictor we us. there strong through into you will businesses.

but rates, of most In a uniformity across is terms weeks just here of day it's not a of recently. couple drop, the big interesting it

inventory when of of like things done that we can of same things, same And formally informally uncertainty. with do around see comments, of kind sort other others you which hold have the maybe some up some with positions and that, more and the you distributors up of feelings that hold

logic terms this break out. a how it's not So in might play of

actually have I comments And we mean, let's this our time, back half. here positioned our last in remember, in

very signs seeing have a the some a of of it. glide here, bit of first then recently, we and path So

Deane Dray

really helpful. That's

when to talk BAND-IT indicator you that's canaries, clarify, and and like Warren leading the Just Gast? Rupp about

Eric Ashleman

yes, couple they're we other they a mentioned, FMT X, general the pump we couple but few be places, and lines often at look And at tend other always ordered X specifically, the businesses talk and within we typically, product even Yes. replacement. you you. more The know when a a and X look we of ones just and where ones to to of

Operator

Halloran with line the And comes from the of Baird. next question Michael

Michael Halloran

CapEx in ignore side of Deane's some maybe we any you on. coin, longer other question stuff the anything the But underneath HST some seeing the are on you commented noteworthy talk the of things? already you the Obviously hood? seeing about change of of side Can pullbacks? pieces, Are destock just on and up follow dynamic? Or cycle the other any

Eric Ashleman

in we X Well, it's a we that have -- they're sometimes the different. them these I are mean here. about larger talk places, little and projects

pronounced, the markets side we're they're on aggressive I referencing more the think HST here. more in So that

in So But good We tie framing did that concern comments. places general you us. macro Deane sort of some story job those a in those let's can referenced that MPT. the like see to for

would the kind story. put about, our as COVID, of our was entirety of then of I'll post -- the prevented lot the inflation of some those I the on of a say, come Frankly, piece there projects was from the the inability ramp-up repricing turned not just it's think this back to industrial came I side. of them that big element side, been in and remind into folks, cycle, of beginning there. a there a together, uncertainty that sort

maybe a bit now drifting too. we're uncertainty, more And into

it not of just general argue day-to-day positive quite Difficulty] of really that is us, doing held because kind business real I'd So projects, for [Technical well. large sort of pretty

Michael Halloran

in And apologies advance for one. this

some gave commentary wrong, comment that the you can that? I breaking do were I'm case Unfortunately, but for on segments just misheard? Could up you repeat the guys maybe the Bill in Or think didn't on you I remainder on me. year. guys by of expectations that, you maybe

William Grogan

No, our FMT low digits, revenue single no. We the digits. FSD, organic did. low is In single HST for implied negative positive and for and guide, updated

Michael Halloran

Okay.

And then. that quick follow-up just Okay. on I guess That's helpful. a then

good. FMT the are orders piece, On the

broadly. I is you're end anything it Is layer decel are think you you Why things that there Or the the how as think year probably on just through that's forward? there out markets we specifically? little piece work healthier seeing as a bit concerning? look the

William Grogan

the book our the in rates quarter those next We the down were. seeing back or knew caution the X the second into our We our ship it's that I businesses, to Eric a positive in post just first in stance we're give strength were think volume we will half to half backlog we our softer be saw progress came more quarter. positions And call of some confidence the the year. going percent highlighted quarter, what as that daily and of year fall -- over the for in expectation just an Exactly. order there, industrials that on of back the with No. the side mean, I us as start couple off been still yes.

Operator

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

Allison Poliniak

strong? there like seems for year. because we Keeping KZValve on FMT, understand on balance about how maybe of sort and and you drivers better touch should exceptionally think acquisitions, the the the can want it were they to Nexsight, of the Just those

Eric Ashleman

Yes. I just mean, frankly, remind a same brought key holding goes to technology customer very close automation up business. well. have in to by. KZ, the really, set that we really Banjo They're that, our piece people, of

is a this mean I So [Technical Difficulty].

we're the all pieces working technical commercial side, model. and IDEX the of on so the the side of operating And

So really, really there. happy

channel The of and -- partners, were Nexsight was software business, used kind a there reminder, with that long that business we've there's of came they long well. piece as

people many number have a years. kind associated for So of this IDEX of with

our and then comments integration, municipal in I we out that pretty say we'll water think the a expands for support earlier play seamless referenced in will for doing And projects, So municipal as the quite presence good well. There's markets, depth. while. here, are strong work

with those So yes, favorable real X.

William Grogan

business more concentrated And is Yes. mix their towards OEM. KZ, much of

So some Banjo inventory not of they're issues seeing is. the that

Eric Ashleman

Yes.

Allison Poliniak

of think that expect about growth maybe Just sort there. over least next you from half drive would recovery for trend inventory months? into But again, of of the what the and back then as any I then XX going at that below maybe does it. that that we sort looking know even side, second 'XX, And forward of thoughts kind you're those just Got half HST on issues. somewhat

Eric Ashleman

I don't think so.

of across both our at customers. years. I a is XX% of largely, story us end off mean rates, our up I and of a think this HST mean I coming I for really aggressive multi-period look segment. was X

we a are. that markets the tracks think of I with end where lot

a they're down rates typical is a in fact, mid-single if, changing horizon. more time relatively And short it's if single thinking digits, retraction or pullback to in dramatic digits. a Even in so your pretty the

for I Difficulty] of certainly -- different going So be us a as to taking supplier component it areas. into single think variable for the biggest [Technical it is inventory levels into

the math of there than doing it's it's in some travel. preceding seen the So -- rate well. run-up It's was It we've before, but math. and is period different different ways, in as

protect I all as do think tighter I So important. And iteration very earlier the we the for on learning need to alignment even as to is through everybody go together. that call, we're and spoke that

Operator

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

Nathan Jones

A basis quarter. first was points couple XXX of down the hit on just I year-over-year to wanted HST. questions in margins, the

decline I Can a the think, lower about HST? you up Bill, you out said were inputs revenues you organically. just flesh X% in but bit -- into talked the maybe year-over-year absorption, little margin

William Grogan

Yes.

the mix biggest Nathan, think I driver, impact. the is

negative that of being business seen Some the fixed organic were us business in some volume product on the of overall then some has margin that still that highest And perspective. we've decreases keep side. segment portfolio with that our deleverage are the caused the to an to pockets cost offset positive, the there somewhat from are positive

Nathan Jones

just the Okay. to had sense. year And little color down. on you orders sequence makes how maybe of I expect XXs a you mean the HST. in more bit on That then

give see on about with on revenues quarter, comps, relatively as and growth take us the I this color think go organic Just business. then maybe Do short-cycle can improve past you that? you here being XQ, pain of the how sequentially the should we especially you second most pretty any a we meaningfully, in guess, in

William Grogan

position. No, no, backlog relative to our

of half will negative digits. -- year of but in is higher. the second significantly the HST single remember, low second then And second of or half be significant last was this quarter, the in year We kind

comp for of the a negative the keep or that HST of will So bit have flattish year. little balance either problems we'll slightly

Nathan Jones

last And on one one business. not is IDEX an inventory then typically HST. just

destock is lot a seeing typically what inventory Obviously, up an we're about. end on You of customer inventory talking shelves.

shelves, how how on the works way customer you system? that through this so talk And about its inventory ends up can just

Eric Ashleman

pretty Nathan. single talking are for it's No, the in a everything And here customer. a absolutely don't customized mean, we're spec-ed not that specific travel in end I use, question, is great make specific components. area I very happens. the general, West. about health we world, in if a science They These East mean Yes. that in and

IDEX, that more as FMT about well, end segment, us of in an between fragmented at talking FSD you've lower generally a When much though, got these all which channel we're markets, volumes. are and

so them raise going no of And single up to tend to head any at is its one one point.

So that -- the comment generally holds there.

it's a specific this it's customized customer while transaction. direct set, And here, super is a highly and concentrated

and mission-critical the So often if absolutely they're it do it you bit they most high-running it, in but customer you only. the this down going know chose that and they chose put because to that you system, for that to even though have you to you're way, don't do a do parts that if components you use unprecedented, could is are customized

Operator

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

Vladimir Bystricky

kind I upgraded in wanted think mentioned just the not you, FMT, and commentary to strength performance energy around of you, project ask seeing. of mistaken, it's you're I'm I really know I you activity. your So if not chemical the

So that you're those end in seeing bit improvements a how you strengthening? you're about about sustainability thinking the sort where talk of can and in demand more little markets, just of

Eric Ashleman

that transfer remember we in think I specific, energy there. do mobile custody Well, largely Yes.

there. out bit overhang as So there's of a are gets the support an price healthier little industry and

we applications, which tailwinds in to of mobile us, lot More a get spend. lot a do specifically CapEx general depends some upon for You're for chassis going though, availability.

other is constrained that, good and up freed highly was actually for us. that environment, something demand that that a micro chains -- time like have, at of favorable like matters of been just captive the a years. and a -- couple in some supply lot story as a That's of it That's for

seen the specifically, chemical Richter with our On China, in business. side, strength we've

there. plays down that also of well We're super some the that that as longer kind which made. while. how locked pretty talked was And chemical we've to well. a have depressed and be see that for was are positioned bunch actually There in of out fact country Europe the reasons side, well I for area us investments is actually, is some think term. for pretty about, probably of the an was as to We'll of related a strong concern

that these that kind still play are So stories fashion I here. there pockets that it's others to little we're goes larger. generally, out from of following in But would IDEX out big small typical say,

So expansion not here, massive pretty well. or And project are of and a doing more otherwise, I multi-period micro think, spend events component but markets, things.

William Grogan

their And well received end Energy is relative that supply have we I products think of inventory very some they the in that had to And about ability been on other differentiation the couple launched business, marketplace. a new have the they've then base. to talk customer their businesses to thing

they've share been I businesses think the a couple customers. relative some take from have market chemical that of that to within inventory to our carried valve well positioned mostly sell into their the

Vladimir Bystricky

just And of the small, M&A the that more asset, scalability pipeline what more Okay. environment the relatively to give know And potential it's attracted the color you That's seeing on but broadly, tech Spectral just today? what you you I front, particular acquisition? talk about then in on some can really and you're helpful. business? us M&A can

Eric Ashleman

Yes, sure.

life I So places it the the within do technologies of I We and Iridian it's platforms -- of that leading into in other of IDEX, thin it's said mean filters. well. in embedded the as designer some mean, optical -- the our optical and release, a in multilayer film, segment business, sciences both we lot manufacturer a as

So will. pretty of kind ideal this this you type, I think of size of an unit the it's technology typical of is business measure, honestly, for specialize how we if

of piece as of honestly, whole pieces all other optics have. And IDEX, puzzle segments we technology not them, here, and places a just bunch in in attack that it with of goes X we think from a So that technology. primary the different of well

space super talked some a complementary in to broadband, we've So way market. great other the things about along

side other is we bit mean Their life here. sciences technology intuitive. different. coatings I of it a is The do probably place little

way involved XG a filters in been while. and looking that's game we telecom things that there's in, fits it -- for And a for, piece rollout then so like that. with a And we've were and

kind how to work do. the it's So we of know

piece their do. other coding we an and IDEX, how of think bit of of to mass as of move you when aggregation across capacity now have what's job think might other becoming start very to a capacity capacity around then, important quite is can this and this The pockets you a aligned of on with coding

We've for known just a really, a of like with it's a businesses this really fit. number of nice So associated lot years. folks the

it's universe, proprietary to in happy here. right transactions. our it So Super have

Operator

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

Jeffrey Sprague

just wanted to Nexsight come and back I KZ. to

you look an think on XX-point something the acquisition amazingly businesses? prior impact they're impact in a It's big they of those think that I or or quarter. drive to going strong, Was strong. in that to unusual right? something there or I result a in question responded FMT some -- reclassification

William Grogan

I the only couple it dollars. was mean a of No. thing note, million it of small, was

couple procedure, of picked up a deal. $X on of of as million, $X revenue, incremental got a Just accounting Nexsight but weeks we was they normal it type our million

Jeffrey Sprague

Okay. Great.

there. it leave were My answered. other I'll think I questions

Operator

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

Eric Ashleman

Matt?

Operator

line your now is Matt, live.

William Jellison

out in to on your wanted learn with I realization bit much is in Jellison how how context historical realized expected and businesses Will price XXXX. Matt little is XXXX about This start across maybe more price incremental for and a much was some Summerville. for

Eric Ashleman

sure. Yes,

of big perspective, sure Obviously, we differentiated part all-time making value an last and value from capture we products a portfolio hitting customers. we across balancing, So our price an that inflationary year, from our have were our capture is high. hey,

year. X% our think, topping to through, significantly ramped price close So we off pretty as we went last had I

we year, guided actions throughout here That's quarter took pricing carryover that track increases we've new the X%. year. that. This a from price on throughout combination about launched of last first then and for We're we

William Jellison

contribution how great. about then expectation a guide get that Muon. That's I update growth year? contributing in the the adjusted to And wanted for organic business is And XXXX? much the on for for to EPS as is follow-up, an What

William Grogan

normalized disclosed basis. end exactly -- it's growth than HST we will mean the a high haven't I be other of it at on Sure. at

bought double-digit them, they had been we compounder. Before a

historically, digits. So that successful in continue see really the to their progress with high here they as and growth we single trajectory

From guide. KZ, the carryover out break an think I for annual Nexsight of said the the but net to pieces, I'd refer incrementally individual divestiture of for year, EPS $X.XX didn't our Knight. this and perspective, you Muon, We we

Operator

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

Brett Linzey

to wanted to I come back HST.

out the much areas So specific parse in OEM of some maybe to destock portfolio? decline versus softening XX%. was other of you to how the order's able Are the down that

William Grogan

apologize. Can that question? broke on you up repeat I us. You Brett,

Brett Linzey

Yes, sure.

HST. on the one So is first

if the down order's much to parse was able other that OEM specific business? of XX%. in you're of that to decline how destock out So softening Wondering versus areas

William Grogan

blanket the received that order [Technical Difficulty] we or million the year. last on onetime

the couple a was of that a market is that factors Eric lot of So of highlighted. balance percent XX%. The the

Brett Linzey

Okay. Got it. And one. just one other

lean into this You Do discretionary? defend of talked bit. assumption around shape barometer margins? businesses back further business the actions thinking about planning what that of is. Just curtailment of does some to How you restructuring the additional some little curious the your pulling here a incremental or

Eric Ashleman

out very played for think with what Look, had in year, for -- we Yes. the line it's our in planning far, the I it. so

So here, We're softening the saying in side. come indications some on industrial it the back early remember, this will to fruition. that the half be might we

reductions we've with any around that's And might and and so discretionary lined we thought in completely what the way care had those and originally cost made additions a in some said. businesses, make we in already line up

phenomenon, HST to about the pretty The related those targeted targeted are actions businesses. that within we those actions spoke destocking

portfolio you do these where come smart together occasionally can investments on in So discretionary is and kind things and of differentiated nature if other this and travel us. a helps around a We of the will, just just as it IDEX treat really the way -- team. well

Operator

the TD Cowen. And comes the question with line next of Joe from Giordano

Joseph Giordano

had I me? Can guys hear Sorry, you myself. muted

William Grogan

Yes.

Joseph Giordano

Okay. Cool.

components question, talked the that guys Nathan thing typically up like at overstocked had you I to wanted HST. but in Yes, OEM. are about this follow are So there inventory not on his in

to in And for level -- IDEX? in you OEM differently like like like long just that's not and So maybe unbeknownst maybe clear one. where this just to because buying of were was of where just excess their so granularity is they change time, a a behavior acted that need

quickly. And then learns a guys you pretty company that are generally

you this Or make off Or you kind do do of this? how that's differently something So guard you have what of do sure like to don't coming out do change? discussions catch again?

Eric Ashleman

kind I your almost obviously, Yes. if and drive No, projections time your done, you requirements. of all assumptions to the look, way your mean question. good a right down it's of lead get it future is inventory that around replenishment

this think have I view can there, irrationality you don't now hindsight, actually think, there in but and must so been the case. well, that's And

a think of if need to just and you way, delivery say, line are you been but others us, at experiencing a I patterns, it's a lot certain stuff. a not you've going level, for for in certain projecting

of part changed from tends there a different We're macro changed dramatically what's COVID. -- of there's first think here further of a kind and away I calendar from is a to have starting it wondering to kind bring headset. think legitimate about. that change, you funny people well, spending. as always And maybe most sounds, biopharma the in all, are I out some of that pullback things see We're some perspective simultaneous

have start-ups with associated things crisis and funding places. biopharma We in some

go assumption change you minute pretty equation, what you that effect actually your it be the long-term in. you the bringing striking back So demand, into a on interject should has on potentially

back Now our "Hey, to normal, an going returning quickly really our even you things here." we system and probably automated combine well, together, that lead put with to much the say, customer X too so fact those execute you is set, that you've got times

that. on and So learnings back things to point like your

kind and as swings. cycles this maybe be to come these like typically we're all, see, corner. another magnitude, world there's around of in chapter we But the First fair, not seems it always of of the seeing to

at take we point. sure performance, teams being do tomorrow potentially just that, lead our would the higher swings about that through and and long-term be the maybe today, of transparent but move your are not making I as cycles understood set, So kind exactly talking in like And commercial terms really projections where those with more operational of are this, both we things level. the customer think and I time that's I coming together think iteration, understanding

Joseph Giordano

and kind then April I the I you fair. did talked is now? terms And you just that if of for here worse what that mean you're you half to industrials weakening, last assumes guidance me on No, start in is thought? expect the that's about side. this line nothing was But of in weakening how Like Like like contemplating back know seeing the what your year. is FMT magnitude point? consistent previously with get what April of in -- it -- at this you're with the

Eric Ashleman

Yes, I I kind expect as pretty is this month would I as about mean, April, recent. is of this the look, you I interesting say, point. an at that spring. would you the pattern of is often said, some a into think move transition

see. we'll So

markets We're to But of we're across simultaneously, a think step of of other, the all known order end variety Because portfolio that uniformity. always see nature the of short been able which again, into or patterns have it people. the kind that's for to play. way fulfillment slight down sort long kind have IDEX where, looking of then a same one of and I comes

move in in have and negatively, probably this finish with monitor at it's drop. is least a and and and and tend nature, they looking is quarter. think would taking concert through end. continue at talk It expected it you a the to the we second small back it exactly worth either is I So what to or in signal. modeled And ultimately as others obviously we'll roll in to I about is positively -- uniform get we when other, that say but each would

Operator

to at time. for I no now like And questions back this further management would over the floor comments. turn to closing are any There

Eric Ashleman

we've more much. some so put to glitches on I Thanks with the apologize, had telecommunications. we'll work technology. know to need Maybe I filters

the all, very strong of in want employees. always some quarter. IDEX know there's First I the on to listening I Very, thank call.

your for and You've in customers. continued company. and to others business interest the for Thanks to call for support really our perform on the the

one of state here, XXXX year was the from we appropriate the it. you line Bottom HST playing through in It's dynamically taking world than recalibration the moving We're suspected we as business. But more executing to can see, initially to of knew be responses the we're in side. another. going a out

for highs to going and And long-term continue most I then typical, We're in to the importantly, talking come. coming something actually from to years We but think it's success advantaged. think those that's way in we about that ultimately outgrowth believe pretty markets. accelerate absolutely and down

over our really sixth we've strengthen stepped the and we've well, that emerging Iridian, the last proud since I'm to up announce through we and happy of swings set transaction the done culture years, capital to So footprint capability and with dynamic these markets as all of X unique beginning 'XX a doubled deployment, really executed it. certainly our fact the of really continue

look forward IDEX. built here. perform the to years future as to We're you. in for haul And for and we're value the throughout. that we're -- out in the going the the deliver year I Thank the So confident updating long and way to everybody come play along

Operator

This teleconference. concludes today's

have great You Thank your for may time. disconnect day. your you participation, lines at a this and

IDEX (IEX) 27 Apr 232023 Q1 Earnings call transcript