IEX - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the Third Quarter 2024 IDEX Corporation Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Wendy Palacios, Vice President of FP&A and Investor Relations. Thank you, Wendy.

You may begin.

Wendy Palacios

everyone. morning, Good Palacios, for Wendy of and FP&A This Corporation. Vice Relations IDEX Investor is President Thank us for quarter you joining XXXX IDEX of financial third the highlights. for our discussion

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

Officer and Eric Senior are me Executive Khandelwal, Chief our Joining and Ashleman, our President; Chief Vice Financial today Abhi Officer. and President,

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

Slide financial during today's measures. to call, non-GAAP Please certain present Turning note X. we that will

any developments may forward-looking the future. uncertainties. and We of do statements forward-looking securities that the the that will we occur or statements make federal from Actual or results including assume we will to anticipate in make to are also expect We statements any the or These within differ materially meaning statements obligation laws, risks events today. update forward-looking them. subject might regarding not

that these on in may our SEC and actual differ materially results factors from is these website regarding Information our filings. available to forward-looking statements cause

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

Eric Ashleman

Thanks, I'm Wendy, and on good morning, everyone. Slide X.

drove an Our uncertain environment. strong in teams QX results IDEX

Fluid Metering and Fire Technology Here are Diversified the margins segments. highlights. We delivered nice & excellent in Safety organic growth supported our by Products and

& $XXX align across our flow and orders We're into million see through our adjusted the of HST pleased all XX% energy overall. Health acquisitions. best across excellence are within long-term income. Technologies cash Science as strong acquisition Mott digging prospects teams with our operational IDEX of our recent growth segment, growth Our focus around really we free and Execution was net was of to

certainty. interest QX, us we China's to yet that We for all of have seen a noticeable Fed of the up really the to the start QX in macro drop projects set stimulus to QX positive From important the segments isn't The by end change some industrial has Take create rates that in rate absence effects year. ripple the project an recent well announcements deliver in haven't continue next order term. environment. extremely and of to November an all outcomes in markets together, of dynamic holds FMT. helping really in improved An environment election fragmented close where also long-term near and polarized with the of with remain through we U.S. more larger commitments. This see true stable day-to-day

move We'll move quoting by budget encouraged calendar an for and from increase We're as more their way projects within as and consider activity formally many OpEx fall customers we either deployment capital watch to from moving delayed canceled. in we see signs cycles. summer don't to

intelligent within We the continue on and markets, there water efforts about I'll our strength next to talk focused more see our slide.

to the segment, our them Within highest of last partially year, posted Admittedly, we areas. quarter, major nice all saw increases year-over-year booked & uptick we're blanket IDEX but low We a Science increase & orders point of Health our in sequential bit this and backlog we XXXX. order to of drove overall point of HST a our in Science QX comparing organic robust orders, many the Health by landing a Technologies driven within business. we reporting order

cautious HST we recovery as We of the encouraged by trajectory important our most these but trends remain consider are within within markets.

the and quarter. experienced double-digit defense, satellite growth communication within strong. Our are markets They aerospace

pretty noncommittal have But more analytical launching clip innovating than of lot and are next instrumentation customers gear. level customers positive semiconductor the the are growth rapid next Sciences they most been. at into point industry However, to of pushing timing XXXX. Life new out inflection least at midpoint a are They're major the a of they, too, rates. and

science toward as acquisitions. to eye teams best prospects growth long-term our materials towards recent applied with an Our HST their we deploy integrate synergies technology continue resources Mott alongside

solid Products achieving Fire exceeding record had Safety sales performance. quarter a expectations, and Diversified

continues meet backlogs. North to grow business to demand. OEM strong and share scale from experienced fire BAND-IT Our production multiyear growth aerospace American

considerably, units by India, just growth our delivering within retailer new strong headwinds from facility Finally, teams business impacted that but in large delivering by top offset markets. was gap opened North April that recall our dispensing the American our XX,XXX $XX a to XXXX work closed emerging We've to end last pressure continue year. line million year-over-year from of of cycle, large in replenishment over of

As to aside, help who from I following remnants chipped the people in Safety, Helene. from & devastation Carolina Fire IDEX want North Hurricane to members an thank the team of our in

experiencing follow. Finally, to progress we're a We'll thrilled benefits in acquisition the close formally quarter. the more there. on are the of on Mott slide early activities exciting details on are to things this share and the some really we of integration

X. Turning to Slide

Our of bright now they Intelligent Water spot climate opportunities world as and change dynamic ecosystems the navigate around us. regulatory in future use we industries significant support to see cope best platform a water. for municipalities the the with as continues the and the of be and funding to management and impacts

to classically days Water Those has been a change. management is over. are sector that slow

underground now increasingly can't severe populations federal, landscape. and drive now manual and just digital was events. and handle up and and once from ignore. the automated. of out to a infrastructure neglected to impossible in stepping was and above growth analog once support bottoms regulatory is What is of within What typically And sight regional funding increasingly expanding local aging and Our weather demands is

the being see and Above water processes. amount in on with ones. the to issues help here the our slide. big the IDEX storm collection of some environment Below And critical that be And solutions the monitoring teams ground, protect reduce experts, teams small become challenge. used flow treat ground, meet system Intelligent to and ready they Water water you identifying are our aims before examples

gives overall Subterra's acquired about market camera a untethered challenging X teams The data this solution capturing downstream, The more digital within inspection suite is of recent technologies Envirosight wastewater This our Verisight simple for we expertise which addition assessment remote platform SewerScout in specifically floats space. needs pipes screening sewers in Envirosight are the addresses our rarely condition and Subterra's their tool than core performing capabilities months way. Technologies analytics system and that large better complements that in the ago, of Subterra, rapid WinCam. EPEC, X-dimensional environments sewer with inspection expands along an integrated systems, for most The before. ultra IDEX collection need inspected. inspection

Quantum displaced reduce and pumps of example semiconductor consumption. industry's water that serving to manufacturer leaders heater a Trebor needs heater pump save this water continues or water. the quickly manufacturers, of the NXT another ultrapure ultrapure market, semiconductor didn't IDEX recognize established innovation in of yet Trebor's to enough In from And billions address

the IDEX team team gives team Slide members the off acquisition to than leadership drive start. of an of our X partnership a collaborative to A have turning integration. Mott, Corporation. Mott key formally efficiency. living the days Now to joined the and Mott acquisition of IDEX few rest into acquisition earliest Less since completing is of high-potential on update in a fast Mott our X This months the

from working Mott's together on highly to technologies. to soon IDEX innovative too already other teams leverage and are share it's new filtration engineered units specifics, HST solutions While Mott within

a been rapidly team the Mott in combined of of it's IDEX. a instance, XX has being one prototype to see. days In developed customer-ready part first Frankly, tremendous

third design opened emission X for As the its metal essential this generation of custom see sheets, energy right manufacturing critical facility quadruples the in plant porous capacity low This for fuel ultra-thin of Slide world's in you month, which earlier Mott's can transition. a photo a component Mott the are in Connecticut. hydrogen, on the green production

left laser leak in The semiconductor the shows cleaned high-purity picture operations gas inspected where pulse helium then filters on before marked, point-of-use bagging. and are pressure the industry tested, Mott's used and

As Technologies. science a material Mott to materials material within applied team control Material business deep Muon, design a in including businesses the and Optical Their Solutions centered capabilities. and flow broader process solutions. structures our is and has knowledge manufacturing science reminder, technology The and STC porous complementary Mott of control HST, leader

that excited as close date we to backlog history We're the built Mott's and funnel about key deliveries of project robust XXXX. out with execution is

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

Abhishek Khandelwal

Thanks, Eric.

Turning prior year transaction results the are consolidated on in unless period X. IDEX's financial segment that September all on the of Slide against the otherwise. the to comparisons X. acquisition consolidated HST the Also, financials Please is close stated note reflected as of and Mott of

half sequential low Third had quarter HST up portfolio in order and X% the on which were seeing partially that We blanket by of the growth of orders. flat. We while in see growth FSDP orders up a XX% did orders organic essentially FMT with growth reported in quarter, approximately across organically. activity ship basis saw was will organic $XXX slight XX% FMT XXXX. growth driven was single-digit million

Third X% and upcoming continued decline $XXX cover organic prior flat in HST were quarter driven to headwinds organic and FSDP We I that reported sales the FMT. up the a organically in year. of compared of had X% growth X% in slides. X% million will experienced by

was strong XX.X%, basis costs. offset XX margin higher margin expansion employee-related respectively. price XX.X% gross of driven partially points, by an XX adjusted cost, gross was margin a and and basis quarter was points Third Gross by expansion

basis points. and Third quarter adjusted EBITDA XX.X% margin XXX was down

had Mott, higher impacted acquisition typical the our With acquisition than by M&A our we spending XX to margins negatively date, approximately of basis points. which biggest

of and accelerating of see Mott the expected are to integration synergies. excited are We commercial the the realization

resources We to adjusted discuss continue next drivers of moment. I in to IDEX deploy EBITDA across will growth reduce XX/XX slide leverage and the on to a third the complexity. quarter

our rate prior rate basis, contributed the year year period. the $X.XX tax adjusted EPS The in XX.X% was period. in prior onetime certain of versus GAAP a year On effective prior which XX.X% included benefits QX

achieved did quarter. EPS from our GAAP $X.XX, Adjusted net costs, during $X.XX. was while amounts in or $X.XX our We with EPS an not million contributions the financing of end income include one resulting Third offset of or quarter Mott million guide, adjusted income $XXX another the essentially of down higher guidance its and these XX%. was $XXX net related

for cash improvement a point net quarter XXX on was of a $XXX Free X%. basis flow a We of basis. achieved decrease a the income, rate year-over-year of XXX% million, adjusted conversion

strong cash We in over have and balance million this paid dividends. a we quarter, $XX sheet,

million net of borrowings acquisition at of the Mott close issuance ratio approximately rating We proceeds the credit the a facility X.X% of leverage $XXX of September. maintain gross and funded $XXX also from from investment-grade our $XXX combination cash, revolving through senior of strong notes. of We the a million with million

Slide the drivers. X, to EBITDA on adjusted which details Moving

EBITDA million. For quarter, by decreased $XX the adjusted third

resulting by offset volume prior rate. spread flowing partially million gross The sales we $X million in basis the Mott. of productivity strong businesses. EBITDA our dispensing higher our by a and volume expenses over industrial employee-related quarter, $XX of cost at operational transaction-related acquisition and the organic in adjusted unfavorably price higher margin through points impacted with XXX adjusted decline saw flow-through Our unfavorable benefit negative and in We approximately had X% costs year primarily was the year. In connection prior of businesses mix

All companies, slightly combined on unfavorable divested increased the factors acquisitions added acquisitions The by adjusted from EBITDA impact on organic net million FX an in offset of our resulted quarter-over-quarter EBITDA than these the benefits $X and adjusted impact basis flow-through. as from of million, a divestitures more $X

performance. I will level now review segment

This organically. the Net Turning majority and cycle out in in and project mid-single-digit organic year-over-year FMT. In sequential experienced was of orders push segment. to total FMT and continued growth organic businesses. across in QX, growth X plus flat were muted chemical sales our X% by for resulting activity, ag headwinds we up orders growth Slide

the strong our by energy single-digit and across impacted demand and price in businesses. ag growth our in Total intelligent unfavorably segment and experienced had industrials We segment capture growth was softness OEM water businesses. high

remain rates from business, in The growth day change was prior in comps. industrial organic with year-over-year our QX overall strength no partially market steady Our to Industrial year conditions. in due

American to portfolio see funding North strong the Water in municipal with ongoing governmental support investments. continues Intelligent to market strength Our

weather from for demand in decreased in in builds destocking headwinds North and propane America, energy slowdown and distributor related Our seeing business are truck Europe. propane

market the Our ag the XX/XX headwinds remains tackling redeploy to this OEM resources. Despite remain market business leveraging challenged and downturn, slowdown. our by teams focused,

unfavorable decreased spending due margin higher costs, and by EBITDA cost. offset employee-related basis partially Adjusted discretionary XXX to higher price mix, points

markets year. was science were and our life growth Slide and orders as grew Orders XX%. a and experienced pneumatics to comps factor Growth year-over-year life X on last by semiconductor sequentially performance HST period blanket same also organic analytical Moving and driven bottomed the a segment. sciences, businesses. of partially instrumentation Year-over-year in

Our in sciences there in funnel innovation our life remains no is change outlook. while active

were Net organically. sales down X%

strong end we the entirely serve. continued price did in it the have offset capture, challenges declines volume not by we driven Although markets

to life end and end saw of is Our strong. analytical growth sciences quarter. the was QX. sequentially second markets semicon, to demand year. Defense, aerospace in businesses steady are We remained seeing in QX a we instrumentation Within next from recovery and double-digit the market the communication half satellite what pushout

businesses to industrial continue light HST project Our delays. experience

accretive with current the as net brisk operational of is employee-related reflected cost lower pace. EBITDA divestitures. primarily of HST's volume As of of higher year-over-year Mott HST earlier, transaction margin productivity, impact have financials is price X. to the offset moving commented teams align of and to points acquisition due the of and integration on and September partially a environment cost, I basis costs, at the declined work favorable the in adjusted acquisitions QX by for The done close XX segment Mott the

Slide capture low Now sales organically, driven Safety were & BAND-IT. driven take by dispensing I'd team's EBITDA up price declines Fire the X% delivering sales XX. up organically. moment BAND-IT. by and quarter. in to mainly double-digit X% our turning our growth, & a to Fire &Safety/Diversified Products to Safety had Fire offset and in partially in were like segment We volumes, Net higher FSDP performance, Orders record by and and recognize strong adjusted

growth ramping driven and Fire to aerospace needs. in continue demand, industrial their growth auto. experienced in Safety and to we businesses strong see BAND-IT Our are declines America by North fire meet & offsetting OEMs, production

in declines to year been timing this the North refresh had first this XXXX. business retailer driven to through in of as half dispensing big American half Growth an first blending due markets from headwind experienced headwinds projects emerging expected, Our India by from of box the of cycle. market offset the the the

unfavorable higher EBITDA margin QX with mix points price/cost year-over-year, basis positive adjusted XX declined offsetting due costs. primarily to employee-related

Slide I would and our update that, quarter an fourth like on XX. to on for year provide With the outlook full

in we the an GAAP We For prior FMT year. we in EPS growth. X% compared approximately adjusted fourth with EBITDA margin EPS year-over-year $X.XX. FSDP. and to adjusted growth flat of to In range the to sales a and XX% $X.XX project $X.XX quarter, to X% anticipate to range the of $X.XX high increase mid- we basis, HST, to the expect On organic expect sales single-digit organic in of

XX%. with Our adjusted diluted decline revenues adjusted outlook $X.XX from full adjusted remains year to EBITDA unchanged we guidance. range FSDP. and of EPS our EPS to expect guidance organic $X.XX implies to project low in sales decline revenue and full GAAP X% approximately an to $X.XX to range FMT single-digit line margin growth from We in to organic prior $X.XX X% HST year in single-digit and The with EPS and high

Eric to over it closing turn I'll that, for remarks. With

Eric Ashleman

that been the a the echoes globally play seen last caught economic uncertain last uncertainties out an couple Thanks, pandemic uncertain of we've on XXXX environment, an it's XX. the against quarter-to-quarter. geopolitical in out frustrating Abhi. easy made elections. the of I'm by national get as environment more to unprecedented years Slide of number Look, play up It's

funnel. managed well a of M&A incredibly We've period. this within focused proprietary through growth the We've significantly throughout improved prospects long-term IDEX work

sciences our trusted customers' business We most like across life instrumentation building defense. markets our support to advanced wafer and and have to at and We're absolute scale space analytical relative disposal today, water, semiconductor discussed technologies problems. to people and which develop some advantaged solutions outstanding we and difficult fabrication, units

transform continue to support others grow IDEX abilities customer the to biggest view the analog functionality. shouldn't. markets trigger XX/XX quicker We evolved IDEX. isn't a We developing into intuitive take at than our critical our as and people decision acquisition our time-wasting points applications technologies. for loops. an challenges through reach these jump-off opportunities for to Pacific granted. IDEX We're up Asia execute within as adopt best we need advanced headset. product traditionally swing from rapidly and tool to And our everything It's size core can economic points without and We we throughout digitizing sometimes to

we we're talking collaboration past. build the business in boundaries than to have across about Finally, scale more

have We've last our challenges if a years notion some to prepare decentralized It over culture And asked this XX moment. IDEX. of doesn't. the intentionally for this the built us

trust, our Our teams and collaborate and of live commitment core for values structure bureaucracy excellence. team purpose customers. help each and other day naturally our without through to stifling every win We our to

you IDEX company. to for make Thanks turn your our over that, I'll the employees for again that to great partners around world IDEX questions. it a and the to With do operator all

Operator

Instructions] Deane Dray with from is Our question Markets. first RBC [Operator Capital

Deane Dray

with kind small news project we delays Eric, of tone the of that escalate. already day given Can didn't rates? start good you business, the the us the

But was the quarter good. us would you of color And some start. place So be the that read day just that to a gave BAND-IT. rates, on great and progression your on the

Eric Ashleman

Yes.

of I I inflection. a really stable kind mean, As the while comments, they've without been said opening in lot of a for

So month-to-month track played where to of similar pretty consumption. course, are through the were the got different as looks lot the in it A summer that closest you of those we businesses QX. We don't the see all we've months And anything out to it really quarter. time. in

here. bit little of They've kind been and in core in lift the numbers see we posted we steady units out that in of with a our them, that playing industrial

indicates. that across the we're still lot shape in That's and all kind I it. kind of industrial we're things a of so it's indicators that plants and what think of maintaining system And continues making on country, good the those --

still a where about suddenly delayed of too. of the delayed there think the talked if into way. kind those uncertainty of either coming The The in of, -- project election of of just see week, to out us, any always category those same longer. the We're I and going overhang to it's to things, start that's obviously, place, longer-term any up or sort think take next and that's commitments, the in the about instead looking move projects canceled or not I

of a a a And quoting which that. picking think get is sure we'll fact sign. fact, about see key QX I'm in ramp the it at I bit a with little in a that actually don't are bit. in that up things of I then point. of related We've is the backlog good all We now. a couple certain got activity, made comment is here almost and project revenue to little that

them of underway and I near of Some the of out signs and think ahead us. of time completion are confidence also are good that's

Abhishek Khandelwal

And on a to Deane, Eric's narrative bit. just build little

go just and if So water grew and about about will. if the face, see of QX But you a step you talking maybe you of kind a deeper, back take pumps single you just high and of business, FMT the organic growth step X%, think within on HST if kind digit.

grow group energy. and was valves single by ag which digit basis, saw high offset on organic You an

So HST, even up digit. franchise single core was industrial within the high

Deane Dray

just each [ appreciate met And businesses and Water that a New the visit follow-up, ] you That's I Orleans team, Webtech helpful the put one on as Intelligent of got show in all these We to your trade with at really recently. that the color. I fact spotlight the love portfolio.

this management. water infrastructure fastest-growing one we sector So is water the in point whole the to had to storm Xprobably if

first-mover the where there. this So business about of just Intelligent from grow And you advantage of it's group? more kind to -- like is does get Can how Do capabilities? guys funnel here? just you critical need add -- talk for like? you the some and mass kind Water What looks you it

Eric Ashleman

lot appreciate and in That's collection you really the do becoming storm significant through there, of that talking we mentioned that you Yes. And to events. that see word. work show. the things -- area, experts. where kind That's a right water about you Well, to at weather has a We we in focus here. our play And obviously, businesses like our that We out. commentary and of others key thanks. pointed

focus. assets the got we've place the right in think positioned to I so really, really And

our going you in you the a in this just help in as not think to together trying work your on of they way And is you, They of certainly think who one end but system. and to system together. work future. run professionals into the the the are it's hardware I the what's customers, saw, winning to in what's operating likely occur give when we're reasons analytics predictive And we where about front insight

and We industries. have significant base within engineers engineers that specification customer and a municipalities are project

And put to kind if works, understand of what that they're way system, the approval. that obtain will. to the is to the they're of you project analytics do trying And together capital water then the trying circuit

with duration. phase that more particular this at kind cycle that back business get to your longer position important, points so do. the able municipality funding can really the is your to system or to and core so cycle, funding got right you And it of understand work yourselves of the that Being has positive support we for really,

of thinks underappreciated helps their partnership funding sometimes it engineering more day-to-day been. better of them of and grab kind than But this system very specific monitoring. go to has available is allows understand that actually really now that That's people kind

there's we That's under-the-radar, much things yes, -- Subterra kind here underappreciated good example. working that we of kind very kind collection. do [indiscernible]. I is pieces that Sorry, you us. been other complete We've like capabilities sort company about, of mean, technology of before. also it appreciated. this really and probably within a an and for asked would helps things to other of ecosystem And with are of There

funnel. we so in the work And to continue

would we we're time. continue over both things to look terms at inorganically is and organically in an to us for and area much of very larger, -- make like in We it that XXs

Operator

is with Our Stifel. next Nathan from question Jones

Nathan Jones

were. question showing altogether [indiscernible], to I'm Intelligent going without HST the about to that collaborate comments, of businesses you Eric, just how businesses run closing could collaboration you Deane's one Because how potentially thinking and the I'm at brands united there. Water on follow structure. of businesses the say businesses what business was combined capabilities together. you some kind customers in across of units those up is your decentralized losing the And the run

kind process that do organization, you sales? collaboration integration the How that want manage cross with you kind the those some the need going and businesses? you how of Do with businesses? do drive you to see these training manage you though, without for that of commercial integrating business, actually And

Eric Ashleman

Yes. question It's that's great from versions as about mini when of some to that we of IDEX. kind back it. I ways nimbly great of a the organizational mean, kind of super spot do. do these And one as it they think a agilely step a it's way bit we the a structure. of flat is and -- you talk IDEX, as little put that it scale themselves of It's I mean, we together, areas work present and where we kind

water I there's we leader of pieces kind that of have and So a lot water, a of stacking. leader of mean, leaders business. not of the individual And between

of horizontal vertical. operating So more wide think that And of of quality people, a system little here. as you this one and kind bit quality wider. of span to the the keys That's allows than the model the the take of the

working to got with of And point something leaders. for so the you being you of terms in already impact close all

of It's we been IDEX ingredient, key doesn't always part and work. do a as this change. that's is So

so would of they these work don't. comes areas building in doing XXs understand to strategy. IDEX it strategic and need and why to -- together worlds prepared to be strategy down is intensively it terms of focused of why A in things But so capabilities lot and that we this go and where we and this

is over-rotate where a which other. between together They specialized working -- on where one because versus people other the life points, it in -- know companies so are about that's segments, customer every collaboration pieces of we And difference think lot is the cares way area one I and where an or the in get there customers individual these or of goes areas and caught.

a a The focused because solution power kind delivering some since just evolution problems comfortable in at world because hybrid the of to So ever I've very you the work system. more harder, in need scale the have it. IDEX. earlier putting more stages are demands becoming actually We're a They're of to We're of worked we set evolving. they're bit

everything of we development organizations the a celebrates the that ever that we everything So they leaders thought in And in and do to probably of operate sure it talent which way all all internally and it a certain secret do really does bureaucracy. sauce about lack that are make is with terms we've lever culturally, that autonomy. built of for of XX/XX, can flat

Nathan Jones

getting the the waiting orders is like I indicative are settled those guess it's kind last blanket is improvement XXXX? about think any have my Is seeing, I sequentially, blanket question Abhi number. the blanket XXX, from auto growth, of the some not been of over in kind be follow-up something getting of going was would organic to since HST few which right orders. been about orders, way XX% number some average around of So of worse. kind order change half the said an and that it's quarters to think these where without kind of still in any of really Or no and in better of bottom markets? not the

Abhishek Khandelwal

Yes.

let me your answer Nathan, and So question. try

from just we QX That's HST same order basis. to was million. other again million of QX about change $XX of that from that posted So And year-over-year saw about was straight look say blanket was businesses. demand half -- of of about XQ and HST amount I'd half the if at organic half in a year-over-year, different about orders then and was blanket $XX think between on for if to you XQ that sequentially XQ activity demand. about HST, up think a the or it you kind and kind

go see ahead, Nathan. -- So you do

Nathan Jones

going was some are there? to I some markets underlying so seeing -- the you in say at least improvement

Abhishek Khandelwal

at are said Yes, like point But a sciences is continues if But sequential. inflecting. you seeing semicon there stable not to markets be at -- our we've in improvement even again, markets Life are look sequentially. we it's we are. where semicon

Eric Ashleman

we are -- instrumentation. kind I in other that a finish. we areas segment this remind mean, like performing see that just lot yes, science not then And analytical that mean, And I of and the life high-tech elsewhere. of to of is have industrial those, and they're businesses semiconductor the suspects in half usual

and growth We've before. So had from that we've got some list there.

got that nice end kind segment year. feel the and good built point a the backlog think, day, And the we've low just the really good progression we've for number of bit the of we've the seen order comp against away a But last see and here at a have we I little year. because of look, posted the now from about obviously you we position comparison. highest big just number

Abhishek Khandelwal

Correct.

Eric Ashleman

some start leaning Doesn't as really doesn't signs optimism customers. see of to we're here, in of the the when from conversations we to And the the is baseline wanted talk having in comes, we move about just stability. it. magnitude people say the But direction away of one inflection signs with having just next that same

Operator

Our from Mike is next question Halloran Baird. with

Michael Halloran

coming doesn't kind of stable, kind activity it project in quarter. the But choppy a had. you're But couple ties day you your sequentials of incremental already a but talk think know, maybe like -- in month-to-month, kind that talk some was fourth question I change of mentioned there. thinking Eric, first rate, expectations. maybe choppy, of you there in So week-to-week I there's the about briefly answers about seem about how into

how see order relatively things year here into we think next a any quarter? And the how that in about cadencing, from fourth you're normal until thinking In about words, et change how next year should cetera, to Or is about backlog a sequentials, that out. the other how perspective? thinking next start few assumption we backdrop? you're in fair Kind a of thoughts the on is play quarters that

Abhishek Khandelwal

Yes.

So to Eric QX let QX jump I'll sequential, me let the take and in.

ship to work a QX that the are about in places different think the that laid of we kind you have really and if few on it's out, in done -- guide we've projects So was QX. are that about backlog are a lot that supposed QX where think to of there

ABEL. backlog executing the the big that's So getting on teams are is in, in ship the that first and door. around They working out and pumps

see place business in MPT that's that our the And going to a booked in Mott. pretty that's are working on. where late is backlog I'd ], up get last there's tell you we is [ stage pharma then Second It's you QX. to it in tied

We of the have end quarter a big out go the energy of scheduled that's guide. project that's QX part at to

out, the that's of guide So to how QX. part that a if ramp ramp think about just is you laid QX few we about to QX, to the tied think QX a from the I from different and projects sequential decent

Eric Ashleman

talk the think forced And quarter. is way. going to then, that, past They kind look, that on everybody of kind of I they're other I what fourth in it here to as do in and to need an be that of next out they're think depend to interesting inflect is we suppliers in would if where us period it. bets source like going sort of how would year, make they do they're what like terms That us to consider play cycle, calendar it's see to on critical a going them. come this their make,

stability, Mott. here. and sitting what that and for continuation commitments make really top We'll question projects, a layer of any forward. reasonable that then of we the But up-to-the-minute them go that of where those I kind to backlog of it, are have what of and conversations, what And point are we might health as there it's state in, ability the of at those then a happened on seems with see layers think including other we'll of be

the anything. not election, or whether that triggered in course, Of

need that pieces a number suspects it the allows to usual But there. of the clarity least digging of of see in would at come rise above kind X It quarters of keep to kind kind it's fact it. been that for least then period stability. pretty of you there's base level you that So now at good or with of the

Michael Halloran

there here? kind How So an portfolio is then that you've iterative towards point you of beyond that where let's the growth and the reshaping the the market. in algorithm done horizon a recovery you move would think of now get about

on that growth else components central the some the of model, to outperformance to resources you then help want resources synergies, synergy the or the decentralized break support from algorithm centralized to or however you You've piece. growth added maybe look Could by market drivers revenue what down it? like or and to it categorize

Eric Ashleman

Look, we to HST. ones that acquired we've in have all a portfolio the here now faster-growing that more is to increasingly starting into itself weight markets,

of somewhere describing, the ones to go as going biggest periods you're the carry we in load the like becoming more in It's off that's forward the segment. so certainly future. And

rates. kind we're organic that to market we outperform the would always want of to so core our entitlements, north. but see And We'd entitlement moving

dial to as of start IDEX And like that. plus navigate mid-single-digit kind so start into to we we'd a to grower

We'll beautiful and top deploy single-digit of still the flow-through X you we're would us capital XX/XX you because of practice when on on bottom together. a a going continue acquired. that it, acquisitions it to do these two put the we of kind point of growth in take to the say differentiated businesses on productivity. markets. line. That a to range to or higher high-margin should put I allow lot the are We're high-margin And inorganic going

through expansion that. get double-digit you nice so all And of earnings

really differentiated the of practice lifting and years, maintenance XX/XX more system really, in a over X to continue happened it all and before, So slight than got to it's nicely -- core then last do demonstrated what's rate the well. to uptick the on execute dimension that. we've And we've because kind method because know rates additive inorganic, a which of portfolio, IDEX of even the and we how growth the growth of of of

Operator

from Bystricky is question next with Our Citigroup. Vlad

Vladimir Bystricky

your on bit energy wanted in around dig and soft. FMT just of I from So outlook terms market moved I to in commentary just to stable you a there, think which

in an having how about on else you how those impact those? be just sort you're little impact can overhang you're might in whether a an seeing of anything dynamics more about seeing election as and talk you're much thinking particular the energy that in bit So Or end markets?

Eric Ashleman

Yes. We do custody little people mean, lot bit transfer. here. remind a do two there's around the a kind downstream things One, of always we work -- step here. of I there's back and first, of job I'd

kind that's throughout. in that our So as really, that's work. the we and is infrastructure do spread building energy there lot of moves overhang really warm where lot driven of winter, a probably Frankly, sector that around by some system. a that laying some from of got transportation over system, We've things within a like people trucks

consolidation We couple if of because still an we got downside one bit year artificial was in that back large-scale we we backlog ago. of a years might little one is remember, here backlog that about bit the you of accumulated. a you bump -- of had that a go of that to This a the in here quite a it this were consolidation of businesses, was the business. eating had were ago, last time kind processing It a that one

time levels at we and so got bit of IDEX a replenishment. a standard lead now And issue of we're very because comparison

little bit a basis. So of there's a going to on issue, always be calibration particularly year-over-year a

that it's half energy it's business. actually the this where it all eventually it tend I'd CapEx just market. will downstream to So find and places that on way and go promote us. we of to And of overall an the you'd the little of in then probably do indirect energy that's take obviously, question see there bit a relationship, the is but sort say of Half sector of pressure forward, story the things their health that of the deployment

not. honest, really to do cold a winter to But will prefer would that we So it also really, rather little be has very and to have than help, with politics.

Vladimir Bystricky

sticking then Appreciate it. maybe Eric. Okay. just That's FMT. with And helpful,

rate in you've the on commentary whether versus of and you're terms the of domestic any can in trends? color differences day or orders, international geography seeing you by seen Just meaningful any seeing give you're in sort stability what

Eric Ashleman

Probably, the while, by as way. now leading you for the case suspect, a I lot. That's just little but been by a America a mean, North not

I of mean, North business. the little It's reasonable a stability piece for Not the it not Europe. I lot a bit. of in in we're around moves anyways. inflection, part more us particular think this American-centric bigger

story always then there. right would while the surgical would that on say that different sobering really globe, super has side And we're I mean, now of in doing course, I a been other and good. story. go really, China I almost is say anything we've the when is overall, -- you of is some India characteristics, --

our what to representative where entirety are and probably we because own choose they're And that of we very certain is so it make part just it's of it's honestly a in we're of. more trailing bets the But economy. holding of because than places pack the that small, -- certain

say So bit a North put going at India I if us. IDEX; Europe a back, in for it's to smallest you're lot China little lagging positive put I'd that's but a piece but behind. probably stable probably it; and them driving is still and the first, order, America, would strong, of of

Operator

with Sprague Jeff question Our Vertical is next Partners. from Research

Jeffrey Sprague

blanket there's I going got the of normalization actually firm there on helps sort want kind up anything to of to of in. come there Eric, starting the view back customers, Obviously, again of that orders just XXXX? the in some to size into a be here. sort the HST number come and is to orders of orders

course have So just their right, context, here. maybe channel run your we're apparently to of maybe some and normalization is the getting liquidations inventory sort

Eric Ashleman

they comparison into I generalized of think you you and you up one them all a them have course, put strong they're each even kind the it's though, get sharp you still are general they're terms and And entries, some all in dig together, of kind more more when of of would all. I positive. add them actually to -- of conclusions. how But interpolate year-over-year, think

So and cited you one there.

about life a laying something something of the the these of towards across laying tell are does you science So and different. in kind stability it that in from fact point spectrum, moving

up pretty of I'd rate still not particular rate in hold yet. advancement, determined inflection, the of Again, vague the really that that space. and

hear the Just teams listen a little to that with the out comments bit are are having you ones public, customers, more. there our that optimism in

that in things we lead fleet people side the which are at consumables, way some and of often some point. cycle, about where for hear around instruments talking aging some You the

quarter-to-quarter are for say point important. inventory some again, left general little yet. doesn't really as as about, out we're it's and on appreciate these can talked them we if too what of is But And that of or mean, sciences ones. as But reminder have there And inventory history businesses right slow track those preponderance other and are a that's some dynamic had the this the But there, we've of life OEM-centric kind walked slope going the that where so last over concentration, customers page it And year The of been there's a this it you semi There way, it's a areas not and higher around. working spaces. building. sort of of it's build it I over the little HST. are have the the those the you some be of at to and there side pieces. to space. thinking areas is opposed like see just of kind then been customer

again, does further there health some and that all rough across you're uniform the it that. that then fact And the kind it's and reporting they're important not. areas they're the patterns sort too so again that further and positive like of organic side side order have order the they're that but the ledger the -- the suggest have, additively level there's of extent Those from segment. and generalized, on we things the just away And in of are of this, got versus of

Jeffrey Sprague

just coming maybe China. then And to Understood. back

on quarter kind view also if were be weren't. on price you just in give the would on ago think moment the just of total helpful. related how FMT, it on quarter? IDEX context comments just I in us can they the to picture big And your performed just a But I China, any prior apologize -- China

Eric Ashleman

Yes.

the commentary. giant a well. fire in because part, basically I that and would geography it things segment of And same On it's based. a say it's full with have It's that's the line tiny a of there. -- they're lead some the put two as we kind have kind of together, the first of product FMT company piece far off, not FMT presence Really versus we lot

And so which move -- of in out kind and way the on depending is we wind blowing. and

company, with advantage, an generally we as positive Abhi? small think a we all technical category a we've is that quite better. in otherwise so heavier which at in holds story, got of piece the go we a not stays -- for it maybe up still little something And And when least positive again,

Abhishek Khandelwal

point And and Yes. saw pricing then you on the guidance about in XXX the that spread in of quarter part question basis the price we QX. we that had, talked X.X% about as

we where that's So for the landed quarter.

Eric Ashleman

And both yes. the equation, on holding that's been of steady, side the

Operator

question next is Our with from Andrew Buscaglia BNP Paribas.

Andrew Buscaglia

I wanted to ask on HST.

Maybe questions pickup talking there's still semis. a [ a few You're ] there. in about

than into saying, within sooner for wouldn't across subsegments discussed X that midyear year? up the customers impact margins how the And margin you here? going you those see And guys the that giving why next then from is HST? would pick that insight are recovery we differential have comment, what Just

Eric Ashleman

of question pieces perspective a I'll really, manufacturing semi I work We're part That's again, IDEX involved on think the mean second. of on really, a all take that I'll narrow Well, first Abhi do wafer and the pretty solutions. from And principally right. fabrication and All in do really the and business metrology, we utilization. where advanced there. almost in I chime do it. it's I factory think let focused

hits taking there it's doesn't yet term. that it takes looks the big levels take going items to ticket of it level. it to kind just another until overall, I a identifiable drive at near in and up like catalyst mean, it there it that's there's certain that a level or either

pretty there's regard. So a public been announcements series that in of

But singular massive any that of specialized. this things present more doesn't the I big in probably think volume. pointing to in that lot really itself obviously people point lack happening of AI. at are It's the beyond catalyst

of limits ever, of consumer than are to whether things think of think I so advanced PCs I want looking kind And time a some gear you'd some a be where point more of the for to that's -- line rates that pretty then those long in push upper lots gear. the or to lead get kind to return it's those are you'd for and still take utilization

this see projection it that. allow tomorrow, little given that so of and does probably to a kind nobody you bit future today for the orders delivery into a stuff And like make

next for we've of for doesn't And got of are that that's all for mean, really that incredible It's cycle it. are an just there. us. assets we So amount we're positioned bad the because kind again, now a market just waiting necessarily

Abhishek Khandelwal

Yes.

And your question. a take so at margin I'll stab

a So margins to down is, on year-over-year have work basis, costs, true teams Because that XX just I'd rightsizing points think about and teams our of testament a mean, X%, a it's say done do didn't HST businesses, you'd frankly. sales kind did the higher X% to organically year-over-year our the the they a on on our So take basis if you're being where in basis. down down I organic out right? you were work see much decline HST

going clear plan in points it generate very to XXX Mott of the demonstrates said Then XX% was XX So XX.X% acquisition we're in were to EBITDA right? we you So and the profile, does we today look as driving saw at price kudos gates. XXX -- the at that the coupled margin have and spread that We next cost EBITDA look coupled a to our then team out rightsizing size, the low improvement what of segment, moving with announced we So the Mott. sit that like? months. for forward, of XX here basis to that productivity,

the not to a coupled put So it all in be you when HST coming growth reason together, for there's no EBITDA XX% organic with low business. back the future,

Andrew Buscaglia

Okay. with Maybe sticking Got margins. helpful. That's it.

you feel sort back Your but with have years, has calamity. now good, are been cost like of up, navigate And tariffs guys every in some to coming news. election the I chain price few supply the

us you ready are picture can like you where you're if come the remind getting indeed, with into So tariffs how your positioning, back for that? and

Eric Ashleman

pandemic more we're or as company that, shipments of at like saw it's we where experienced we we're we it's remind are, mean thinking that be should terms whether environment the pressure think doing within input pandemic, and I I certain sell. will every chain as look, are the about probably there item that, -- in same this on ideating the kind in would this placed well, doesn't the an to aren't our we we too. and I supply chain mean, and localized in supply an be people, certain There advantage I geography produce in and mean, and resilient, supply It levels side. base-level orders advantage much of cross-border actually commodities. Well,

an within work country. But lot of do we awful

as tends tackling kind about that and critical running the of we're, we around and of think So we anybody inputs that scenarios company built talking we are localized be model like a else, course, to anyways. it more of appreciative

Operator

is next Our Brett from question Mizuho. Linzey with

Brett Linzey

those you I QX. discretionary? sequentially then bridge hoping paybacks. to Is the $XX up wanted versus could And of resource targeted resource I some is the investment/discretionary, the step-up was just to unbundle maybe that back Fairly EBITDA speak you specifically going million. investment come to and this and offset could Or lower investments too? the by discretionary big if those.

Abhishek Khandelwal

item the bridge first. let Yes, take me

that out to So a you're if look you headwind the million question put at the on bridge $XX a you're we asking. basis, seeing there tied year-over-year

tied we to of just the on a did year-over-year higher largest spend X/X with basis say, transaction Mott. given that is M&A I'd fact So that our

it. X/X about that's of So

and the comps comp spend are that And we on X/X timing stock to year. initiatives is is and here tailwind a stock to other the this basis. that customer-facing we tied discretionary then growth there of The the in year-over-year to year to making tied and investments last tied saw T&E compared some

Brett Linzey

maybe And just to back Okay. then that. Appreciate Mott. shifting

based running So forward think the accretion it all? XXXX Good that start? ahead target sounds at your expectation there. you're And like pulled thinking we integration on or Should fast progress. does this change about getting

Abhishek Khandelwal

Well, acquisition. plans, with in look, the weeks working We're we're early partnering X the local the days. teams. We're

plan partnering next are out months. a together over XX the Our Mott teams and teams laying the and

early it's to is to to 'XX versus what it's hard pinpoint so going days So do. 'XX

Eric Ashleman

I and what you you're every as get we always as think And it, you going part you to the convey in. then want is here thought pass bit of to line, is is coming close business the we what -- good certain course, there. This of a it. and that reality meet reality

Abhishek Khandelwal

Yes.

Eric Ashleman

for we That's work integrate all an fact do. the acquisition XXs we some as in. the were as a read, the do. to And early you got teams excitement, we that out. many we're we fast And But to we with It's early of sure that out happier that of able as point, still in are, front we world's real at us testament. it's just play possibilities make there's least see playing at an what couldn't got lot acquired. to want be The awful to that this

Operator

Joe with is question Our next Giordano Cowen. from TD

Joseph Giordano

touch to on more I M&A. other recent of -- the other wanted some the

expectations So quarter. for last you guys EA, lowered your

then customers large talked of about that's orders. your also some you've given tracking. pushouts gave one how curious Just curious disappointing the semi on And Muon just and

businesses. is latest the those X what curious just So on

Abhishek Khandelwal

you not Can you. Apologies. talk sorry. about I'm followed EA I I'm what means? sure

Joseph Giordano

sorry. Sorry,

was Just focus mistake my there. Muon. on That

of your weakness in large one Just Muon, given at . orders customers. like the

Eric Ashleman

I of that -- a mean, means it look, majority of of even it by it. Yes. or not piece all that's no is business. the It's

doing of So that business actually I well is delivered some look, that being it today. pretty -- even advanced we're a -- is -- mean, ahead machines there, portion doing that's of work are and

of a So kind there's one-for-one corollary. not

out a end, long help So there it. And cycle, well there's that positioned. super ultimately, side on at things that few the of

got that one presence very tech well. inventory as are markets in It's well it's doing positions. some different adjacency got because some another in It's actually that's a med exiting

good at not a an business of the suspect holding but than and little components, terms it's it's X that I positioned pretty So the and cycle. production a in And times other think, entirely decent you is well of different component up. it, might semi-driven

it all is considering have applied works Business in now a of we it of And material with including together, science businesses we're other that how technology terms piece Mott.

So some of and of ways, all that work together. it we'll of be kind recasting in some doing rescaling,

Joseph Giordano

Interesting.

the curious on HST. in Okay. just growth And sequential then

it You was it said actual was demand. -- half roughly like half of of

Just the kind Or life of is curious more Just lab? side. bioprocessing? that? science is of customers cohort we Are really driving on more like which it talking

Eric Ashleman

the areas. of our pronounced course, Well, of space be just for almost in the bio to because has analytical kind We're us, it kind of instrumentation in not presence. as

Operator

with question from Melius Rob is next Our Wertheimer Research.

Robert Wertheimer

your Eric, remarks touched listening but and is tools was to prepared the and I of analog conversion you the in late it's know don't call, on you're to know I you I processes before. this if digital guys I'm further your on the if had broad wondering how operate comments were expansion slightly evolving time. how team. any And you more -- on something

Eric Ashleman

assemble a it's that of the of ago imagine Look, that more scale But theme the of Yes. us started across to we're smaller was IDEX. this all purposefully, as is actually pieces kind harder of years one to areas for we applying it.

of these the is franchises a which nature, examples more to of and of interactions industrial on end end of a kind so couple Doing level. work of between of And the the more than a FMT fragmented, ourselves next more digital I'll lot outstanding front give in that ever. nature customers but the you lot are rise

market would how it at spaces. the we're be lot to in with for looking market scale we -- as information, a calls we've that versus intervene you of those leading to automated and manually has And some see out knowledge this that If initiatives to mean, way the I got there is a many looking to now, for of we've happen. for things that you done, how how in the sure is somebody leader we had us FMT. the a starting going kind way there lead can work focused make more think does a people while like of would So are do? very some And to playing do. leader but transfer

a the solution, strong decent the there. not out a a solutions but take and part that's numbers all to growth you automation there. about and helping functionality industry, On the And side, in about automation, this it's change That's size. some real problem up. see traction crew to but get We've solve of talked ubiquitous put starting at they've slower digital It's it and this the is that playing fire.

We talked more now digitally about more shown is ultimately information our all than core, hardware seamless water and before. businesses. At it and was is presents integrated that the that

So it's And of sure just bit start -- that a little company more this I wanted make IDEX-like in becoming to thematic participating to organization, larger way. benefits people get a own appreciate you our way. that part in we're and

Operator

comments. I would floor Ashleman questions back Eric to you. no to There are closing Thank this further any hand for at the over time. like

Eric Ashleman

of joining no the great the HST, out the a for that in from I to much. everybody the the point. see We're IDEX. questions uptick see but interest. to Thanks and woods wait We'll so yet orders appreciate I the good And how But uncertain to bit, Thanks doubt. really recovery backlog plays still choppy look, here, today. a really orders have world, high strong and we're line it's at sequential a here. build at not spot out year-over-year the think modest bottom for comp, and a

for here lot a good think our really doubt, end indicator Mott as at acquisitions. prepare of that. ahead, days the is But look, cycle the of And no we've through we I a sunnier ourselves a portfolio strengthened

the IDEX is And across some growth. a always, are be as think board. at doing really two the away decade, nice to overall of months value We well IDEX. other pockets it's creation really, half is execution, segments from only period way, second of Our going starting, with by the of the which, for strong X tremendous

day. look the talking it in Have And to to come. you with a quarters I great about forward really Thanks.

Abhishek Khandelwal

you. Thank

Wendy Palacios

Thank you.

Operator

This conference. today's concludes

you lines time. this your your for disconnect Thank participation. may at You

IDEX (IEX) 30 Oct 242024 Q3 Earnings call transcript