IDEX Corporation Reports First Quarter 2008 Results; 12% Sales Growth, 11% Increase in Diluted EPS and 84% Increase in Free Cash Flow

IDEX Corporation (NYSE:IEX) today announced first quarter 2008 results. New orders in the quarter totaled $401.7 million, 12 percent higher than the prior-year period. Sales in the quarter totaled $371.7 million, 12 percent higher than the prior-year period. International sales represented approximately 47 percent of total sales for the first quarter of 2008 compared to 43 percent in the same period of the prior year. First quarter operating income of $68.1 million was 11 percent higher than the prior-year period. EBITDA of $80.3 million was an all-time record and represented a 13 percent increase compared to the prior-year period. Operating margin of 18.3 percent reflected a 20 basis point decline compared to the prior-year period, driven primarily by the impact of acquisitions. EBITDA as a percent of sales was 21.6 percent and increased 20 basis points from the prior-year period. Income from continuing operations of $41.4 million increased 12 percent over the first quarter of the previous year. Diluted earnings per share from continuing operations of 50 cents improved 5 cents, or 11 percent, from the first quarter of the previous year. First Quarter 2008 Highlights (from Continuing Operations) Orders increased 12% compared to the prior-year period (8 percent acquisitions, flat organic and 4 percent foreign currency translation) Sales increased 12% compared to the prior-year period (8 percent acquisitions, flat organic and 4 percent foreign currency translation) Operating margin of 18.3% was 20 basis points lower than the prior-year period Income increased 12% to $41.4 million Diluted EPS at 50 cents was 5 cents, or 11%, ahead of the prior-year period EBITDA of $80.3 million was 21.6% of sales and covered interest expense by more than 14 times First quarter free cash flow of $22.1 million was $10 million higher than prior-year period "We are pleased with our overall performance for the first quarter of 2008. Growth in the Fluid and Metering Technologies segment was driven by strong global demand in the process control and infrastructure-related end markets. In the Health and Science Technologies segment, we realized strong growth in the core health and science end markets. Within the Dispensing Equipment segment, timing of orders unfavorably impacted first quarter revenue. Despite softness in our fire suppression business, our engineered band clamping and rescue tools businesses performed well within the Fire & Safety/Diversified Products segment. For the second quarter of 2008, we expect solid performance in the Fluid and Metering Technologies segment as a result of continued strong global investment in the infrastructure-related markets and process control industries. Within the Health and Science Technologies segment, growth will be driven by strength in the core analytical instrumentation, IVD and biotechnology markets. Growth in the Dispensing Equipment segment will be driven by continued paint channel expansion in global markets and anticipated program orders in the large U.S. retail markets. We expect our Fire & Safety/Diversified Products segment to perform well, driven by strong demand for band clamping applications and global expansion of our rescue tools business, partially offset by continued weakness in the North American fire suppression market. Given these trends and current market conditions, we reaffirm our expected full year 2008 total revenue growth in the range of 13 to 15 percent and EPS in the range of $2.10 to $2.18 compared to $1.90 in the prior year. In addition, 2008 free cash flow is projected to exceed net income by 10 to 20 percent. For the second quarter of 2008, we project total revenue growth in the range of 14 to 16 percent and EPS in the range of 53 to 56 cents per diluted share. Overall, we are pleased with our first quarter 2008 results and we anticipate continued strong performance in 2008.” Lawrence D. Kingsley Chairman and Chief Executive Officer Business Highlights Fluid & Metering Technologies Sales in the first quarter of $170.9 million reflected 25 percent growth (17 percent acquisitions, 5 percent organic and 3 percent foreign currency translation). Growth was driven by continued global demand for infrastructure-related applications and acquisition performance. Operating margin of 20.0 percent represented a 180 basis point decline compared with the first quarter of 2007 primarily driven by the impact of recent acquisitions. Health & Science Technologies Sales in the first quarter of $83.6 million reflected 4 percent growth (4 percent acquisitions, -2 percent organic and 2 percent foreign currency translation). Strong growth in core analytical instrumentation, IVD and biotechnology markets coupled with acquisitions was partially offset by slow growth in specific pneumatic OEM markets. Operating margin of 18.0 percent represented an 80 basis point improvement compared with the first quarter of 2007, primarily driven by favorable mix. Dispensing Equipment Sales of $50.0 million in the first quarter reflected 4 percent growth compared with the first quarter of 2007 (-6 percent organic and 10 percent foreign currency translation). Growth was unfavorably impacted by order timing. Operating margin of 22.5 percent represented a 190 basis point decline compared with the first quarter of 2007, driven by lower volume. Fire & Safety/Diversified Products Sales in the first quarter of $68.7 million were essentially flat versus the prior year (-4 percent organic and 4 percent foreign currency translation). The engineered band clamping business as well as the rescue business achieved strong growth, offset by weak demand in the North American fire suppression market. Operating margin of 25.8 percent represented a 360 basis point increase compared with the first quarter of 2007, as a result of favorable mix. For the first quarter of 2008, Fluid & Metering Technologies contributed 46 percent of sales and 44 percent operating income; Health & Science Technologies accounted for 23 percent of sales and 19 percent of operating income; Dispensing Equipment accounted for 13 percent of sales and 14 percent of operating income; and Fire & Safety/Diversified Products represented 18 percent of sales and 23 percent of operating income. Bank Term Loan On April 18, 2008, IDEX Corporation closed a $100 million senior bank term loan with consistent covenants and expiration of the existing revolving credit facility. The term loan was timed to capitalize on current, favorable market conditions and will be used to fund the company’s ongoing capital deployment strategy which is primarily focused on acquisitive growth. Conference Call to be Broadcast over the Internet IDEX will broadcast its first quarter earnings conference call over the Internet on Tuesday, April 22, 2008 at 9:30 a.m. CT. Chairman and Chief Executive Officer Larry Kingsley and Vice President and Chief Financial Officer Dominic Romeo will discuss the company’s recent financial performance and respond to questions from the financial analyst community. IDEX invites interested investors to listen to the call and view the accompanying slide presentation, which will be carried live on its website at www.idexcorp.com. Those who wish to participate should log on several minutes before the discussion begins. After clicking on the presentation icon, investors should follow the instructions to ensure their systems are set up to hear the event and view the presentation slides, or download the correct applications at no charge. Investors also will be able to hear a replay of the call by dialing 800.642.1687 or 706.645.9291 and using conference ID #38180500. A Note on EBITDA and Free Cash Flow EBITDA means earnings before interest, income taxes, depreciation and amortization, while free cash flow means cash flow from operating activities less capital expenditures plus the excess tax benefit from stock-based compensation. Management uses these non-GAAP financial measures as internal operating metrics and for enterprise valuation purposes. Management believes these measures are useful as analytical indicators of leverage capacity and debt servicing ability, and uses them to measure financial performance as well as for planning purposes. However, they should not be considered as alternatives to net income, cash flow from operating activities or any other items calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definitions of EBITDA and free cash flow used here may differ from those used by other companies. EBITDA and Free Cash Flow bridge     For the Quarter Ended March 31,     December 31,   2008   2007 Change 2007 Change   Income before Taxes $62.6 $55.7 12 % $58.0 8 % Depreciation and Amortization 12.0 9.1 32 9.7 24 Interest 5.7 6.4 (11) 5.4 5 EBITDA 80.3 71.2 13 73.1 10 Cash Flow from Operating Activities 28.3 15.6 81 59.9 (53) Capital Expenditures 6.3 5.4 16 5.7 9 Excess Tax Benefit from Stock-Based Compensation 0.1 1.8 (93) 0.7 (83) Free Cash Flow 22.1 12.0 84 54.9 (60) Forward-Looking Statements This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These statements may relate to, among other things, capital expenditures, cost reductions, cash flow, and operating improvements and are indicated by words or phrases such as "anticipate,” "estimate,” "plans,” "expects,” "projects,” "should,” "will,” "management believes,” "the company believes,” "the company intends,” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this news release. The risks and uncertainties include, but are not limited to, the following: economic and political consequences resulting from terrorist attacks and wars; levels of industrial activity and economic conditions in the U.S. and other countries around the world; pricing pressures and other competitive factors, and levels of capital spending in certain industries – all of which could have a material impact on order rates and IDEX’s results, particularly in light of the low levels of order backlogs it typically maintains; its ability to make acquisitions and to integrate and operate acquired businesses on a profitable basis; the relationship of the U.S. Dollar to other currencies and its impact on pricing and cost competitiveness; political and economic conditions in foreign countries in which the company operates; interest rates; capacity utilization and the effect this has on costs; labor markets; market conditions and material costs; and developments with respect to contingencies, such as litigation and environmental matters. The forward-looking statements included here are only made as of the date of this news release, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here. About IDEX IDEX Corporation is an applied solutions company specializing in fluid and metering technologies, health and science technologies, dispensing equipment, and fire, safety and other diversified products built to its customers’ exacting specifications. Its products are sold in niche markets to a wide range of industries throughout the world. IDEX shares are traded on the New York Stock Exchange and Chicago Stock Exchange under the symbol "IEX”. For further information on IDEX Corporation and its business units, visit the company’s Web site at www.idexcorp.com. (Tables follow) IDEX CORPORATION Condensed Statements of Consolidated Operations (in thousands except per share amounts)     First Quarter Ended March 31,     2008   2007   Net sales $ 371,662 $ 333,268 Cost of sales   216,495   193,604   Gross profit 155,167 139,664 Selling, general and administrative expenses   87,068   78,112   Operating income 68,099 61,552 Other income - net 175 573 Interest expense   5,666   6,379   Income from continuing operations before income taxes 62,608 55,746 Provision for income taxes   21,229   18,915   Income from continuing operations 41,379 36,831 Loss from discontinued operations, net of tax   -   (164 ) Net income   $ 41,379   $ 36,667       Basic Earnings per Common Share: Continuing operations $ 0.51 $ 0.46 Discontinued operations   -   -   Net income   $ 0.51   $ 0.46     Diluted Earnings per Common Share: Continuing operations $ 0.50 $ 0.45 Discontinued operations   -   -   Net income   $ 0.50   $ 0.45       Share Data:   Basic weighted average common shares outstanding 81,067 80,264   Diluted weighted average common shares outstanding   82,288   81,677       Condensed Consolidated Balance Sheets (in thousands) March 31, December 31,     2008   2007   Assets Current assets Cash and cash equivalents $ 99,816 $ 102,757 Restricted cash - 140,005 Receivables - net 241,810 193,326 Inventories 200,925 177,435 Other current assets   26,377   23,615   Total current assets 568,928 637,138 Property, plant and equipment - net 179,762 172,999 Goodwill and intangible assets 1,329,597 1,168,785 Other noncurrent assets   5,731   10,672   Total assets   $ 2,084,018   $1,989,594     Liabilities and shareholders' equity Current liabilities Trade accounts payable $ 99,427 $ 84,209 Accrued expenses 104,838 99,125 Short-term borrowings 5,964 5,830 Dividends payable   -   9,789   Total current liabilities 210,229 198,953 Long-term borrowings 443,638 448,901 Other noncurrent liabilities   201,667   179,017   Total liabilities 855,534 826,871 Shareholders' equity   1,228,484   1,162,723   Total liabilities and shareholders' equity   $ 2,084,018   $1,989,594   IDEX CORPORATION Company and Business Group Financial Information (dollars in thousands)       First Quarter Ended March 31, (a)       2008   2007     Fluid & Metering Technologies Net sales $ 170,930 $ 136,706 Operating income (b) 34,245 29,751 Operating margin 20.0 % 21.8 % Depreciation and amortization $ 6,313 $ 3,549 Capital expenditures 2,391 2,636   Health & Science Technologies Net sales $ 83,642 $ 80,720 Operating income (b) 15,079 13,863 Operating margin 18.0 % 17.2 % Depreciation and amortization $ 2,953 $ 2,569 Capital expenditures 1,646 1,651   Dispensing Equipment Net sales $ 50,008 $ 47,893 Operating income (b) 11,233 11,704 Operating margin 22.5 % 24.4 % Depreciation and amortization $ 1,138 $ 547 Capital expenditures 530 292   Fire & Safety/Diversified Products Net sales $ 68,663 $ 69,196 Operating income (b) 17,730 15,358 Operating margin 25.8 % 22.2 % Depreciation and amortization $ 1,354 $ 1,525 Capital expenditures 1,107 886   Company Net sales $ 371,662 $ 333,268 Operating income 68,099 61,552 Operating margin 18.3 % 18.5 % Depreciation and amortization (c) $ 12,049 $ 9,139 Capital expenditures 5,977 5,783                   (a)   First quarter data includes acquisition of ADS (January 2008) and Quadro (June 2007) in the Fluid & Metering Technologies Group and Isolation Technologies (October 2007) in the Health & Science Technologies Group from the date of acquisition.   (b) Group operating income excludes unallocated corporate operating expenses.   (c) Excludes amortization of debt issuance expenses and unearned compensation.