IDEX CORP /DE/ [IEX] Filings

10-Q 1 iex-20240630.htm 10-Q iex-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

Form 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from	to

Commission File Number: 1-10235

IDEX CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

36-3555336

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

3100 Sanders Road,

Suite 301,

Northbrook,

Illinois

60062

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (847) 498-7070

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01 per share

IEX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Number of shares of common stock of IDEX Corporation outstanding as of July 26, 2024: 75,703,395.

TABLE OF CONTENTS


Part I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
	Note 1. Basis of Presentation and Significant Accounting Policies	6
	Note 2. Acquisitions and Divestitures	6
	Note 3. Business Segments	9
	Note 4. Revenue	10
	Note 5. Earnings Per Common Share	13
	Note 6. Balance Sheet Components	14
	Note 7. Goodwill and Intangible Assets	14
	Note 8. Borrowings	16
	Note 9. Fair Value Measurements	16
	Note 10. Accumulated Other Comprehensive Loss	18
	Note 11. Share Repurchases	19
	Note 12. Share-Based Compensation	19
	Note 13. Retirement Benefits	22
	Note 14. Commitments and Contingencies	23
	Note 15. Income Taxes	23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

Part II. Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

Cautionary Statement Under the Private Securities Litigation Reform Act

This quarterly report on Form 10-Q, including the “Overview,” “Results of Operations” and “Liquidity and Capital Resources” sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, the Company’s business strategy, outlook and the assumptions underlying these expectations, plant and equipment capacity for future growth, planned production, anticipated future acquisition behavior and capital deployment, inventory recalibration and future order stabilization and lead time, expectations regarding market sector contraction, recovery, stabilization or growth, availability and sufficiency of cash and financing alternatives, the anticipated benefits of the Company’s recent acquisitions and the expected timing for the closing of the Mott Corporation acquisition, and are indicated by words or phrases such as “anticipates,” “estimates,” “plans,” “guidance,” “expects,” “projects,” “forecasts,” “should,” “could,” “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 report.

The risks and uncertainties include, but are not limited to, the following: levels of industrial activity and economic conditions in the U.S. and other countries around the world, including uncertainties in the financial markets; pricing pressures, including inflation and rising interest rates, and other competitive factors and levels of capital spending in certain industries; the impact of catastrophic weather events, natural disasters and public health threats; economic and political consequences resulting from terrorist attacks and wars; the Company’s ability to make acquisitions and to integrate and operate acquired businesses on a profitable basis; cybersecurity incidents; 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; developments with respect to trade policy and tariffs; interest rates; capacity utilization and the effect this has on costs; labor markets; supply chain conditions; market conditions and material costs; risks related to environmental, social and corporate governance issues, including those related to climate change and sustainability; and developments with respect to contingencies, such as litigation and environmental matters.

Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included in the Company’s most recent annual report on Form 10-K and the Company’s subsequent quarterly reports filed with the Securities and Exchange Commission (“SEC”) and the other risks discussed in the Company’s filings with the SEC. The forward-looking statements included here are only made as of the date of this report, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net sales	$	807.2	$	846.2	$	1,607.7	$	1,691.6
Cost of sales	440.4		468.2		883.5		931.1
Gross profit	366.8		378.0		724.2		760.5
Selling, general and administrative expenses	182.8		174.3		377.9		364.0
Restructuring expenses and asset impairments	1.3		3.6		2.4		4.1
Operating income	182.7		200.1		343.9		392.4
Gain on sale of business	(4.6)		—		(4.6)		—
Other expense (income) – net	—		8.3		(2.7)		7.7
Interest expense – net	8.1		13.3		17.5		26.4
Income before income taxes	179.2		178.5		333.7		358.3
Provision for income taxes	38.0		40.0		71.2		80.0
Net income	141.2		138.5		262.5		278.3
Net loss attributable to noncontrolling interest	0.1		0.1		0.2		0.1
Net income attributable to IDEX	$	141.3	$	138.6	$	262.7	$	278.4

Earnings per common share:
Basic earnings per common share attributable to IDEX	$	1.86	$	1.83	$	3.46	$	3.68
Diluted earnings per common share attributable to IDEX	$	1.86	$	1.82	$	3.46	$	3.66

Share data:
Basic weighted average common shares outstanding	75.7		75.6		75.7		75.6
Diluted weighted average common shares outstanding	75.9		75.9		75.9		75.9

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	141.2	$	138.5	$	262.5	$	278.3
Other comprehensive (loss) income:
Pension and other postretirement adjustments, net of tax	(0.2)		(0.9)		(0.3)		(0.5)
Cumulative translation adjustment	(6.0)		2.3		(70.3)		38.9
Other comprehensive (loss) income	(6.2)		1.4		(70.6)		38.4
Comprehensive income	135.0		139.9		191.9		316.7
Comprehensive loss attributable to noncontrolling interest	0.1		0.1		0.2		0.1
Comprehensive income attributable to IDEX	$	135.1	$	140.0	$	192.1	$	316.8

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share amounts)

(unaudited)


	June 30, 2024		December 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	700.7	$	534.3
Receivables – net	426.2		427.8
Inventories – net	427.9		420.8
Other current assets	74.7		63.4
Total current assets	1,629.5		1,446.3
Property, plant and equipment – net of accumulated depreciation of $564.8 and $545.7, respectively	419.1		430.3
Goodwill	2,787.2		2,838.3
Intangible assets – net	930.9		1,011.8
Other noncurrent assets	136.6		138.5
Total assets	$	5,903.3	$	5,865.2
LIABILITIES AND EQUITY
Current liabilities
Trade accounts payable	$	172.4	$	179.7
Accrued expenses	252.0		271.5
Current portion of long-term borrowings	0.6		0.6
Dividends payable	52.4		48.5
Total current liabilities	477.4		500.3
Long-term borrowings – net	1,297.3		1,325.1
Deferred income taxes	281.3		291.9
Other noncurrent liabilities	193.9		206.7
Total liabilities	2,249.9		2,324.0
Commitments and contingencies (Note 14)
Shareholders’ equity
Preferred stock:
Authorized: 5.0 million shares, $.01 per share par value; Issued: None	—		—
Common stock:
Authorized: 150.0 million shares, $.01 per share par value
Issued: 90.1 million shares at both June 30, 2024 and December 31, 2023	0.9		0.9
Treasury stock at cost: 14.2 million shares at June 30, 2024 and 14.3 million shares at December 31, 2023	(1,179.1)		(1,187.0)
Additional paid-in capital	855.9		839.0
Retained earnings	4,092.5		3,934.3
Accumulated other comprehensive loss	(116.4)		(45.8)
Total shareholders’ equity	3,653.8		3,541.4
Noncontrolling interest	(0.4)		(0.2)
Total equity	3,653.4		3,541.2
Total liabilities and equity	$	5,903.3	$	5,865.2

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in millions)

(unaudited)


	Common Stock Shares	Common Stock and Additional Paid-In Capital		Treasury Stock Shares	Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders’ Equity		Noncontrolling Interest		Total Equity
Three Months Ended June 30, 2024
Balance, March 31, 2024	90.1	$	852.4	14.2	$	(1,179.3)	$	(110.2)	$	4,055.7	$	3,618.6	$	(0.3)	$	3,618.3
Net income (loss)	—	—		—	—		—		141.3		141.3		(0.1)		141.2
Cumulative translation adjustment	—	—		—	—		(6.0)		—		(6.0)		—		(6.0)
Net change in retirement obligations (net of tax of $0.1)	—	—		—	—		(0.2)		—		(0.2)		—		(0.2)
Net issuance of shares of treasury stock (net of tax of $0.2)	—	—		—	0.2		—		—		0.2		—		0.2
Share-based compensation	—	4.4		—	—		—		—		4.4		—		4.4
Cash dividends declared - $1.38 per common share	—	—		—	—		—		(104.5)		(104.5)		—		(104.5)
Balance, June 30, 2024	90.1	$	856.8	14.2	$	(1,179.1)	$	(116.4)	$	4,092.5	$	3,653.8	$	(0.4)	$	3,653.4

Six Months Ended June 30, 2024
Balance, December 31, 2023	90.1	$	839.9	14.3	$	(1,187.0)	$	(45.8)	$	3,934.3	$	3,541.4	$	(0.2)	$	3,541.2
Net income (loss)	—	—		—	—		—		262.7		262.7		(0.2)		262.5
Cumulative translation adjustment	—	—		—	—		(70.3)		—		(70.3)		—		(70.3)
Net change in retirement obligations (net of tax of $0.1)	—	—		—	—		(0.3)		—		(0.3)		—		(0.3)
Net issuance of shares of treasury stock (net of tax of $2.4)	—	—		(0.1)	7.9		—		—		7.9		—		7.9
Share-based compensation	—	16.9		—	—		—		—		16.9		—		16.9
Cash dividends declared - $1.38 per common share	—	—		—	—		—		(104.5)		(104.5)		—		(104.5)
Balance, June 30, 2024	90.1	$	856.8	14.2	$	(1,179.1)	$	(116.4)	$	4,092.5	$	3,653.8	$	(0.4)	$	3,653.4

Three Months Ended June 30, 2023
Balance, March 31, 2023	90.1	$	830.9	14.4	$	(1,184.0)	$	(89.2)	$	3,671.5	$	3,229.2	$	0.3	$	3,229.5
Net income (loss)	—	—		—	—		—		138.6		138.6		(0.1)		138.5
Cumulative translation adjustment	—	—		—	—		2.3		—		2.3		—		2.3
Net change in retirement obligations (net of tax of $0.4)	—	—		—	—		(0.9)		—		(0.9)		—		(0.9)
Net issuance of shares of treasury stock (net of tax of $0.3)	—	—		—	3.1		—		—		3.1		—		3.1
Repurchases of common stock	—	—		—	(1.1)		—		—		(1.1)		—		(1.1)
Share-based compensation	—	4.2			—		—		—		4.2		—		4.2
Cash dividends declared - $1.28 per common share	—	—		—	—		—		(96.7)		(96.7)		—		(96.7)
Balance, June 30, 2023	90.1	$	835.1	14.4	$	(1,182.0)	$	(87.8)	$	3,713.4	$	3,278.7	$	0.2	$	3,278.9

Six Months Ended June 30, 2023
Balance, December 31, 2022	90.1	$	818.1	14.5	$	(1,184.3)	$	(126.2)	$	3,531.7	$	3,039.3	$	0.3	$	3,039.6
Net income (loss)	—	—		—	—		—		278.4		278.4		(0.1)		278.3
Cumulative translation adjustment	—	—		—	—		38.9		—		38.9		—		38.9
Net change in retirement obligations (net of tax of $0.2)	—	—		—	—		(0.5)		—		(0.5)		—		(0.5)
Net issuance of shares of treasury stock (net of tax of $2.1)	—	—		(0.1)	3.4		—				3.4		—		3.4
Repurchases of common stock	—	—		—	(1.1)		—		—		(1.1)				(1.1)
Share-based compensation	—	17.0		—	—		—		—		17.0		—		17.0
Cash dividends declared - $1.28 per common share	—	—		—	—		—		(96.7)		(96.7)		—		(96.7)
Balance, June 30, 2023	90.1	$	835.1	14.4	$	(1,182.0)	$	(87.8)	$	3,713.4	$	3,278.7	$	0.2	$	3,278.9

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities
Net income	$	262.5	$	278.3
Adjustments to reconcile net income to net cash flows provided by operating activities:
Gain on sale of business	(4.6)		—
Credit loss on note receivable from collaborative partner	—		7.7
Depreciation	32.5		27.2
Amortization of intangible assets	48.5		46.8
Share-based compensation expense	16.9		17.0
Deferred income taxes	0.4		—
Changes in (net of the effect from acquisitions/divestitures and foreign currency translation):
Receivables – net	(11.9)		(5.8)
Inventories – net	(19.8)		(2.0)
Other current assets	(12.2)		(18.6)
Trade accounts payable	0.3		(17.9)
Deferred revenue	0.3		4.2
Accrued expenses	(21.9)		(52.5)
Other – net	(0.8)		4.7
Net cash flows provided by operating activities	290.2		289.1
Cash flows from investing activities
Capital expenditures	(35.9)		(48.2)
Acquisition of business, net of cash acquired	1.6		(110.3)
Proceeds from sale of business, net of cash remitted	45.5		—
Purchases of marketable securities	—		(19.1)
Other – net	0.5		1.0
Net cash flows provided by (used in) investing activities	11.7		(176.6)
Cash flows from financing activities
Proceeds from issuance of long-term borrowings	—		100.0
Payment of long-term borrowings	(25.0)		(100.0)
Cash dividends paid to shareholders	(100.7)		(93.9)
Proceeds from share issuances, net of shares withheld for taxes	7.9		3.4
Repurchases of common stock	—		(1.0)
Other – net	(0.4)		(0.5)
Net cash flows used in financing activities	(118.2)		(92.0)
Effect of exchange rate changes on cash and cash equivalents	(17.3)		6.3
Net increase in cash and cash equivalents	166.4		26.8
Cash and cash equivalents at beginning of year	534.3		430.2
Cash and cash equivalents at end of period	$	700.7	$	457.0

Supplemental cash flow information
Cash paid for:
Interest	$	23.0	$	25.1
Income taxes – net	84.6		102.9

See Notes to Condensed Consolidated Financial Statements

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

1. Basis of Presentation and Significant Accounting Policies

The Condensed Consolidated Financial Statements of IDEX Corporation (“IDEX” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The statements are unaudited but include all adjustments, consisting only of recurring items, except as noted, that the Company considers necessary for a fair presentation of the information set forth herein. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the entire year.

The Condensed Consolidated Financial Statements set forth in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recently Issued Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves the disclosures required for reportable segments in the Company’s annual and interim financial statements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Adoption of this ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on the Consolidated Financial Statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to disclose standard categories in tax rate reconciliation, additional information for reconciling items that meet a quantitative threshold and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Adoption of this ASU should be applied prospectively, but may be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on the Consolidated Financial Statements and disclosures.

2. Acquisitions and Divestitures

All of the Company’s acquisitions of businesses have been accounted for under Accounting Standards Codification (“ASC”) 805, Business Combinations. Accordingly, the assets and liabilities of the acquired companies, after adjustments to reflect the fair values assigned to the assets and liabilities, have been included in the Condensed Consolidated Balance Sheets from their respective dates of acquisition. The results of operations of businesses acquired have been included in the Condensed Consolidated Statements of Income since their respective dates of acquisition. Supplemental pro forma information has not been provided as the acquisitions did not have a material impact on the Condensed Consolidated Financial Statements individually or in the aggregate.

The Company makes a preliminary allocation of the purchase price for each acquisition as of the acquisition date based on its understanding of the fair value of the acquired assets and assumed liabilities. These nonrecurring fair value measurements are classified as Level 3 in the fair value hierarchy. As the Company continues to obtain additional information, primarily related to the valuations of these assets and liabilities, and continues to integrate the newly acquired business, the Company will refine the estimates of fair value and more accurately allocate the purchase price through the completion of the measurement period, which is not to exceed one year from the date of acquisition. Only items that existed as of the acquisition date are considered for subsequent adjustment to the purchase price allocation.

Pending Acquisitions

Mott Corporation

On July 23, 2024, the Company entered into a definitive agreement to acquire Mott Corporation and its subsidiaries (“Mott”) for cash consideration of $1.0 billion, subject to customary adjustments. The acquisition is expected to close by the end of the third quarter of this year, subject to regulatory approvals and customary closing conditions. The acquisition is

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

expected to be funded using a combination of cash on hand, borrowings under the Company’s Revolving Credit Facility and potential debt issuance. Mott is a leading microfiltration business specializing in the design, customization and manufacturing of sintered porous metal components and engineered solutions used in fluidic applications. Mott will operate in the Company’s Health & Science Technologies segment.

2024 Acquisitions

Subterra AI, Inc.

On July 25, 2024, the Company acquired Subterra, AI, Inc. (“Subterra AI”) for cash consideration of $7.5 million, subject to customary adjustments. Subterra AI is a technology company that specializes in digitizing underground infrastructure. Subterra AI will operate in the Company’s Fluid Metering and Technologies segment.

2023 Acquisitions

Iridian

On May 19, 2023, the Company acquired Iridian Spectral Technologies (“Iridian”) in a stock acquisition. Iridian is a global leader in designing and manufacturing thin-film, multi-layer optical filters serving the laser communications, telecommunications and life sciences markets and expands the Company’s array of optical technology offerings. Headquartered in Ottawa, Canada, Iridian operates in the Company’s Scientific Fluidics & Optics reporting unit within the Health & Science Technologies segment. Iridian was acquired for cash consideration of $109.8 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $54.2 million and $44.1 million, respectively. The goodwill is not deductible for tax purposes. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of the acquired business.

As of June 30, 2024, the final allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:


	Total
Current assets, net of cash acquired	$	10.6
Property, plant and equipment	19.4
Goodwill	54.2
Intangible assets	44.1
Other noncurrent assets	5.4
Total assets acquired	133.7
Current liabilities	(1.2)
Deferred income taxes	(17.8)
Other noncurrent liabilities	(4.9)
Net assets acquired	$	109.8

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The acquired intangible assets and weighted average amortization periods are as follows:


	Total		Weighted Average Life
Trade names	$	5.2	15
Customer relationships	27.8		12
Unpatented technology	11.1		11
Acquired intangible assets	$	44.1

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

STC

On December 14, 2023, the Company acquired STC Material Solutions (“STC”) in a stock acquisition. STC specializes in the design and manufacturing of technical ceramics and hermetic sealing products for critical applications in the semiconductor, aerospace and defense, industrial technology, medical technology and energy markets. Headquartered in St. Albans, Vermont, with additional operations in Santa Ana, California, STC operates in the Company’s Scientific Fluidics & Optics reporting unit within the Health & Science Technologies segment. STC was acquired for cash consideration of $200.4 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $104.2 million and $92.3 million, respectively. The goodwill is not deductible for tax purposes. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of the acquired business.

As of June 30, 2024, the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:


	Total
Current assets, net of cash acquired	$	16.9
Property, plant and equipment	12.7
Goodwill	104.2
Intangible assets	92.3
Other noncurrent assets	2.9
Total assets acquired	229.0
Current liabilities	(5.5)
Deferred income taxes	(20.4)
Other noncurrent liabilities	(2.7)
Net assets acquired(1)	$	200.4

(1) The Company finalized the purchase price of STC, resulting in a $1.6 million downward adjustment to the purchase price. Funds were received by the Company in April 2024.

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The acquired intangible assets and weighted average amortization periods are as follows:


	Total		Weighted Average Life
Trade names	$	9.3	15
Customer relationships	63.0		15
Unpatented technology	20.0		11
Acquired intangible assets	$	92.3

Acquisition-Related Costs

The Company incurred acquisition-related costs of $2.5 million during both the three months ended June 30, 2024 and 2023 and $3.8 million and $3.6 million during the six months ended June 30, 2024 and 2023, respectively. These costs were recorded in Selling, general and administrative expenses and were related to completed, pending and potential transactions, including transactions that ultimately were not completed. The Company also recorded a $2.5 million fair value inventory step-up charge associated with the completed 2023 acquisition of STC in Cost of sales during the six months ended June 30, 2024. There were no step-up charges recorded during the three months ended June 30, 2024.

Divestitures

The Company periodically reviews its businesses relative to its core business. As such, from time to time, the Company may sell various businesses or assets for a variety of reasons. Any resulting gain or loss recognized due to divestitures is recorded within Gain on sale of business in the Condensed Consolidated Statements of Income.

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

On June 3, 2024, the Company completed the sale of Alfa Valvole, Srl (“Alfa Valvole”) for proceeds of $45.5 million, net of cash remitted, resulting in a gain on the sale of $4.6 million, net of a release of cumulative foreign currency translation losses of $5.5 million. There was no income tax impact associated with this transaction in the Condensed Consolidated Statements of Income due to the participation exemption of its consolidated group. The results of Alfa Valvole were reported in the Valves reporting unit within the Fluid & Metering Technologies segment through the date of disposition.

3. Business Segments

IDEX has three reportable business segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified Products (“FSDP”). When determining these reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics.

Information on the Company’s business segments is presented below. The Company uses Adjusted EBITDA as its measure of segment performance. Intersegment sales are contracted with terms equivalent to those of an arm’s-length transaction.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
NET SALES
Fluid & Metering Technologies
External customers	$	318.9	$	324.1	$	632.4	$	645.2
Intersegment sales	0.5		1.0		0.7		1.7
Total segment sales	319.4		325.1		633.1		646.9
Health & Science Technologies
External customers	303.0		338.4		612.4		688.7
Intersegment sales	0.8		1.1		1.5		1.8
Total segment sales	303.8		339.5		613.9		690.5
Fire & Safety/Diversified Products
External customers	185.3		183.7		362.9		357.7
Intersegment sales	0.1		1.1		0.5		1.5
Total segment sales	185.4		184.8		363.4		359.2
Intersegment eliminations	(1.4)		(3.2)		(2.7)		(5.0)
Net sales	$	807.2	$	846.2	$	1,607.7	$	1,691.6
ADJUSTED EBITDA
Fluid & Metering Technologies	$	107.7	$	114.1	$	213.1	$	220.3
Health & Science Technologies	84.2		93.7		165.6		194.4
Fire & Safety/Diversified Products	53.8		54.5		105.2		104.2
Segment Adjusted EBITDA	245.7		262.3		483.9		518.9
Corporate and other(1)	(21.5)		(21.6)		(51.4)		(48.4)
Interest expense – net	(8.1)		(13.3)		(17.5)		(26.4)
Depreciation(2)	(16.3)		(14.4)		(32.5)		(27.2)
Amortization of intangible assets(2)	(23.9)		(23.2)		(48.5)		(46.8)
Fair value inventory step-up charges	—		—		(2.5)		—
Restructuring expenses and asset impairments	(1.3)		(3.6)		(2.4)		(4.1)
Gain on sale of business	4.6		—		4.6		—
Credit loss on note receivable from collaborative partner(3)	—		(7.7)		—		(7.7)
Income before income taxes	$	179.2	$	178.5	$	333.7	$	358.3

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

(1) Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder are included in Corporate and other.

(2) Depreciation and amortization of intangible assets by segment for the three and six months ended June 30, 2024 and 2023 was:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Fluid & Metering Technologies	$	9.5	$	9.8	$	19.1	$	18.9
Health & Science Technologies	26.7		23.7		53.8		46.9
Fire & Safety/Diversified Products	3.7		3.9		7.6		7.7
Corporate and other	0.3		0.2		0.5		0.5
Total	$	40.2	$	37.6	$	81.0	$	74.0

(3) Represents a reserve on an investment with a collaborative partner recorded in Other expense (income) – net during the three and six months ended June 30, 2023. During the fourth quarter of 2023, the Company converted the promissory note receivable from the collaborative partner to equity, resulting in a cost method investment with zero value.


	June 30, 2024		December 31, 2023
ASSETS
Fluid & Metering Technologies	$	1,653.1	$	1,674.7
Health & Science Technologies	3,175.9		3,262.4
Fire & Safety/Diversified Products	823.3		792.6
Corporate and other	251.0		135.5
Total assets	$	5,903.3	$	5,865.2

4. Revenue

Disaggregation of Revenue

The Company has a comprehensive offering of products, including technologies, built to customers’ specifications that are sold in niche markets throughout the world. The Company disaggregates revenue from contracts with customers by reporting unit and geographical region for each segment as the Company believes it best depicts how the amount, nature, timing and uncertainty of its revenue and cash flows are affected by economic factors. Revenue, presented as Net sales on the Condensed Consolidated Statements of Income, was attributed to geographical region based on the location of the customer. The following tables present revenue disaggregated by reporting unit and geographical region.

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Revenue by reporting unit for the three and six months ended June 30, 2024 and 2023 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Pumps	$	101.4	$	109.2	$	203.3	$	214.3
Water	88.9		87.3		171.9		181.4
Energy	57.7		55.7		110.3		106.4
Agriculture	38.6		40.1		78.3		78.7
Valves	32.8		32.8		69.3		66.1
Intersegment elimination	(0.5)		(1.0)		(0.7)		(1.7)
Fluid & Metering Technologies	318.9		324.1		632.4		645.2
Scientific Fluidics & Optics	157.6		169.0		320.3		347.6
Sealing Solutions	59.8		62.4		120.3		127.1
Performance Pneumatic Technologies	59.3		66.0		116.8		135.4
Material Processing Technologies	27.1		33.0		56.5		60.7
Micropump(1)	—		9.1		—		19.7
Intersegment elimination	(0.8)		(1.1)		(1.5)		(1.8)
Health & Science Technologies	303.0		338.4		612.4		688.7
Fire & Safety	111.7		109.8		216.8		216.0
Dispensing	45.1		44.7		86.6		80.9
BAND-IT	28.6		30.3		60.0		62.3
Intersegment elimination	(0.1)		(1.1)		(0.5)		(1.5)
Fire & Safety/Diversified Products	185.3		183.7		362.9		357.7
Net sales	$	807.2	$	846.2	$	1,607.7	$	1,691.6

(1) Revenue from Micropump, Inc. (sold on August 3, 2023) has been included in the Condensed Consolidated Statements of Income through the date of disposition.

Revenue by geographical region for the three and six months ended June 30, 2024 and 2023 was as follows:


	Three Months Ended June 30, 2024
	FMT		HST		FSDP		IDEX
U.S.	$	181.2	$	141.8	$	84.5	$	407.5
North America, excluding U.S.	17.3		4.7		8.9		30.9
Europe	55.3		98.5		46.3		200.1
Asia	41.5		53.8		36.5		131.8
Other(1)	24.1		5.0		9.2		38.3
Intersegment elimination	(0.5)		(0.8)		(0.1)		(1.4)
Net sales	$	318.9	$	303.0	$	185.3	$	807.2

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)


	Three Months Ended June 30, 2023
	FMT		HST		FSDP		IDEX
U.S.	$	180.7	$	148.5	$	96.7	$	425.9
North America, excluding U.S.	17.9		8.2		8.1		34.2
Europe	51.5		111.2		42.4		205.1
Asia	48.8		65.2		28.0		142.0
Other(1)	26.2		6.4		9.6		42.2
Intersegment elimination	(1.0)		(1.1)		(1.1)		(3.2)
Net sales	$	324.1	$	338.4	$	183.7	$	846.2


	Six Months Ended June 30, 2024
	FMT		HST		FSDP		IDEX
U.S.	$	353.8	$	280.7	$	170.6	$	805.1
North America, excluding U.S.	33.6		10.3		16.3		60.2
Europe	114.1		202.6		91.3		408.0
Asia	86.2		109.5		67.2		262.9
Other(1)	45.4		10.8		18.0		74.2
Intersegment elimination	(0.7)		(1.5)		(0.5)		(2.7)
Net sales	$	632.4	$	612.4	$	362.9	$	1,607.7


	Six Months Ended June 30, 2023
	FMT		HST		FSDP		IDEX
U.S.	$	357.5	$	298.1	$	186.1	$	841.7
North America, excluding U.S.	37.3		13.4		16.6		67.3
Europe	110.7		232.1		87.1		429.9
Asia	93.9		131.8		51.4		277.1
Other(1)	47.5		15.1		18.0		80.6
Intersegment elimination	(1.7)		(1.8)		(1.5)		(5.0)
Net sales	$	645.2	$	688.7	$	357.7	$	1,691.6

(1) Other includes: South America, Middle East, Australia and Africa.

Performance Obligations

The Company’s performance obligations are satisfied either at a point in time or over time as work progresses. Revenue from products and services transferred to customers at a point in time comprised approximately 95% of the Company’s revenue and over time comprised approximately 5% of the Company’s revenue in all periods presented.

Contract Assets and Liabilities

The timing of billings and cash collections can result in customer receivables, billings in excess of revenue recognized, advance payments or deposits. Customer receivables include both amounts billed and currently due from customers as well as unbilled amounts (contract assets) and are included in Receivables – net on the Condensed Consolidated Balance Sheets.

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

The composition of customer receivables was as follows:


	June 30, 2024		December 31, 2023
Billed receivables	$	407.6	$	408.1
Unbilled receivables	8.5		10.9
Total customer receivables	$	416.1	$	419.0

Billings in excess of revenue recognized, advance payments and deposits represent contract liabilities and are included in deferred revenue which is classified as current or noncurrent based on when the Company expects to recognize the revenue. The current portion is included in Accrued expenses and the noncurrent portion is included in Other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

The composition of deferred revenue was as follows:


	June 30, 2024		December 31, 2023
Deferred revenue – current	$	59.1	$	55.9
Deferred revenue – noncurrent	17.4		17.3
Total deferred revenue	$	76.5	$	73.2

5. Earnings Per Common Share

Diluted earnings per common share (“EPS”) attributable to IDEX is computed by dividing Net income attributable to IDEX by the weighted average number of common shares outstanding (basic) plus common stock equivalents outstanding (diluted) for the period. Common stock equivalents consist of restricted stock, performance share units and stock options, which have been included in the calculation of weighted average common shares outstanding using the treasury stock method.

ASC 260, Earnings Per Share (“ASC 260”), concludes that all outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common shareholders. If awards are considered participating securities, the Company is required to apply the two-class method of computing basic and diluted earnings per share. The Company has determined that its outstanding shares of restricted stock granted prior to the adoption of the 2024 Incentive Award Plan are participating securities. Under the 2024 Incentive Award Plan, dividend rights for restricted stock are subject to the same vesting requirements as the underlying restricted stock awards. Consequently, any restricted stock awarded under the 2024 Incentive Plan will not be considered participating securities. Accordingly, Diluted EPS attributable to IDEX was computed using the two-class method prescribed by ASC 260.

Basic weighted average common shares outstanding reconciles to diluted weighted average common shares outstanding as follows:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Basic weighted average common shares outstanding	75.7	75.6	75.7	75.6
Dilutive effect of restricted stock, performance share units and stock options	0.2	0.3	0.2	0.3
Diluted weighted average common shares outstanding	75.9	75.9	75.9	75.9

Share-based payment awards of approximately 0.5 million and 0.2 million shares of common stock for the three months ended June 30, 2024 and 2023, respectively, and 0.5 million and 0.2 million shares of common stock for the six months ended June 30, 2024 and 2023, respectively, were not included in the computation of Diluted EPS attributable to IDEX because the effect of their inclusion would have been antidilutive.

Table of Contents

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

6. Balance Sheet Components


	June 30, 2024		December 31, 2023
RECEIVABLES – NET
Customers	$	416.1	$	419.0
Other	17.5		16.3
Total	433.6		435.3
Less: allowance for credit losses	7.4		7.5
Receivables – net	$	426.2	$