IDEX(IEX) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Highlights IDEX Corporation reported strong Q1 2025 results with all segments exceeding expectations and positive strategic progress CEO Commentary & Strategic Outlook CEO Eric Ashleman reported better than expected Q1 2025 results, with all segments exceeding expectations and strategic initiatives on track, supported by proactive cost containment and a strong M&A funnel - All segments exceeded expectations in Q1 2025, delivering better than expected revenue and profitability, with significant backlog accumulation in HST due to a large clean water project win[2] - Platform optimization and delayering efforts are on track to achieve an anticipated total of $43 million impact for 2025[2] - An additional $20 million of cost containment savings for 2025 has been proactively identified to offset potential later-stage demand pressure, despite no current reduction in order rates in rapid-turn businesses[3] - IDEX maintains a strong strategic position characterized by high-quality businesses, critical solutions, long-tenured customer relationships, local operational flexibility, and a robust M&A funnel for long-term growth[4][5] Key Financial Metrics IDEX achieved record orders and positive organic growth, while reported and adjusted EPS declined, with full-year guidance maintained through cost containment | Metric | Q1 2025 | Change (YoY) | | :-------------------------------- | :------ | :----------- | | Orders | $872M | +6% (reported), +1% (organic) | | Sales | $814M | +2% (reported), -1% (organic) | | Reported Diluted EPS | $1.26 | -21% | | Adjusted Diluted EPS | $1.75 | -7% | - Record orders of $872 million were achieved, with records specifically in HST and FSDP segments[5] - Orders expanded 6% (reported) and 1% organically, marking the fourth consecutive quarter of positive organic performance[5] - Full year organic sales growth and diluted EPS guidance ranges are being maintained, supported by an additional $20 million of cost containment actions[5] Financial Guidance IDEX provides its financial outlook for the full year and second quarter of 2025, including sales growth and EPS projections Full Year 2025 Guidance For the full year 2025, IDEX expects GAAP diluted EPS between $6.56 and $6.95, adjusted diluted EPS at $8.10 to $8.45, and organic sales growth of 1% to 3% | Metric | Low End | High End | | :-------------------- | :------ | :------- | | GAAP Diluted EPS | $6.56 | $6.95 | | Adjusted Diluted EPS | $8.10 | $8.45 | | Organic Sales Growth | 1% | 3% | Second Quarter 2025 Guidance For Q2 2025, IDEX forecasts GAAP diluted EPS between $1.60 and $1.72, adjusted diluted EPS between $1.95 and $2.05, and organic sales growth of 0% to 2%, incorporating tariffs and cost actions | Metric | Low End | High End | | :-------------------- | :------ | :------- | | GAAP Diluted EPS | $1.60 | $1.72 | | Adjusted Diluted EPS | $1.95 | $2.05 | | Organic Sales Growth | 0% | 2% | - Second quarter and full year guidance reflects the estimated impact of tariffs and associated incremental price realization and an additional tranche of cost actions to mitigate potential later-stage demand pressures[6] Consolidated Financial Performance This section details IDEX's overall financial results, including income statement and cash flow performance Income Statement Overview Q1 2025 saw net sales increase due to acquisition, gross margin improve, but net income and diluted EPS declined due to higher expenses and tax rates | Metric (Q1 2025) | Value ($M) | Q1 2024 Value ($M) | Change (%) | Change (bps) | | :-------------------------------- | :--------- | :----------------- | :--------- | :----------- | | Orders | 871.9 | 820.3 | +6% | | | Net Sales | 814.3 | 800.5 | +2% | | | Organic Sales Change | | | -1% | | | Gross Profit | 368.9 | 357.4 | +3.2% | | | Gross Margin | 45.3% | 44.6% | | +70 bps | | Net Income Attributable to IDEX | 95.5 | 121.4 | -21.3% | | | Net Income Margin | 11.7% | 15.2% | | -350 bps | | Diluted EPS Attributable to IDEX | 1.26 | 1.60 | -21.3% | | | Adjusted Diluted EPS Attributable to IDEX | 1.75 | 1.88 | -7% | | - Net sales increased largely due to the Mott Corporation acquisition, while organic sales decreased due to lower volumes in certain Fluid & Metering Technologies and Health & Science Technologies businesses, partially offset by growth initiatives and price capture[7] - Gross margin and adjusted gross margin increased primarily due to favorable operational productivity and price/cost, with platform optimization savings mitigating higher employee-related costs[7] - Diluted EPS and Adjusted diluted EPS both decreased, reflecting higher interest due to increased debt, higher depreciation expense, and a higher effective tax rate (prior year included discrete one-time benefits)[7][8] Cash Flow Overview Cash flows from operating activities decreased by $50.9 million to $105.7 million in Q1 2025, and free cash flow decreased by $45.2 million to $91.4 million, primarily due to increased inventory and interest payments | Metric (Q1 2025) | Value ($M) | Q1 2024 Value ($M) | Change ($M) | | :-------------------------------- | :--------- | :----------------- | :---------- | | Cash Flows from Operating Activities | 105.7 | 156.6 | (50.9) | | Free Cash Flow | 91.4 | 136.6 | (45.2) | | Operating Cash Flow as % of Net Income | 111% | 129% | NM | | Free Cash Flow Conversion | 69% | 95% | NM | - Both cash flows from operating activities and free cash flow decreased, reflecting larger increases in inventory to support planned production and interest payments on senior notes for the Mott acquisition[8] - Free cash flow also reflects lower capital expenditures during the current year period[8] Segment Financial Results This section provides a detailed breakdown of financial performance across IDEX's key operating segments Fluid & Metering Technologies (FMT) The FMT segment experienced a 7% decrease in net sales and a 4% organic sales decrease in Q1 2025 due to market softness, with Adjusted EBITDA margin decreasing by 80 basis points to 32.8% due to volume deleverage | Metric | Q1 2025 ($M) | Q1 2024 ($M) | Change (%) | Change (bps) | | :-------------------- | :----------- | :----------- | :--------- | :----------- | | Net Sales | 290.5 | 313.7 | -7% | | | Organic Sales Change | | | -4% | | | Adjusted EBITDA | 95.3 | 105.4 | -9.6% | | | Adjusted EBITDA Margin | 32.8% | 33.6% | | -80 bps | - Organic sales decreased 4% driven by lower volumes resulting from softness in agriculture, chemical, energy, and semiconductor businesses, partially offset by favorable municipal water market dynamics and price capture[14] - Adjusted EBITDA margin decreased primarily due to volume deleverage, partially offset by strong price/cost and platform optimization savings[14] Health & Science Technologies (HST) The HST segment saw a 10% increase in net sales in Q1 2025 driven by the Mott acquisition, but organic sales decreased 1% due to lower volumes; Adjusted EBITDA margin decreased 60 basis points to 25.6% due to acquisition impact and volume deleverage | Metric | Q1 2025 ($M) | Q1 2024 ($M) | Change (%) | Change (bps) | | :-------------------- | :----------- | :----------- | :--------- | :----------- | | Net Sales | 341.5 | 310.1 | +10% | | | Organic Sales Change | | | -1% | | | Adjusted EBITDA | 87.4 | 81.4 | +7.4% | | | Adjusted EBITDA Margin | 25.6% | 26.2% | | -60 bps | - Net sales increased 10% driven by the acquisition of Mott; Organic sales decreased 1% due to lower volumes within semiconductor, automotive, and industrial businesses, partially offset by favorable aerospace/defense markets, targeted growth initiatives, and price capture[13] - Adjusted EBITDA margin decreased primarily due to the dilutive impact of the Mott acquisition and volume deleverage, partially offset by favorable productivity and mix, and platform optimization savings[15] Fire & Safety/Diversified Products (FSDP) The FSDP segment reported a 4% increase in net sales and a 5% organic sales increase in Q1 2025, driven by growth initiatives and price capture, with Adjusted EBITDA margin increasing 50 basis points to 29.4% due to favorable volume leverage | Metric | Q1 2025 ($M) | Q1 2024 ($M) | Change (%) | Change (bps) | | :-------------------- | :----------- | :----------- | :--------- | :----------- | | Net Sales | 184.3 | 178.0 | +4% | | | Organic Sales Change | | | +5% | | | Adjusted EBITDA | 54.2 | 51.4 | +5.4% | | | Adjusted EBITDA Margin | 29.4% | 28.9% | | +50 bps | - Net sales increased 4% and organic sales increased 5% as a result of Fire and Safety targeted growth initiatives, Dispensing projects volumes, and price capture[19] - Adjusted EBITDA margin increased due to favorable volume leverage and price/cost, partially offset by higher employee-related costs[19] - In January 2025, $30.2 million was repaid under the revolving credit facility, and in February 2025, 256,159 shares were repurchased at a cost of $50.0 million[19] Corporate Costs Corporate costs included in consolidated Adjusted EBITDA for Q1 2025 decreased by $1.0 million to $28.9 million, primarily due to lower employee-related costs - Corporate costs included in consolidated Adjusted EBITDA were $28.9 million during Q1 2025, $1.0 million lower compared with the same prior year period[16] - The decrease in corporate costs was primarily driven by lower employee-related costs, partially offset by increased professional services spending[16] Other Corporate Information This section covers details regarding IDEX's earnings call and important forward-looking statements and risk factors Conference Call Details IDEX hosted its Q1 earnings conference call on May 1, 2025, with CEO Eric Ashleman and CFO Abhi Khandelwal discussing financial performance and answering questions - IDEX broadcast its first quarter earnings conference call over the Internet on Thursday, May 1, 2025, at 8:00 a.m. CT[17] - CEO Eric Ashleman and CFO Abhi Khandelwal discussed the Company's recent financial performance and responded to questions[17] Forward-Looking Statements & Risks This section outlines forward-looking statements and inherent risks that could materially affect IDEX's future results, including economic, competitive, and operational factors - The news release contains forward-looking statements related to Q2 and full year 2025 outlook, including expected organic sales, EPS, acquisition behavior, resource deployment, and cost containment efforts[18] - Statements are subject to inherent uncertainties and risks that could cause actual results to differ materially, including economic conditions, pricing pressures, competitive factors, global events, acquisition integration, cybersecurity incidents, currency fluctuations, political conditions, trade policy, interest rates, supply chain, ESG issues, and litigation[18][20] - Investors are cautioned not to rely unduly on forward-looking statements, and management undertakes no obligation to publicly update them except as required by law[21] About IDEX Corporation IDEX Corporation designs and builds engineered products and mission-critical components across diverse sectors globally, with approximately 9,000 employees and $3.3 billion in annual sales - IDEX Corporation designs and builds engineered products and mission-critical components for diverse applications, including microchip crafting, water treatment, global broadband satellite communications, fluid handling, healthcare diagnostics, and fire and rescue tools[22] - Founded in 1988 with three small manufacturing companies, IDEX now comprises more than 50 diverse businesses globally, with approximately 9,000 employees and manufacturing operations in over 20 countries[22] - The company is a diversified, high-performing, global entity with approximately $3.3 billion in annual sales[22] Condensed Consolidated Financial Statements This section presents IDEX's condensed consolidated financial statements, including income statements, balance sheets, and cash flow statements Statements of Income Q1 2025 statements show net sales of $814.3 million, gross profit of $368.9 million, and net income of $95.5 million, with diluted EPS of $1.26, reflecting increased sales but decreased profitability | (in millions, except per share amounts) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | $814.3 | $800.5 | | Cost of sales | 445.4 | 443.1 | | Gross profit | 368.9 | 357.4 | | Selling, general and administrative expenses | 209.4 | 195.1 | | Restructuring expenses and asset impairments | 17.5 | 1.1 | | Operating income | 142.0 | 161.2 | | Other expense (income) – net | 1.4 | (2.7) | | Interest expense – net | 16.1 | 9.4 | | Income before income taxes | 124.5 | 154.5 | | Provision for income taxes | 29.1 | 33.2 | | Net income | 95.4 | 121.3 | | Net loss attributable to noncontrolling interest | 0.1 | 0.1 | | Net income attributable to IDEX | $95.5 | $121.4 | | Diluted earnings per common share attributable to IDEX | $1.26 | $1.60 | Balance Sheets As of March 31, 2025, total assets were $6,795.1 million, total liabilities $2,889.2 million, and total shareholders' equity $3,906.6 million, reflecting an increase in assets and equity, and a decrease in liabilities | (in millions) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Assets | | | | Cash and cash equivalents | $594.1 | $620.8 | | Receivables – net | 482.6 | 465.9 | | Inventories – net | 466.3 | 429.7 | | Total current assets | 1,626.7 | 1,592.7 | | Goodwill | 3,286.7 | 3,251.7 | | Intangible assets - net | 1,268.3 | 1,284.8 | | Total assets | $6,795.1 | $6,745.3 | | Liabilities and equity | | | | Trade accounts payable | $208.3 | $197.8 | | Accrued expenses | 274.6 | 278.7 | | Current portion of long-term borrowings | 100.7 | 100.7 | | Total current liabilities | 583.6 | 629.7 | | Long-term borrowings – net | 1,839.1 | 1,859.5 | | Total liabilities | 2,889.2 | 2,951.2 | | Total shareholders' equity | 3,906.6 | 3,794.7 | | Total liabilities and equity | $6,795.1 | $6,745.3 | Statements of Cash Flows In Q1 2025, net cash from operating activities was $105.7 million, net cash used in investing activities was $10.0 million, and net cash used in financing activities was $133.3 million, leading to a net decrease in cash | (in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash flows provided by operating activities | $105.7 | $156.6 | | Net cash flows used in investing activities | (10.0) | (20.0) | | Net cash flows used in financing activities | (133.3) | (41.0) | | Net (decrease) increase in cash and cash equivalents and restricted cash | (26.7) | 82.0 | | Cash and cash equivalents and restricted cash at end of period | $612.2 | $616.3 | - Operating cash flows decreased due to adjustments including higher depreciation, amortization, and share-based compensation, alongside changes in working capital such as increased inventories[30] - Financing activities included significant payments under revolving credit facilities ($30.2 million), cash dividends paid ($52.4 million), and repurchases of common stock ($50.0 million)[30] Company and Segment Financial Details This section provides detailed financial breakdowns for IDEX and its segments, including sales, depreciation, amortization, and restructuring expenses Net Sales by Segment In Q1 2025, HST led with $341.5 million in net sales, FMT reported $290.5 million, and FSDP $184.3 million, contributing to total IDEX net sales of $814.3 million | Segment | Q1 2025 Net Sales ($M) | Q1 2024 Net Sales ($M) | | :-------------------------------- | :--------------------- | :--------------------- | | Fluid & Metering Technologies | $290.5 | $313.7 | | Health & Science Technologies | $341.5 | $310.1 | | Fire & Safety/Diversified Products | $184.3 | $178.0 | | Total IDEX | $814.3 | $800.5 | Depreciation by Segment Total depreciation for IDEX in Q1 2025 was $18.4 million, with HST accounting for the largest portion at $11.7 million, reflecting an increase from the prior year | Segment | Q1 2025 Depreciation ($M) | Q1 2024 Depreciation ($M) | | :-------------------------------- | :------------------------ | :------------------------ | | Fluid & Metering Technologies | $4.4 | $4.3 | | Health & Science Technologies | $11.7 | $9.4 | | Fire & Safety/Diversified Products | $2.2 | $2.3 | | Corporate Office | $0.1 | $0.2 | | Total IDEX | $18.4 | $16.2 | Amortization of Intangible Assets by Segment Total amortization of intangible assets increased to $31.5 million in Q1 2025, with HST showing a significant rise to $24.6 million, likely due to recent acquisitions | Segment | Q1 2025 Amortization ($M) | Q1 2024 Amortization ($M) | | :-------------------------------- | :------------------------ | :------------------------ | | Fluid & Metering Technologies | $5.3 | $5.3 | | Health & Science Technologies | $24.6 | $17.7 | | Fire & Safety/Diversified Products | $1.6 | $1.6 | | Total IDEX | $31.5 | $24.6 | Restructuring Expenses and Asset Impairments by Segment Total restructuring expenses and asset impairments dramatically increased to $17.5 million in Q1 2025, with HST and FMT incurring the largest portions, indicating significant restructuring actions | Segment | Q1 2025 Restructuring Expenses ($M) | Q1 2024 Restructuring Expenses ($M) | | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Fluid & Metering Technologies | $4.2 | $0.5 | | Health & Science Technologies | $11.4 | $0.5 | | Fire & Safety/Diversified Products | $1.6 | — | | Corporate Office | $0.3 | $0.1 | | Total IDEX | $17.5 | $1.1 | Non-GAAP Financial Measures & Reconciliations This section defines IDEX's non-GAAP financial metrics and provides reconciliations to their most directly comparable GAAP measures Non-GAAP Definitions This section defines IDEX's non-GAAP financial metrics, such as organic sales, adjusted EPS, and free cash flow, which provide additional insight into ongoing operations - Non-GAAP measures provide greater insight and transparency by excluding items not reflective of ongoing operations[33] - Organic orders and sales exclude amounts from acquired/divested businesses and foreign currency translation[34] - Adjusted gross profit, net income, and diluted EPS are calculated by adding back fair value inventory step-up charges, restructuring expenses, and acquisition-related intangible asset amortization (all net of tax where applicable)[34] - Adjusted EBITDA is consolidated earnings before interest, taxes, depreciation, and amortization, plus fair value inventory step-up charges and restructuring expenses; Free cash flow is operating cash flow less capital expenditures[34] Reconciliation of Sales to Organic Sales For Q1 2025, IDEX's reported net sales change was 2%, which reconciles to a -1% organic sales change after adjusting for acquisitions/divestitures and foreign currency impacts | | FMT | HST | FSDP | IDEX | | :------------------------------ | :---- | :---- | :---- | :---- | | Change in net sales | (7 %) | 10 % | 4 % | 2 % | | Less: Net impact from acquisitions/divestitures | (2 %) | 12 % | — % | 4 % | | Less: Impact from foreign currency | (1 %) | (1 %) | (1 %) | (1 %) | | Change in organic sales | (4 %) | (1 %) | 5 % | (1 %) | Reconciliation of Gross Profit and Gross Margin In Q1 2025, reported gross profit and margin were $368.9 million and 45.3% respectively, with no fair value inventory step-up charges, resulting in identical adjusted figures | (dollars in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Gross profit | $368.9 | $357.4 | | Fair value inventory step-up charges | — | 2.5 | | Adjusted gross profit | $368.9 | $359.9 | | Net sales | $814.3 | $800.5 | | Gross margin | 45.3 % | 44.6 % | | Adjusted gross margin | 45.3 % | 45.0 % | Reconciliation of Net Income and Diluted EPS For Q1 2025, reported net income of $95.5 million and diluted EPS of $1.26 were reconciled to adjusted figures of $133.0 million and $1.75, respectively, after accounting for restructuring and amortization | (in millions, except per share amounts) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Reported net income attributable to IDEX | $95.5 | $121.4 | | Restructuring expenses and asset impairments | 17.5 | 1.1 | | Tax impact on restructuring expenses and asset impairments | (4.1) | (0.3) | | Acquisition-related intangible asset amortization | 31.5 | 24.6 | | Tax impact on acquisition-related intangible asset amortization | (7.4) | (5.6) | | Adjusted net income attributable to IDEX | $133.0 | $143.2 | | Reported diluted EPS attributable to IDEX | $1.26 | $1.60 | | Adjusted diluted EPS attributable to IDEX | $1.75 | $1.88 | Reconciliation of Net Income to Adjusted EBITDA IDEX's Q1 2025 reported net income of $95.4 million was reconciled to an Adjusted EBITDA of $208.0 million by adding back taxes, interest, depreciation, amortization, and restructuring expenses | (dollars in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Reported net income | $95.4 | $121.3 | | Provision for income taxes | 29.1 | 33.2 | | Interest expense - net | 16.1 | 9.4 | | Depreciation | 18.4 | 16.2 | | Amortization | 31.5 | 24.6 | | Restructuring expenses and asset impairments | 17.5 | 1.1 | | Adjusted EBITDA | $208.0 | $208.3 | | Adjusted EBITDA Components: | | | | FMT | $95.3 | $105.4 | | HST | $87.4 | $81.4 | | FSDP | $54.2 | $51.4 | | Corporate and other | $(28.9) | $(29.9) | | Total Adjusted EBITDA | $208.0 | $208.3 | | Adjusted EBITDA margin | 25.5 % | 26.0 % | Reconciliation of Cash Flows to Free Cash Flow For Q1 2025, cash flows from operating activities of $105.7 million resulted in free cash flow of $91.4 million after capital expenditures, representing a 69% conversion rate | (dollars in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cash flows from operating activities | $105.7 | $156.6 | | Less: Capital expenditures | 14.3 | 20.0 | | Free cash flow | $91.4 | $136.6 | | Free cash flow conversion | 69 % | 95 % | Guidance Reconciliations This section reconciles estimated 2025 guidance for net sales, diluted EPS, and net income to their respective organic, adjusted, and EBITDA non-GAAP measures Estimated 2025 Change in Net Sales to Change in Organic Sales: | | Second Quarter 2025 | Full Year 2025 | | :-------------------------------- | :-------------------- | :------------- | | Estimated change in net sales | 6 % - 8 % | 4 % - 6 % | | Less: Net impact from acquisitions/divestitures | 6 % - 6 % | 3 % - 3 % | | Less: Impact from foreign currency | — % - — % | — % - — % | | Estimated change in organic sales | — % - 2 % | 1 % - 3 % | Estimated 2025 Diluted EPS Attributable to IDEX to Adjusted Diluted EPS Attributable to IDEX: | | Second Quarter 2025 | Full Year 2025 | | :-------------------------------------- | :-------------------- | :------------- | | Estimated diluted EPS attributable to IDEX | $1.60 - $1.72 | $6.56 - $6.95 | | Estimated adjusted diluted EPS attributable to IDEX | $1.95 - $2.05 | $8.10 - $8.45 | Estimated 2025 Net Income to Adjusted EBITDA (Full Year): | | Low End ($M) | High End ($M) | | :-------------------------- | :----------- | :------------ | | Estimated Reported net income | $498.8 | $527.7 | | Estimated Adjusted EBITDA | $939.8 | $973.2 | | Estimated Adjusted EBITDA margin | 27.5% | 28.0% |