IDEX Corporation Reports Third Quarter 2008 Results; 8% Orders Growth, 9% Sales Growth and Record Free Cash Flow
biz.yahoo.com
Monday October 20, 8:31 am ET
NORTHBROOK, Ill.--(BUSINESS WIRE)--IDEX Corporation (NYSE:IEX) today announces third quarter 2008 results.
New orders in the quarter totaled $353 million, 8 percent higher than the prior-year period. Sales in the quarter totaled $365 million, 9 percent higher than the prior-year period.
Third quarter operating income of $61 million was 4 percent lower than the prior-year period. Operating margin of 16.7 percent reflected a 220 basis point decline versus the prior-year period, due primarily to the impact of the previously announced restructuring-related charges as well as the impact from acquisitions. Excluding the impact of the restructuring-related charges and acquisitions, operating margin was 18.6 percent, a 30 basis point decline versus the prior-year period.
Income from continuing operations of $40 million increased 4 percent over the third quarter of the previous year. Diluted earnings per share from continuing operations of 49 cents improved 2 cents, or 4 percent, from the third quarter of the previous year. Excluding the impact of the restructuring-related costs, diluted earnings per share from continuing operations was 53 cents, an improvement of 6 cents, or 13 percent, from the third quarter of the previous year.
The results reported herein are preliminary and do not include a non-cash charge for impairment of goodwill for the Fluid Management Americas business unit.
Third Quarter 2008 Results and Recent Events (from Continuing Operations)
* Orders increased 8 percent compared to the prior-year period (6 percent acquisitions, flat organic and 2 percent foreign currency translation)
* Sales increased 9 percent compared to the prior-year period (7 percent acquisitions, 1 percent organic and 1 percent foreign currency translation)
* Income increased 4 percent to $40 million
* Diluted EPS of 49 cents was 2 cents, or 4 percent, ahead of the prior-year period (excluding restructuring costs, diluted EPS of 53 cents was 6 cents, or 13 percent, ahead of the prior year period)
* EBITDA of $74 million was 20.4 percent of sales and covered interest expense by more than 19 times
* Third quarter free cash flow of $68 million represented 167 percent of net income
* Closed 3 acquisitions (Richter Chemie-Technik, iPEK and IETG)
"We are positioning our Company to perform well in a very challenging environment. We are taking steps to address the downside risks in associated markets while still investing for growth in end markets that should outperform the economy. Our restructuring efforts will result in cost reductions of $15 to $17 million which is higher than previously announced. In addition to the restructuring, the impact from the recent acquisitions supports our ability to grow earnings despite uncertain market conditions.
Given our current outlook, we expect full year 2008 total revenue growth in the range of 10 to 11 percent and pre-restructuring EPS to range from $2.00 to $2.04 compared to $1.90 in the prior year. In addition, 2008 free cash flow is strong and will significantly exceed net income. For the fourth quarter of 2008, we project total revenue growth in the range of 8 to 10 percent and pre-restructuring EPS in the range of 41 to 45 cents per diluted share.
We are also pleased with our recent acquisitions of Richter, iPEK, and IETG. Richter is a leader in the growing market for corrosion resistant, specialty pumps and valves and enables us to extend our service capability in the process industry within the Fluid and Metering Technologies segment. Both iPEK and IETG are industry experts in flow monitoring products, systems and services supporting the growing water and wastewater markets in Europe and the UK, respectively. By leveraging iPEK and IETG with our ADS Environmental Services business, we will expand our capabilities to serve this critical market segment.”
Lawrence D. Kingsley
Chairman and Chief Executive Officer
Business Highlights
Fluid & Metering Technologies
* Sales in the third quarter of $170.3 million reflected 18 percent growth (13 percent acquisitions, 4 percent organic and 1 percent foreign currency translation). Growth was driven by continued global demand for infrastructure-related applications and acquisition performance.
* Operating margin of 20.1 percent represented a 180 basis point decline compared with the third quarter of 2007, primarily due to the impact of recent acquisitions. Excluding the impact of recent acquisitions, operating margin was 21.5%, a 40 basis point decline compared with the prior-year period.
Health & Science Technologies
* Sales in the third quarter of $82.9 million were flat compared to the third quarter of 2007 (3 percent acquisitions, -4 percent organic and 1 percent foreign currency translation). The organic decline was primarily due to the previously announced exit from two specific OEM contracts.
* Operating margin of 20.7 percent reflected a 60 basis point improvement compared with the third quarter of 2007.
Dispensing Equipment
* Sales of $31.5 million in the third quarter reflected a 17 percent decline compared with the third quarter of 2007 (-21 percent organic and 4 percent foreign currency translation), due to the deterioration of capital spending in both the North American and European markets.
* Operating margin of 7.1 percent represented a 760 basis point decline compared with the third quarter of 2007, primarily due to lower volume within related end markets.
Fire & Safety/Diversified Products
* Sales in the third quarter of $81.2 million reflected 15 percent growth compared with the prior year (13 percent organic and 2 percent foreign currency translation). The engineered band clamping business as well as the rescue tools business achieved significant growth driven by strong global demand for infrastructure-related applications and rescue equipment serving emerging markets.
* Operating margin of 25.3 percent represented a 190 basis point improvement compared with the third quarter of 2007.
For the third quarter of 2008, Fluid & Metering Technologies contributed 46 percent of both sales and operating income; Health & Science Technologies accounted for 23 percent of both sales and operating income; Dispensing Equipment accounted for 9 percent of sales and 3 percent of operating income; and Fire & Safety/Diversified Products represented 22 percent of sales and 28 percent of operating income.
Acquisitions
During the month of October, the company completed 3 acquisitions which will result in approximately $110 million of revenue in 2009. Cash consideration for the 3 acquisitions was approximately $175 million. Richter Chemie-Technik, a leading provider of premium quality corrosion resistant pumps, valves and control equipment serving the severe duty chemical and pharmaceutical process markets, enhances our presence in the global infrastructure markets, particularly in the areas of specialty chemical and pharmaceutical manufacturing. iPEK, a renowned supplier of remote controlled systems for infrastructure analysis in waste water collection systems and IETG a leading provider of wastewater services and underground utility detection and mapping services in the UK, both expand the company’s capabilities in serving the demand for inspection and maintenance of the aging water and wastewater infrastructure worldwide. These acquisitions are expected to be accretive to 2009 earnings. |
