First Quarter 2022 Highlights

• Record reported EPS of $1.83, up 24% and record adjusted EPS of $1.96, up 21% vs. Q1 2021
• Record orders of $856 million, up 20% overall and 16% organically vs. Q1 2021
• Record sales of $751 million, up 15% overall and 12% organically vs. Q1 2021
• Record reported operating margin of 25.0%, up 110 basis points vs. Q1 2021
• Completed acquisition of Nexsight, LLC on February 28, 2022
• Announced upcoming acquisition of KZValve

IDEX Corporation (NYSE: IEX) today announced its financial results for the three month period ended March 31, 2022.

“The first quarter was an outstanding start to the year for IDEX," said Eric D. Ashleman, IDEX Corporation Chief Executive Officer and President. “We experienced robust demand and delivered strong operating performance, which drove record sales, double-digit organic growth and excellent margins. We also achieved record earnings per share performance, which was above the high end of our guided range."

“Our teams adeptly navigated the challenging economic environment and continued to deliver for our customers," Ashleman said. "Our highly differentiated product portfolio enabled strong price capture amid inflation pressures, and our focus on operational productivity yielded positive results."

"Capital deployment continues to be a key priority. We recently announced our intent to acquire KZValve, which will extend our precision agriculture product offerings, and we closed on Nexsight, a complement to our water businesses. Additionally, we repurchased 148 thousand shares in the first quarter and continued to invest capital to support organic growth. With our strong balance sheet, we are well positioned to capitalize on opportunities to drive long term value."

2022 Outlook

Full year 2022 organic sales growth is projected to be 6 to 8 percent, with an 8 to 9 percent organic sales increase in the second quarter of 2022 versus the prior year period. The Company expects full year 2022 reported EPS attributable to IDEX of $6.87 to $7.00 (adjusted EPS attributable to IDEX of $7.50 to $7.63) and second quarter 2022 reported EPS attributable to IDEX of $1.69 to $1.74 (adjusted EPS attributable to IDEX of $1.85 to $1.90).

Consolidated Results

Net Sales

First quarter 2022 sales of $751.1 million reflected a 15 percent increase compared with the prior year period (+12 percent organic, +5 percent acquisitions and -2 percent foreign currency translation).

Gross Margin

First quarter 2022 gross margin of 45.6 percent increased 70 basis points compared with the prior year period primarily due to higher volume leverage and strong operational productivity together with favorable price/cost, partially offset by higher employee-related costs. Additionally, the prior year period was unfavorably impacted by the fair value inventory step-up charge related to the ABEL Pumps, L.P. ("ABEL") acquisition. Adjusted gross margin, which excludes the fair value inventory step-up charge, increased 60 basis points.

Operating Margin

First quarter 2022 operating margin of 25.0 percent increased 110 basis points compared with the prior year period due to the drivers discussed above, partially offset by higher discretionary spending and resource investments. Additionally, the prior year period was unfavorably impacted by restructuring costs and the fair value inventory step-up charge related to the ABEL acquisition. Adjusted operating margin, which excludes restructuring costs and the fair value inventory step-up charge, increased 70 basis points.

Net Income Attributable to IDEX

First quarter 2022 net income attributable to IDEX increased $27.3 million to $140.0 million, which resulted in EPS attributable to IDEX of $1.83 per share. The first quarter 2022 effective tax rate of 22.4 percent decreased slightly compared to the prior year period effective tax rate of 22.6 percent due to the mix of global pre-tax income across jurisdictions. Adjusted EPS attributable to IDEX, which reflects the impact of non-GAAP adjustments, net of related taxes, was $1.96 per share, an increase of 34 cents per share, or 21.0 percent, from the prior year period.

Cash Flow

First quarter 2022 cash from operations of $79.7 million was down 27.1 percent compared with the prior year period primarily due to increases in working capital, partially offset by higher earnings. Accounts receivable increased as a result of higher volume and inventories increased to support production amid supply chain difficulties. First quarter 2022 free cash flow of $63.6 million was 42.5 percent of adjusted net income attributable to IDEX and reflected slightly higher capital expenditures as compared to the prior year period. Free cash flow as a percent of adjusted net income attributable to IDEX now reflects the impact of excluding acquisition-related intangible asset amortization, net of related taxes, from adjusted net income attributable to IDEX.

Segment Highlights

Fluid & Metering Technologies

• First quarter 2022 sales of $272.0 million reflected a 12 percent increase compared with the first quarter of 2021 (+11 percent organic, +2 percent acquisitions and -1 percent foreign currency translation).
• First quarter 2022 operating margin was 29.5 percent, up 370 basis points compared with the prior year period primarily due to higher volume leverage and strong operational productivity together with favorable price/cost, partially offset by increases in employee-related costs and resource investments. Additionally, the prior year period margin was unfavorably impacted by increases in inventory reserves associated with COVID-19 new product development opportunities not materializing, restructuring costs and the fair value inventory step-up charge related to the ABEL acquisition. Adjusted operating margin, which excludes restructuring costs and the fair value inventory step-up charge, increased 300 basis points.

Health & Science Technologies

• First quarter 2022 sales of $315.2 million reflected a 26 percent increase compared with the first quarter of 2021 (+16 percent organic, +11 percent acquisitions/divestitures and -1 percent foreign currency translation).
• First quarter 2022 operating margin was 26.5 percent, down 10 basis points compared with the prior year period as higher volume leverage and favorable price/cost were more than offset by the dilutive impact of amortization related to the acquisition of Airtech Group, Inc., US Valve Corporation and related entities ("Airtech") as well as higher employee-related costs, discretionary spending and resource investments. Additionally, the prior year period margin was unfavorably impacted by restructuring costs. Adjusted operating margin, which excludes restructuring costs, decreased 40 basis points.

Fire & Safety/Diversified Products

• First quarter 2022 sales of $164.7 million reflected a 3 percent increase compared with the first quarter of 2021 (+5 percent organic and -2 percent foreign currency translation).
• First quarter 2022 operating margin was 24.6 percent, down 330 basis points compared with the prior year period primarily due to higher employee-related costs and discretionary spending as well as compressed price/cost due to long-term original equipment manufacturer contracts, partially offset by higher volume. Additionally, the prior year period margin was unfavorably impacted by restructuring costs. Adjusted operating margin, which excludes restructuring costs, decreased 340 basis points.

Corporate Costs

Corporate costs included in operating income were $16.9 million in the first quarter of 2022, a decrease of $1.7 million over the prior year period, primarily due to lower acquisition costs, employee award forfeitures and period-over-period mark to market adjustments driven by changes in the Company's share price.

Acquisitions

On February 28, 2022, the Company acquired Nexsight, LLC and its businesses Envirosight, WinCan, MyTana and Pipeline Renewal Technologies (“Nexsight”). Nexsight complements and creates synergies with the Company’s existing iPEK and ADS business units that design and create sewer crawlers, inspection and monitoring systems and software applications that allow teams to identify, anticipate and correct wastewater system issues remotely. Headquartered in Randolph, New Jersey, Nexsight operates in the Company’s Water reporting unit within the Fluid & Metering Technologies ("FMT") segment. Nexsight was acquired for cash consideration of $114.7 million. The entire purchase price was funded with cash on hand.

On March 30, 2022, the Company entered into a definitive agreement to acquire KZ CO. ("KZValve") for cash consideration of $120.0 million, subject to customary post-closing adjustments. KZValve, based in Greenwood, Nebraska, is a leading manufacturer of electric valves and controllers used primarily in agricultural applications. KZValve will augment and expand IDEX's agricultural portfolio, complementing Banjo's current fluid management solutions for these applications. With annual sales of approximately $28.0 million, KZValve will be part of the Company’s Agriculture reporting unit within the FMT segment. The Company expects to close the transaction by the end of the second quarter of 2022, subject to regulatory approval and customary closing conditions.

Conference Call to be Broadcast over the Internet

IDEX will broadcast its first quarter earnings conference call over the Internet on Wednesday, April 27, 2022 at 9:30 a.m. CT. Chief Executive Officer and President Eric Ashleman and Senior Vice President and Chief Financial Officer William Grogan 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 will also be able to hear a replay of the call by dialing 877.660.6853 (or 201.612.7415 for international participants) using the ID #13724803.

Forward-Looking Statements

This news release 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 expected organic sales growth and expected earnings per share, and the assumptions underlying these expectations, plant and equipment capacity for future growth and the anticipated timing and effects of planned facility expansion, the duration of supply chain challenges, anticipated future acquisition behavior and capital deployment, availability of cash and financing alternatives, the anticipated timing of the closing of the Company's acquisition of KZValve and the anticipated benefits of the Company’s acquisitions of Airtech, Nexsight and KZValve, 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 news release. The risks and uncertainties include, but are not limited to, the following: the impact of health epidemics and pandemics, including the COVID-19 pandemic, and the impact of related governmental actions, on the Company’s ability to operate its business and facilities, on its customers, on supply chains and on the U.S. and global economy generally; economic and political consequences resulting from terrorist attacks and wars, including Russia's invasion of Ukraine and the global response to this invasion, which, along with the ongoing effects of the COVID-19 pandemic, could have an adverse impact on the Company's business by creating disruptions in the global supply chain and by potentially having an adverse impact on the global economy; 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 the Company’s results; the Company’s 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; developments with respect to trade policy and tariffs; interest rates; capacity utilization and the effect this has on costs; labor markets; supply chain backlogs, including risks affecting component availability, labor inefficiencies and freight logistical challenges; market conditions and material costs; 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 news release, 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.

About IDEX

IDEX (NYSE: IEX) makes thousands of products and mission-critical components that improve everyday life all around you. If you enjoy chocolate, it quite possibly passed through a Viking® internal gear pump at the candy factory. If you were ever in a car accident, emergency workers may have used the Hurst Jaws of Life® rescue tool to save your life. If your doctor ordered a DNA test to predict your risk of disease or determine a course of treatment, the lab may have used equipment containing components made by IDEX Health & Science. Founded in 1988 with three small, entrepreneurial manufacturing companies, we’re proud to say that we now call over 45 diverse businesses around the world part of the IDEX family. With more than 7,500 employees and manufacturing operations in more than 20 countries, IDEX is a high-performing, global company with nearly $2.8 billion in annual sales, committed to making trusted solutions that improve lives. IDEX shares are traded on the New York Stock Exchange under the symbol “IEX”.

For further information on IDEX Corporation and its business units, visit the company’s website at www.idexcorp.com.

(Financial reports follow)

Non-GAAP Measures of Financial Performance

The Company prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). The Company supplements certain GAAP financial performance metrics with non-GAAP financial performance metrics. Management believes these non-GAAP financial performance metrics provide investors with greater insight, transparency and a more comprehensive understanding of the financial information used by management in its financial and operational decision-making because certain of these adjusted metrics exclude items not reflective of ongoing operations, such as fair value inventory step-up charges, restructuring expenses and asset impairments, gains on sales of assets and acquisition-related intangible asset amortization. Reconciliations of non-GAAP financial performance metrics to their most comparable GAAP financial performance metrics are defined and presented below and should not be considered a substitute for, nor superior to, the financial data prepared in accordance with GAAP. Due to rounding, numbers presented throughout this and other documents may not add up or recalculate precisely. There were no adjustments to GAAP financial performance metrics other than the items noted below.

• Organic orders and sales are calculated excluding amounts from acquired or divested businesses during the first twelve months of ownership or prior to divestiture and the impact of foreign currency translation.
• Adjusted gross profit is calculated as gross profit plus fair value inventory step-up charges.
• Adjusted gross margin is calculated as adjusted gross profit divided by net sales.
• Adjusted operating income is calculated as operating income plus fair value inventory step-up charges plus restructuring expenses and asset impairments.
• Adjusted operating margin is calculated as adjusted operating income divided by net sales.
• Adjusted net income attributable to IDEX is calculated as net income attributable to IDEX plus fair value inventory step-up charges plus restructuring expenses and asset impairments less gains on sales of assets plus acquisition-related intangible asset amortization, all net of the statutory tax expense or benefit.
• Adjusted EPS attributable to IDEX is calculated as adjusted net income attributable to IDEX divided by the diluted weighted average shares outstanding.
• EBITDA is calculated as net income plus interest expense plus provision for income taxes plus depreciation and amortization. The Company reconciles EBITDA to net income on a consolidated basis as IDEX does not allocate consolidated interest expense or consolidated provision for income taxes to its segments.
• EBITDA interest coverage is calculated as EBITDA divided by consolidated interest expense.
• Adjusted EBITDA is calculated as EBITDA plus fair value inventory step-up charges plus restructuring expenses and asset impairments less gains on sales of assets.
• Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net sales.
• Adjusted EBITDA interest coverage is calculated as Adjusted EBITDA divided by consolidated interest expense.
• Free cash flow is calculated as cash flow from operating activities less capital expenditures.

Table 1: Reconciliations of the Change in Net Sales to Organic Net Sales

Table 2: Reconciliations of Reported-to-Adjusted Gross Profit and Margin (dollars in millions)

Table 3: Reconciliations of Reported-to-Adjusted Operating Income and Margin (dollars in millions)

Table 4: Reconciliations of Reported-to-Adjusted Net Income and EPS (in millions, except per share amounts)

Table 5: Reconciliations of EBITDA to Net Income (dollars in millions)