**In Q4 2023, net income was low due to several factors. The company experienced **lower operating results**, incurred a **$9.1 million loss on the sale of Novotema**, recognized increased **amortization expenses on new acquisitions**, and faced a **higher effective tax rate of 22.7%** (compared to 20.5% in the previous year's Q4). Collectively, these factors led to a decline of **$21.4 million** in net income for the quarter.  **[0000832101-24-000004_iex-20240206xex991.htm:2]** **[0000832101-24-000004_iex-20240206xex991.htm:4]** **

Why was Net income so low in Q4 2023?

Basic EPS dropped sharply in Q4 2023 because **net income attributable to IDEX decreased by $21.4 million** (from **$130.0 million** in Q4 2022 to **$108.6 million** in Q4 2023) due to several factors. The decline was driven by **lower operating results** with diminished sales and margins, a **loss on the sale of Novotema, SpA**, and **higher amortization expenses** related to new acquisitions. In addition, the **net income margin fell from 16.0% to 13.7%**, impacted by lower volume leverage, increased employee-related costs, and the dilutive effect of acquisitions, while the **effective tax rate rose from 20.5% to 22.7%** owing to the absence of one-time tax benefits seen in the prior year.  **[0000832101-24-000004_iex-20240206xex991.htm:6]** **[0000832101-24-000004_iex-20240206xex991.htm:2]** **[0000832101-24-000004_iex-20240206xex991.htm:3]** **[0000832101-24-000004_iex-20240206xex991.htm:1]** 

Why did Basic EPS drop sharply in Q4 2023?

The steep decline in pre-tax income in Q4 2023 was driven by **lower net sales**—a 3% decrease compared to Q4 2022 due to a 6% organic decline offset only partially by acquisitions—as well as a **gross profit decline** of **$8.9 million** caused by lower sales volume and an unfavorable mix. Additionally, the company faced **higher costs**, evidenced by a **120 basis point decrease** in adjusted EBITDA margin due to reduced volume leverage and increased employee-related expenses. Finally, **acquisition-related costs** from the $202 million acquisition of STC Material Solutions further contributed to increased amortization and integration expenses, all of which collectively impacted the pre-tax income harshly.  **[0000832101-24-000004_iex-20240206xex991.htm:1]** **[0000832101-24-000004_iex-20240206xex991.htm:4]** 

What contributed to the steep decline in pre-tax income in Q4 2023?

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The jump in operating cash flow in FY 2023 was driven by **lower working capital requirements** and a deliberate **recalibration of inventory levels** in response to normalizing market conditions. In FY 2022, the company had experienced **higher working capital requirements** due to increased volumes and the need to build up inventories amid supply chain challenges, whereas in FY 2023, these pressures diminished, contributing to a significant rise in operating cash flow.  **[0000832101-24-000009_iex-20231231.htm:43]** 

What factors drove the jump in Operating Cash Flow in FY 2023?

The dip in operating cash flow in Q2 2024 was attributed to a mix of factors. Although there were lower cash payments—such as reduced spending on variable compensation and taxes—these positives were largely offset by **lower earnings** and **higher investments in working capital** (including increased inventory purchases and elevated receivables), which together weighed on the operating cash collection.  **[0000832101-24-000044_iex-20240630.htm:28]** 

Why did Operating Cash Flow dip so low in Q2 2024?

The documents do not provide a specific reason for the lower capital expenditures in Q3 2024. They simply note that for the nine months ended September 30, 2024, capital expenditures decreased by **$18.7 million** compared to the same period in 2023, and they suggest that the reduction could be related to changes in investment priorities, operational adjustments, or timing differences.  **[0000832101-24-000055_iex-20240930.htm:6]** **[0000832101-24-000053_iex-20240930xex991.htm:7]** 

What caused Capital Expenditures to be notably lower in Q3 2024?

d63edc15352ba8515420d8af5ab5ef915f66e6f7658b59bc83d91cb3207faffb

The jump in **Cash and Cash Equivalents** in Q2 2024 occurred primarily because IDEX Corporation experienced a net increase of **$166.4 million** during the first half of the year. This improvement was driven by several factors: firstly, **net cash flows from operating activities** increased to **$290.2 million**; secondly, **net cash flows from investing activities** turned positive at **$11.7 million**, largely due to proceeds from the sale of a business and lower capital expenditures; and although there was a higher outflow from **financing activities** and a negative impact from exchange rate changes, these were outweighed by the overall positive movements.  **[0000832101-24-000044_iex-20240630.htm:4]** **[0000832101-24-000042_iex-20240630xex991.htm:6]** 

Why did Cash and Cash Equivalents jump in Q2 2024?

The sharp increase in Total Assets in Q3 2024 was primarily driven by factors related to IDEX Corporation’s acquisition of Mott Corporation. Specifically, **Goodwill** increased from **$2,838.3 million** to **$3,316.0 million** and **Intangible Assets** rose from **$1,011.8 million** to **$1,349.4 million**, reflecting the impact of the acquisition. Additionally, increases in **Property, Plant, and Equipment** and **Current Assets** (including cash, receivables, and inventories) contributed to this significant rise in Total Assets.  **[0000832101-24-000055_iex-20240930.htm:4]** **[0000832101-24-000053_iex-20240930xex991.htm:0]** 

What caused the sharp increase in Total Assets in Q3 2024?

The surge in **Long-term Borrowings - net** in Q3 2024 was driven primarily by financing actions taken to fund the **$986.2 million** acquisition of Mott. Specifically, the company issued **$495.0 million** in 4.950% Senior Notes and increased the drawdown on its Revolving Facility by **$279.3 million**, raising the overall borrowings from **$1,325.1 million** in Q4 2023 to **$2,075.1 million** in Q3 2024.  **[0000832101-24-000055_iex-20240930.htm:17]** **[0000832101-24-000055_iex-20240930.htm:32]** 

What explains the surge in Long-term Borrowings in Q3 2024?

3b3b4f29fd31d9a7c39a2d8f1cb53fd0f687577b26529d75401c1fafb7f2e8f7

Net sales (USD, millions)

Cost of sales (USD, millions)

Gross profit (USD, millions)

Selling, general and administrative expenses (USD, millions)

Restructuring expenses and asset impairments (USD, millions)

Operating income (USD, millions)

Other expense (income) – net (USD, millions)

Interest expense – net (USD, millions)

Income before income taxes (USD, millions)

Provision for income taxes (USD, millions)

Net income (USD, millions)

Net loss attributable to noncontrolling interest (USD, millions)

Net income attributable to IDEX (USD, millions)

Basic earnings per common share attributable to IDEX (USD)

Diluted earnings per common share attributable to IDEX (USD)

bb34db61fe8b315e9925ac3c5b7b19815430156c2423c0e946541ce23c978da3

Depreciation (USD, millions)

Amortization of intangible assets (USD, millions)

Share-based compensation expense (USD, millions)

Other - net (Operating Activities) (USD, millions)

Net cash flows provided by operating activities (USD, millions)

Capital expenditures (USD, millions)

Acquisition of businesses, net of cash acquired (USD, millions)

Other - net (Investing Activities) (USD, millions)

Net cash flows used in investing activities (USD, millions)

Cash dividends paid to shareholders (USD, millions)

Proceeds from share issuances, net of shares withheld for taxes (USD, millions)

Repurchases of common stock (USD, millions)

Other - net (Financing Activities) (USD, millions)

Net cash flows provided by (used in) financing activities (USD, millions)

Effect of exchange rate changes on cash and cash equivalents (USD, millions)

Net increase (decrease) in cash and cash equivalents and restricted cash (USD, millions)

Deferred income taxes (USD, millions)

Cash and cash equivalents and restricted cash at end of period (USD, millions)

5a51ba62d774724e827602ca648d7681d626c60ea9f4369ef05a53d8b9eb0efd

Cash and cash equivalents (USD, millions)

Receivables - net (USD, millions)

Inventories - net (USD, millions)

Other current assets (USD, millions)

Total current assets (USD, millions)

Property, plant and equipment - net (USD, millions)

Goodwill (USD, millions)

Intangible assets - net (USD, millions)

Other noncurrent assets (USD, millions)

Total assets (USD, millions)

Trade accounts payable (USD, millions)

Accrued expenses (USD, millions)

Current portion of long-term borrowings (USD, millions)

Dividends payable (USD, millions)

Total current liabilities (USD, millions)

Long-term borrowings - net (USD, millions)

Other noncurrent liabilities (USD, millions)

Total liabilities (USD, millions)

Common stock, Issued (USD, millions)

Treasury stock at cost (USD, millions)

Additional paid-in capital (USD, millions)

Retained earnings (USD, millions)

Accumulated other comprehensive loss (USD, millions)

Total shareholders’ equity (USD, millions)

Noncontrolling interest (USD, millions)

Total equity (USD, millions)

Total liabilities and equity (USD, millions)

0842d442b76c1996426ef472b53d5e4211b1a938e1ce3917e1a9d6560786d462

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

b51075da896b5d29bade5e52820b36faf327b491c702a2a38b1d4a7c0036fccf

9f8af21fa443d372101ee92c3ffad16d71faf70d39d02eccf673eb4ce26cbc26

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

cdd90afa486bba2df5f70b790e314ad84f030141ca797c26eb505974f976f214

Change in organic net sales for FMT (percent)

Change in organic net sales for HST (percent)

Change in organic net sales for FSDP (percent)

Change in organic net sales for total (percent)

Free cash flow (USD millions)

f568c90c5a1a1220a86582fcf99e5f2756a9c5007e19b705504314b868501442

728d3456ddd9763bdfb94be7f084aecb82f9f86ed5f9a31bae6de2cc2f655e21

U.S.

North America

North America, excluding U.S.

Europe

Asia

Other

Other (South America, Middle East, Australia, and Africa)

Intersegment elimination

Total Revenue

6d7952640dbf933a70c3bf496077fed21cf686743e0019e2edd1db0db3cb738a

IDEX CORP /DE/ (IEX)

Financials