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, 2023

OR

☐	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 21, 2023: 75,601,661.

TABLE OF CONTENTS

Part I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	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	6
	Note 3. Collaborative Investments	10
	Note 4. Business Segments	10
	Note 5. Revenue	13
	Note 6. Earnings Per Common Share	15
	Note 7. Balance Sheet Components	17
	Note 8. Goodwill and Intangible Assets	17
	Note 9. Borrowings	19
	Note 10. Fair Value Measurements	20
	Note 11. Leases	21
	Note 12. Restructuring Expenses and Asset Impairments	22
	Note 13. Other Comprehensive Income (Loss)	24
	Note 14. Share Repurchases	24
	Note 15. Share-Based Compensation	25
	Note 16. Retirement Benefits	29
	Note 17. Legal Proceedings	30
	Note 18. Income Taxes	30
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
Part II. Other Information
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
Signatures		48

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

IDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except per share amounts)

(unaudited)

	June 30, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	457.0	$	430.2
Receivables, less allowance for credit losses of $7.0 and $8.0, respectively	455.2		442.8
Inventories	482.5		470.9
Other current assets	93.2		55.4
Total current assets	1,487.9		1,399.3
Property, plant and equipment, net of accumulated depreciation of $538.8 and $516.7, respectively	421.6		382.1
Goodwill	2,714.4		2,638.1
Intangible assets - net	957.3		947.8
Other noncurrent assets	138.7		144.6
Total assets	$	5,719.9	$	5,511.9
LIABILITIES AND EQUITY
Current liabilities
Trade accounts payable	$	189.7	$	208.9
Accrued expenses	247.9		289.1
Short-term borrowings	0.5		—
Dividends payable	48.5		45.6
Total current liabilities	486.6		543.6
Long-term borrowings	1,471.5		1,468.7
Deferred income taxes	286.1		264.2
Other noncurrent liabilities	196.8		195.8
Total liabilities	2,441.0		2,472.3
Commitments and contingencies
Shareholders’ equity
Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par value; Issued: None	—		—
Common stock:
Authorized: 150,000,000 shares, $.01 per share par value
Issued: 90,073,221 shares at June 30, 2023 and 90,064,988 shares at December 31, 2022	0.9		0.9
Additional paid-in capital	834.2		817.2
Retained earnings	3,713.4		3,531.7
Treasury stock at cost: 14,367,209 shares at June 30, 2023 and 14,451,032 shares at December 31, 2022	(1,182.0)		(1,184.3)
Accumulated other comprehensive loss	(87.8)		(126.2)
Total shareholders’ equity	3,278.7		3,039.3
Noncontrolling interest	0.2		0.3
Total equity	3,278.9		3,039.6
Total liabilities and equity	$	5,719.9	$	5,511.9

See Notes to Condensed Consolidated Financial Statements

1

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net sales	$	846.2	$	796.1	$	1,691.6	$	1,547.2
Cost of sales	468.2		439.2		931.1		847.8
Gross profit	378.0		356.9		760.5		699.4
Selling, general and administrative expenses	174.3		167.5		364.0		321.8
Restructuring expenses and asset impairments	3.6		2.8		4.1		3.4
Operating income	200.1		186.6		392.4		374.2
Other expense (income) - net	8.3		—		7.7		(2.3)
Interest expense	13.3		9.5		26.4		19.0
Income before income taxes	178.5		177.1		358.3		357.5
Provision for income taxes	40.0		39.0		80.0		79.5
Net income	138.5		138.1		278.3		278.0
Net loss attributable to noncontrolling interest	0.1		0.1		0.1		0.2
Net income attributable to IDEX	$	138.6	$	138.2	$	278.4	$	278.2
Earnings per common share:
Basic earnings per common share attributable to IDEX	$	1.83	$	1.82	$	3.68	$	3.66
Diluted earnings per common share attributable to IDEX	$	1.82	$	1.81	$	3.66	$	3.65
Share data:
Basic weighted average common shares outstanding	75.6		75.8		75.6		76.0
Diluted weighted average common shares outstanding	75.9		76.1		75.9		76.2

See Notes to Condensed Consolidated Financial Statements

2

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	138.5	$	138.1	$	278.3	$	278.0
Other comprehensive income (loss):
Pension and other postretirement adjustments, net of tax	(0.9)		0.6		(0.5)		1.2
Cumulative translation adjustment	2.3		(81.9)		38.9		(101.4)
Other comprehensive income (loss)	1.4		(81.3)		38.4		(100.2)
Comprehensive income	139.9		56.8		316.7		177.8
Comprehensive loss attributable to noncontrolling interest	0.1		0.1		0.1		0.2
Comprehensive income attributable to IDEX	$	140.0	$	56.9	$	316.8	$	178.0

See Notes to Condensed Consolidated Financial Statements

3

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in millions)

(unaudited)

					Accumulated Other Comprehensive Loss
	Common Stock and Additional Paid-In Capital		Retained Earnings		Cumulative Translation Adjustment		Retirement Benefits Adjustment		Treasury Stock		Total Shareholders’ Equity		Noncontrolling Interest		Total Equity
Balance, December 31, 2022	$	818.1	$	3,531.7	$	(137.1)	$	10.9	$	(1,184.3)	$	3,039.3	$	0.3	$	3,039.6
Net income	—		139.8		—		—		—		139.8		—		139.8
Cumulative translation adjustment	—		—		36.6		—		—		36.6		—		36.6
Net change in retirement obligations (net of tax of $0.2)	—		—		—		0.4		—		0.4		—		0.4
Issuance of 84,666 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1.8)	—		—		—		—		4.7		4.7		—		4.7
Shares surrendered for tax withholding	—		—		—		—		(4.4)		(4.4)		—		(4.4)
Share-based compensation	12.8		—		—		—		—		12.8		—		12.8
Balance, March 31, 2023	$	830.9	$	3,671.5	$	(100.5)	$	11.3	$	(1,184.0)	$	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)
Issuance of 26,763 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $0.3)	—		—		—		—		3.3		3.3		—		3.3
Repurchase of 5,400 shares of common stock	—		—		—		—		(1.1)		(1.1)		—		(1.1)
Shares surrendered for tax withholding	—		—		—		—		(0.2)		(0.2)		—		(0.2)
Share-based compensation	4.2		—		—		—		—		4.2		—		4.2
Cash dividends declared - $1.28 per common share outstanding	—		(96.7)		—		—		—		(96.7)		—		(96.7)
Balance, June 30, 2023	$	835.1	$	3,713.4	$	(98.2)	$	10.4	$	(1,182.0)	$	3,278.7	$	0.2	$	3,278.9

					Accumulated Other Comprehensive Loss
	Common Stock and Additional Paid-In Capital		Retained Earnings		Cumulative Translation Adjustment		Retirement Benefits Adjustment		Treasury Stock		Total Shareholders’ Equity		Noncontrolling Interest		Total Equity
Balance, December 31, 2021	$	796.5	$	3,126.5	$	(62.2)	$	(7.4)	$	(1,050.3)	$	2,803.1	$	—	$	2,803.1
Net income (loss)	—		140.0		—		—		—		140.0		(0.1)		139.9
Cumulative translation adjustment	—		—		(19.5)		—		—		(19.5)		—		(19.5)
Net change in retirement obligations (net of tax of $0.2)	—		—		—		0.6		—		0.6		—		0.6
Issuance of 73,755 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $1.7)	—		—		—		—		1.4		1.4		—		1.4
Repurchase of 147,500 shares of common stock	—		—		—		—		(28.3)		(28.3)		—		(28.3)
Shares surrendered for tax withholding	—		—		—		—		(4.9)		(4.9)		—		(4.9)
Share-based compensation	6.6		—		—		—		—		6.6		—		6.6
Balance, March 31, 2022	$	803.1	$	3,266.5	$	(81.7)	$	(6.8)	$	(1,082.1)	$	2,899.0	$	(0.1)	$	2,898.9
Net income (loss)	—		138.2		—		—		—		138.2		(0.1)		138.1
Cumulative translation adjustment	—		—		(81.9)		—		—		(81.9)		—		(81.9)
Net change in retirement obligations (net of tax of $0.5)	—		—		—		0.6		—		0.6		—		0.6
Issuance of 42,408 shares of common stock from issuance of unvested shares, performance share units and exercise of stock options (net of tax of $0.4)	—		—		—		—		3.8		3.8		—		3.8
Repurchase of 474,690 shares of common stock	—		—		—		—		(87.5)		(87.5)		—		(87.5)
Share-based compensation	6.9		—		—		—		—		6.9		—		6.9
Cash dividends declared - $1.20 per common share outstanding	—		(90.9)		—		—		—		(90.9)		—		(90.9)
Balance, June 30, 2022	$	810.0	$	3,313.8	$	(163.6)	$	(6.2)	$	(1,165.8)	$	2,788.2	$	(0.2)	$	2,788.0

See Notes to Condensed Consolidated Financial Statements

4

IDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities
Net income	$	278.3	$	278.0
Adjustments to reconcile net income to net cash provided by operating activities:
Gains on sales of assets	(0.2)		(2.6)
Asset impairments	0.5		0.2
Credit loss on note receivable from collaborative partner	7.7		—
Depreciation	27.2		24.7
Amortization of intangible assets	46.8		32.2
Amortization of debt issuance expenses	0.8		0.8
Share-based compensation expense	17.0		13.5
Deferred income taxes	—		(0.2)
Changes in (net of the effect from acquisitions and foreign exchange):
Receivables	(5.8)		(68.7)
Inventories	(2.0)		(84.5)
Other current assets	(18.6)		(17.8)
Trade accounts payable	(17.9)		36.2
Deferred revenue	4.2		1.3
Accrued expenses	(52.5)		(22.5)
Other - net	3.6		1.4
Net cash flows provided by operating activities	289.1		192.0
Cash flows from investing activities
Purchases of property, plant and equipment	(48.2)		(31.7)
Acquisition of businesses, net of cash acquired	(110.3)		(234.9)
Proceeds from disposal of fixed assets	1.3		6.6
Purchases of marketable securities	(19.1)		—
Other - net	(0.3)		(0.1)
Net cash flows used in investing activities	(176.6)		(260.1)
Cash flows from financing activities
Proceeds from issuance of 5.13% Senior Notes	100.0		—
Payment of 3.20% Senior Notes	(100.0)		—
Dividends paid	(93.9)		(86.9)
Proceeds from stock option exercises	8.0		5.2
Repurchases of common stock	(1.0)		(110.4)
Shares surrendered for tax withholding	(4.6)		(4.9)
Other - net	(0.5)		(0.1)
Net cash flows used in financing activities	(92.0)		(197.1)
Effect of exchange rate changes on cash and cash equivalents	6.3		(32.4)
Net increase (decrease) in cash and cash equivalents	26.8		(297.6)
Cash and cash equivalents at beginning of year	430.2		855.4
Cash and cash equivalents at end of period	$	457.0	$	557.8
Supplemental cash flow information
Cash paid for:
Interest	$	25.1	$	18.5
Income taxes	102.9		86.9

See Notes to Condensed Consolidated Financial Statements

5

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, 2023 are not necessarily indicative of the results to be expected for the entire year.

The Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations 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, 2022.

Recently Adopted Accounting Standards

In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which adds contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue recognition guidance. The Company adopted this standard on a prospective basis for the annual and interim periods beginning January 1, 2023. The adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

2.    Acquisitions

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 Company’s Condensed Consolidated Financial Statements from their respective dates of acquisition. The results of operations of Nexsight, LLC and its businesses Envirosight, WinCan, MyTana and Pipeline Renewal Technologies (“Nexsight”) (acquired February 28, 2022), KZ CO. (“KZValve”) (acquired May 2, 2022), Muon B.V. and its subsidiaries (“Muon Group”) (acquired November 18, 2022) and Iridian Spectral Technologies ("Iridian") (acquired May 19, 2023) have been included in the Company’s Condensed Consolidated Financial Statements since the respective dates of acquisition. Supplemental pro forma information has not been provided as the acquisitions did not have a material impact on the Company’s Condensed Consolidated Financial Statements individually or in the aggregate.

2023 Acquisitions

Iridian

On May 19, 2023, the Company acquired 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, Ontario, Canada, Iridian operates in the Company’s Scientific Fluidics & Optics reporting unit within the Health & Science Technologies (“HST”) segment. Iridian was acquired for cash consideration of $110.3 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $53.6 million and $45.6 million, respectively. The goodwill is not deductible for tax purposes.

6

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

The Company made a preliminary allocation of the purchase price for the Iridian 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. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

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	$	10.6
Property, plant and equipment	19.9
Goodwill	53.6
Intangible assets	45.6
Other noncurrent assets	5.4
Total assets acquired	135.1
Current liabilities	(1.2)
Deferred income taxes	(18.7)
Other noncurrent liabilities	(4.9)
Net assets acquired	$	110.3

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business.

The acquired intangible assets and weighted average amortization periods are as follows:

	Total		Weighted Average Life
Trade names	$	5.2	15
Customer relationships	29.3		12
Unpatented technology	11.1		11
Acquired intangible assets	$	45.6

The Company incurred $2.5 million and $3.6 million of acquisition-related costs during the three and six months ended June 30, 2023, respectively. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed.

2022 Acquisitions

Nexsight

On February 28, 2022, the Company acquired Nexsight in a partial stock and asset acquisition. 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 $112.5 million. The entire purchase price was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $54.7 million and $49.8 million, respectively. The goodwill is partially deductible for tax purposes.

7

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

The Company finalized the allocation of the purchase price for the Nexsight 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.

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	$	16.6
Property, plant and equipment	2.0
Goodwill	54.7
Intangible assets	49.8
Other noncurrent assets	4.3
Total assets acquired	127.4
Current liabilities	(9.2)
Deferred income taxes	(1.9)
Other noncurrent liabilities	(3.8)
Net assets acquired	$	112.5

Acquired intangible assets consist of trade names, customer relationships and software. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business.

The acquired intangible assets and weighted average amortization periods are as follows:

	Total		Weighted Average Life
Trade names	$	13.5	15
Customer relationships	31.5		10
Software	4.8		5
Acquired intangible assets	$	49.8

KZValve

On May 2, 2022, the Company acquired KZValve in an asset acquisition. KZValve is a leading manufacturer of electric valves and controllers used primarily in agricultural applications. KZValve augments and expands IDEX’s agricultural portfolio, complementing Banjo’s current fluid management solutions for these applications. Headquartered in Greenwood, Nebraska, KZValve operates in the Company’s Agriculture reporting unit within the FMT segment. KZValve was acquired for cash consideration of $120.1 million. The entire purchase was funded with cash on hand. Goodwill and intangible assets recognized as part of this transaction were $56.4 million and $52.0 million, respectively. The goodwill is deductible for tax purposes.

The Company finalized the allocation of the purchase price for the KZValve 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.

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:

8

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

	Total
Current assets, net of cash acquired	$	9.7
Property, plant and equipment	1.8
Goodwill	56.4
Intangible assets	52.0
Deferred income taxes	0.2
Other noncurrent assets	1.0
Total assets acquired	121.1
Current liabilities	(1.0)
Net assets acquired	$	120.1

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business.

The acquired intangible assets and weighted average amortization periods are as follows:

	Total		Weighted Average Life
Trade names	$	7.5	15
Customer relationships	36.0		13
Unpatented technology	8.5		10
Acquired intangible assets	$	52.0

Muon Group

On November 18, 2022, the Company acquired the stock of Muon Group. Muon Group manufactures highly precise flowpaths in a variety of materials that enable the movement of various liquids and gases in critical applications for medical, semiconductor, food processing, digital printing and filtration technologies. Muon Group maintains operations in Hapert, the Netherlands; Eerbeek, the Netherlands; Wijchen, the Netherlands; Dorset, United Kingdom and Pune, India and operates in the Company’s Scientific Fluidics & Optics reporting unit within the HST segment. Muon Group was acquired for cash consideration of $713.0 million. The purchase price was funded with $342.6 million of cash on hand, $170.4 million of proceeds from the Company's Revolving Credit Facility and $200.0 million of proceeds from the Company's Term Facility. Goodwill and intangible assets recognized as part of this transaction were $393.0 million and $319.1 million, respectively. The goodwill is not deductible for tax purposes.

The Company made a preliminary allocation of the purchase price for the Muon Group 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. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company will continue to make required adjustments to the purchase price allocation prior to the completion of the measurement period.

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:

9

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

	Total
Current assets, net of cash acquired	$	52.8
Property, plant and equipment	59.1
Goodwill	393.0
Intangible assets	319.1
Other noncurrent assets	9.6
Total assets acquired	833.6
Current liabilities	(25.8)
Deferred income taxes	(83.9)
Other noncurrent liabilities	(10.9)
Net assets acquired	$	713.0

Acquired intangible assets consist of trade names, customer relationships and unpatented technology. The goodwill recorded for the acquisition reflects the strategic fit, revenue and earnings growth potential of this business.

The acquired intangible assets and weighted average amortization periods are as follows:

	Total		Weighted Average Life
Trade names	$	38.3	15
Customer relationships	212.4		13
Unpatented technology	68.4		11
Acquired intangible assets	$	319.1

The Company incurred $1.7 million and $2.6 million of acquisition-related costs during the three and six months ended June 30, 2022, respectively. These costs were recorded in Selling, general and administrative expenses and were related to completed transactions, pending transactions and potential transactions, including transactions that ultimately were not completed. The Company also recorded $0.1 million and $0.3 million of fair value inventory step-up charges associated with the completed 2022 acquisitions of Nexsight and KZValve, respectively, in Cost of sales during the three and six months ended June 30, 2022.

3. Collaborative Investments

During 2021 and 2022, a subsidiary of IDEX funded a total of $7.2 million in promissory notes as an investment in a start-up company that provides communication technology to improve individual performance and team coordination for firefighters’ responses, which aligns with our FSDP segment’s strategic plan. On a quarterly basis, the Company evaluates whether an allowance for credit losses is required for these promissory notes and measures the allowance using the current expected credit loss model. While the Company continues to retain certain convertible equity rights as well as a secured interest in the intellectual property of the start-up company, during the second quarter of 2023, IDEX concluded it would pause additional funding for the start-up. As a result of the Company’s analysis of the recoverability of its investment during the second quarter, IDEX determined that its investment may no longer be recoverable. As a result, IDEX recorded a credit loss of $7.7 million in Other expense (income) - net in the Condensed Consolidated Statements of Income and a reserve in Other noncurrent assets on the Condensed Consolidated Balance Sheets for the full amount of the principal and accrued interest outstanding at June 30, 2023.

4.    Business Segments

IDEX has three reportable business segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified Products (“FSDP”).

The FMT segment designs, produces and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems and provides flow monitoring and other services for the

10

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

food, chemical, general industrial, water and wastewater, agriculture and energy industries. FMT application-specific pump and metering solutions serve a diverse range of end markets, including industrial infrastructure (fossil fuels, refined and alternative fuels and water and wastewater), energy, chemical processing, agriculture, food and beverage, semiconductor, pulp and paper, automotive/transportation, plastics and resins, electronics and electrical, construction and mining, pharmaceutical and biopharmaceutical, machinery and numerous other specialty niche markets.

The HST segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems, micro-precision components, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, precision photonic solutions and precision gear and peristaltic pump technologies. HST serves a variety of end markets, including food and beverage, life sciences, analytical instruments, pharmaceutical and biopharmaceutical, industrial, semiconductor, digital printing, automotive/transportation, medical/dental, energy, cosmetics, marine, chemical, wastewater and water treatment, research and aerospace/defense markets.

The FSDP segment designs, produces and distributes firefighting pumps, valves and controls, rescue tools, lifting bags and other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications in the automotive, energy and industrial markets and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses in the paint and industrial markets around the world.

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

11

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net sales
Fluid & Metering Technologies
External customers	$	324.1	$	299.5	$	645.2	$	571.4
Intersegment sales	1.0		0.4		1.7		0.5
Total segment sales	325.1		299.9		646.9		571.9
Health & Science Technologies
External customers	338.4		325.4		688.7		640.0
Intersegment sales	1.1		0.6		1.8		1.2
Total segment sales	339.5		326.0		690.5		641.2
Fire & Safety/Diversified Products
External customers	183.7		171.2		357.7		335.8
Intersegment sales	1.1		—		1.5		0.1
Total segment sales	184.8		171.2		359.2		335.9
Intersegment eliminations	(3.2)		(1.0)		(5.0)		(1.8)
Net sales	$	846.2	$	796.1	$	1,691.6	$	1,547.2
ADJUSTED EBITDA
Fluid & Metering Technologies	$	114.1	$	95.0	$	220.3	$	183.4
Health & Science Technologies	93.7		103.6		194.4		203.4
Fire & Safety/Diversified Products	54.5		45.1		104.2		89.5
Segment Adjusted EBITDA	262.3		243.7		518.9		476.3
Corporate and other	(21.6)		(24.5)		(48.4)		(42.4)
Adjusted EBITDA	240.7		219.2		470.5		433.9
- Interest expense	13.3		9.5		26.4		19.0
- Depreciation	14.4		12.5		27.2		24.7
- Amortization	23.2		16.9		46.8		32.2
- Fair value inventory step-up charges	—		0.4		—		0.4
- Restructuring expenses and asset impairments	3.6		2.8		4.1		2.8
+ Gains on sales of assets	—		—		—		(2.7)
- Credit loss on note receivable from collaborative partner(1)	7.7		—		7.7		—
Income before income taxes	$	178.5	$	177.1	$	358.3	$	357.5

(1) Represents a reserve on an investment with a collaborative partner that may no longer be recoverable. See Note 3 for further detail.

	June 30, 2023		December 31, 2022
ASSETS
Fluid & Metering Technologies	$	1,698.3	$	1,676.9
Health & Science Technologies	3,075.4		2,931.1
Fire & Safety/Diversified Products	793.0		771.8
Corporate and other	153.2		132.1
Total assets	$	5,719.9	$	5,511.9

12

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

5.    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 its 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 was attributed to geographical region based on the location of the customer. The following tables present revenue disaggregated by reporting unit and geographical region.

Revenue by reporting unit for the three and six months ended June 30, 2023 and 2022 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Pumps	$	109.2	$	104.5	$	214.3	$	201.9
Water	87.3		81.6		181.4		146.0
Energy	55.7		44.7		106.4		93.0
Agriculture	40.1		38.1		78.7		70.4
Valves	32.8		31.0		66.1		60.6
Intersegment elimination	(1.0)		(0.4)		(1.7)		(0.5)
Fluid & Metering Technologies	324.1		299.5		645.2		571.4
Scientific Fluidics & Optics	169.0		149.2		347.6		290.4
Performance Pneumatic Technologies	66.0		65.1		135.4		127.1
Sealing Solutions	62.4		68.0		127.1		138.2
Material Processing Technologies	33.0		34.8		60.7		68.5
Micropump	9.1		8.9		19.7		17.0
Intersegment elimination	(1.1)		(0.6)		(1.8)		(1.2)
Health & Science Technologies	338.4		325.4		688.7		640.0
Fire & Safety	109.8		99.8		216.0		195.5
Dispensing	44.7		43.8		80.9		85.4
BAND-IT	30.3		27.6		62.3		55.0
Intersegment elimination	(1.1)		—		(1.5)		(0.1)
Fire & Safety/Diversified Products	183.7		171.2		357.7		335.8
Net sales	$	846.2	$	796.1	$	1,691.6	$	1,547.2

13

IDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

(unaudited)

Revenue by geographical region for the three and six months ended June 30, 2023 and 2022 was as follows:

	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

	Three Months Ended June 30, 2022
	FMT		HST		FSDP		IDEX
U.S.	$	170.5	$	157.7	$	85.0	$	413.2
North America, excluding U.S.	16.6		9.5		8.5		34.6
Europe	51.8		92.5		42.0		186.3
Asia	41.2		60.8		26.6		128.6
Other (1)	19.8		5.5		9.1		34.4
Intersegment elimination	(0.4)		(0.6)		—		(1.0)
Net sales	$	299.5	$	325.4	$	171.2	$	796.1

	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