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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
[ ] 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 (I.R.S. Employer
incorporation or organization) Identification No.)
630 DUNDEE ROAD, NORTHBROOK, ILLINOIS 60062
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (847) 498-7070
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- ----------------------- -----------------------------------------
COMMON STOCK, PAR VALUE NEW YORK STOCK EXCHANGE
$.01 PER SHARE CHICAGO STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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 [X] No[ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
IDEX Corporation as of December 31, 2002 was $891,691,395.
The number of shares outstanding of IDEX Corporation's common stock, par
value $.01 per share (the "Common Stock"), as of January 31, 2003 was 32,504,959
(net of treasury shares).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 2002 Annual Report to Shareholders of IDEX Corporation (the
"2002 Annual Report") are incorporated by reference into Parts I and II of this
Form 10-K and portions of the definitive Proxy Statement of IDEX Corporation
(the "2003 Proxy Statement") with respect to the 2003 annual meeting of
shareholders are incorporated by reference into Part III of this Form 10-K.
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PART I
ITEM 1. BUSINESS.
We manufacture an extensive array of engineered industrial products sold to
customers in a variety of industries around the world. We believe that each of
our principal business units holds the number-one or number-two market share
position in each unit's niche market. We also believe that our consistent
financial performance has been attributable to the manufacture of quality
products designed and engineered by us, coupled with our ability to identify and
successfully integrate strategic acquisitions. IDEX Corporation ("IDEX" or the
"Company") consists of three reportable business segments: Pump Products Group,
Dispensing Equipment Group, and Other Engineered Products Group.
PUMP PRODUCTS GROUP
The Pump Products Group produces a wide variety of pumps, compressors, flow
meters, injectors and valves and related controls for the movement of liquids,
air and gases. The devices and equipment produced by this group are used by a
large and diverse set of industries including chemical processing, machinery,
water treatment, medical equipment, liquid petroleum distribution, oil and
refining, food and beverage, biotech, life sciences and drug processing. The
seven business units that comprise this group are Gast Manufacturing, Liquid
Controls, Micropump, Pulsafeeder, Rheodyne, Viking Pump and Warren Rupp. The
group accounted for 58% of sales and 62% of operating income in 2002, with 37%
of sales shipped to customers outside the U.S.
Gast Manufacturing. Gast Manufacturing (Gast), acquired in 1998, is a
leading manufacturer of air-moving products with an estimated one-third U.S.
market share in air motors, low- and medium-range vacuum pumps, vacuum
generators, regenerative blowers and fractional horsepower compressors. Gast's
products are used in applications requiring a quiet, clean source of moderate
vacuum or pressure. Gast's primary markets served are medical equipment,
environmental equipment, computers and electronics, printing machinery, paint
mixing machinery, packaging machinery, graphic arts and industrial
manufacturing. Gast is based in Benton Harbor, Michigan, with an additional
operation in England. Approximately 20% of Gast's 2002 sales were to customers
outside the U.S.
Liquid Controls. Liquid Controls, acquired in January 2001, is a leading
manufacturer of positive displacement flow meters and electronic registration
and control products with an estimated one-third market share in its U.S.
markets. Applications for its products include mobile and stationary metering
installations for wholesale and retail distribution of petroleum and LP gas,
aviation refueling, and industrial metering and dispensing of liquids and gases.
Liquid Controls is headquartered in Lake Bluff, Illinois, with additional
operations in Italy and India. During 2001, the Company decided to operate its
previously acquired Corken business unit as part of Liquid Controls. Corken,
based in Oklahoma City, Oklahoma and acquired by IDEX in 1991, is a leading
producer of positive displacement rotary vane pumps, single and multistage
regenerative turbine pumps, and small horsepower reciprocating piston
compressors. Approximately 50% of Liquid Controls' 2002 sales were outside the
U.S.
Micropump. Micropump, acquired in 1995, is a leader in small,
precision-engineered, magnetically and electromagnetically driven rotary gear,
piston and centrifugal pumps with an approximate 40% U.S. market share.
Micropump's products are used in low-flow abrasive and corrosive applications.
Micropump serves markets including printing machinery, medical equipment,
chemical processing, pharmaceutical, refining, laboratory, electronics, pulp and
paper, water treatment and textiles. Micropump has its headquarters facility in
Vancouver, Washington, and also has operations in England. In April 2000, IDEX
acquired Ismatec SA. Ismatec is a leading manufacturer of peristaltic metering
pumps, analytical process controllers, and sample preparation systems.
Headquartered near Zurich, Switzerland, the business operates as part of
Micropump and provides Micropump with entry into scientific R&D markets
including pharmaceutical, medical, biotech and institutional laboratory. In May
2000, IDEX acquired Trebor International, which also now operates as part of
Micropump. Trebor is headquartered in Salt Lake City, Utah, and is a leader in
high-purity fluid handling products, including air-operated diaphragm pumps and
deionized water-heating systems. Its products are used to make semiconductors,
disk drives and flat panel displays. Approximately 65% of Micropump's 2002 sales
were to customers outside the U.S.
1
Pulsafeeder. Pulsafeeder, acquired in 1992, is a leading manufacturer of
metering pumps, special purpose rotary pumps, peristaltic pumps, electronic
controls and dispensing equipment with an estimated one-third U.S. market share.
Pulsafeeder's products are used to introduce precise amounts of fluids into
processes to manage water quality and chemical composition. Pulsafeeder's
markets include water and wastewater treatment, power generation, pulp and
paper, chemical and hydrocarbon processing and swimming pools. This business is
headquartered in Rochester, New York, with additional operations in Punta Gorda,
Florida. Knight Equipment International was acquired in 1997 and is operated as
part of the Pulsafeeder business unit. Knight, headquartered in Lake Forest,
California, also has additional operations in The Netherlands. Knight is a
leading manufacturer of pumps and dispensing equipment for industrial laundries,
commercial dishwashing and chemical metering. Halox Technologies, Inc. was
acquired in April 2002 and is also operated as part of the Pulsafeeder business
unit. Halox is a small Bridgeport, Connecticut based manufacturer of
point-of-use chlorine dioxide equipment. Its products produce chlorine dioxide
for use in water treatment and disinfectant applications. Chlorine dioxide is an
effective biocide treatment of legionella and other water-borne pathogens. Halox
products can be used in a wide variety of end markets including food and
beverage, cooling towers and potable water treatement. In 2002, approximately
30% of Pulsafeeder's sales were to customers outside the U.S.
Rheodyne. Rheodyne L.P., acquired in July 2002, is a leading manufacturer
of injectors, valves, fittings and accessories for the analytical
instrumentation market. Its products are used by manufacturers of high
performance liquid chromatography equipment servicing the pharmaceutical,
biotech, life science, food and beverage, and chemical markets. Rheodyne, based
in Rohnert Park, California, became IDEX's twelfth stand-alone business unit and
its activities are closely coordinated with those of Ismatec, Trebor and
Micropump. Approximately 45% of Rheodyne's 2002 sales were to customers outside
the U.S.
Viking Pump. Viking Pump is one of the world's largest internal gear pump
producers. In the U. S., it has an estimated 40% of the rotary gear pump market.
Viking also produces lobe and external gear pumps, strainers and reducers, and
related controls. These products are used for transferring and metering thin and
viscous liquids. Markets served by Viking include chemical, petroleum, pulp and
paper, plastics, paints, inks, tanker trucks, compressor, construction, food,
beverage, personal care, pharmaceutical and biotech. Viking operates two
foundries that supply a majority of Viking's castings requirements and also
sells a variety of castings to outside customers. Viking is based in Cedar
Falls, Iowa, with additional operations in Canada, England and Ireland.
Wrightech Corporation was acquired in October 2002 and is headquartered in
Waukesha, Wisconsin. Wrightech, which operates as part of Viking Pump, is a
small manufacturer of stainless-steel positive displacement pumps and
replacement parts for the sanitary product marketplace. This market includes
beverage, food processing, pharmaceutical, cosmetics and other industries that
require sanitary processing. Approximately 30% of Viking's 2002 sales were to
customers outside the U.S.
Warren Rupp. Warren Rupp is a leading producer of double-diaphragm pumps,
both air-operated and motor-driven, and accessories with an estimated 30% U.S.
market share. Warren Rupp's products are used for abrasive and semisolid
materials as well as for applications where product degradation is a concern or
where electricity is not available or should not be used. This business serves
markets including chemical, paint, food processing, electronics, construction,
utilities, mining and industrial maintenance. Warren Rupp is based in Mansfield,
Ohio, with additional operations in England. Blagdon Pump, located in the U.K.,
was acquired in 1997 and is operated as part of the Warren Rupp business unit.
Versa-Matic Tool, Inc. (Versa-Matic) was acquired in June 2001 and also operates
as part of Warren Rupp. Headquartered in Export, Pennsylvania, Versa-Matic is a
leading manufacturer and distributor of air-operated double-diaphragm pumps and
pump replacement parts. Warren Rupp's sales to customers outside the U.S. in
2002 were approximately 45%.
DISPENSING EQUIPMENT GROUP
The Dispensing Equipment Group produces highly engineered equipment for
dispensing, metering and mixing colorants, paints, inks and dyes; refinishing
equipment; and centralized lubrication systems. This equipment is used in a
variety of retail and commercial industries around the world. This group
provides equipment, systems, and services for applications such as tinting
paints and coatings, industrial and automotive refinishing, and the precise
lubrication of machinery and transportation equipment. The three business units
that comprise this group are FAST, Fluid Management and Lubriquip. The group
accounted for 19% of sales and 16% of operating income in 2002, with 54% of
sales shipped to customers outside the U.S.
2
FAST. The Company acquired FAST S.p.A. (FAST) in 1999. FAST is a leading
European manufacturer of precision-designed tinting, mixing, dispensing and
measuring equipment for refinishing, architectural and industrial paints, inks,
dyes, pastes and other liquids. Management estimates that FAST has a 20%
European share of the architectural and refinishing equipment markets. FAST's
products are used for the precise and reliable reproduction of colors based on
paint producers' formulas. Through architectural, refinishing and industrial
paint producers, precision equipment is supplied to retail and commercial
stores, home centers, and automotive body shops. Over 95% of FAST's sales in
2002 were to customers outside the U.S. FAST is based in Milan, Italy.
Fluid Management. Fluid Management, acquired in 1996, is the market leader
in automatic and manually operated dispensing, metering and mixing equipment for
the paints and coatings market with an estimated 50% worldwide market share.
Fluid Management's products are used for the precise blending of base paints,
tints and colorants, and inks and dyes. Fluid Management's markets include
retail and commercial paint stores, hardware stores, home centers, department
stores, printers, and paint and ink manufacturers. Fluid Management is based in
Wheeling, Illinois. Additional operations are located in The Netherlands and
Australia. Approximately 45% of Fluid Management's 2002 sales were to customers
outside the U.S.
Lubriquip. Lubriquip is a market leader in centralized oil and grease
lubrication systems, force-feed lubricators, metering devices, related
electronic controls and accessories with an estimated 25% share of the U.S.
market for centralized oil lubrication systems. Lubriquip's products are used to
prolong equipment life, reduce maintenance costs and increase productivity.
Lubriquip serves markets including machine tools, transfer machines, conveyors,
packaging equipment, transportation equipment, construction machinery, food
processing and paper machinery. Lubriquip is headquartered in Warrensville
Heights, Ohio, with an additional operation in Madison, Wisconsin. Approximately
20% of Lubriquip's sales in 2002 were to customers outside the U.S.
OTHER ENGINEERED PRODUCTS GROUP
The Other Engineered Products Group produces firefighting pumps, rescue
tools and other components and systems for the fire and rescue industry, and
engineered stainless steel banding and clamping devices used in a variety of
industrial and commercial applications. The two business units that comprise
this group are Hale Products and Band-It. The group accounted for 23% of sales
and 22% of operating income in 2002, with 42% of sales shipped to customers
outside the U.S.
Band-It. Band-It is a leading producer of high-quality stainless steel
bands, buckles and clamping systems with an estimated 45% worldwide market
share. Band-It's products are used for securing hose fittings, signs, signals,
pipes, poles, electrical shielding and bundling and numerous other industrial
and commercial applications. Signfix was acquired in 1993 and is being operated
as part of the Band-It business unit. Band-It's markets include transportation
equipment, oil and gas, industrial maintenance, electronics, electrical,
communications, aerospace, traffic and commercial signs. Band-It is based in
Denver, Colorado, with three additional operations in England and one in
Singapore. In 2002, approximately 55% of Band-It's sales were to customers
outside the U.S.
Hale Products. Hale Products (Hale), acquired in 1994, is a leading
manufacturer of truck-mounted fire pumps and rescue systems with an estimated
40% worldwide market share. Hale's products include the Hurst Jaws of Life(R)
and LUKAS(R) rescue tool and re-railing systems. Hale's pumps are used to pump
water or foam to extinguish fires; its rescue equipment is used to extricate
accident victims; and its forced entry equipment is used for law enforcement,
disaster recovery, and recycling. Hale's markets include public and private fire
and rescue organizations. In January 2001, IDEX acquired Class 1, headquartered
in Ocala, Florida, which now is also operated as part of Hale. Class 1 is a
leading supplier of components and systems to the fire and rescue vehicle
market. Its primary products include electronic information controls, engine
information systems, electronic multiplexing units, electrical monitoring
equipment and systems and fire truck mechanical components. LUKAS was acquired
in 1995 and is operated as part of the Hale business unit. Hale is headquartered
in Ocala, Florida, with additional operations in Conshohocken, Pennsylvania,
Shelby, North Carolina, England and Germany. Approximately 35% of Hale's 2002
sales were to customers outside the U.S.
3
GENERAL ASPECTS APPLICABLE TO THE COMPANY'S BUSINESS GROUPS
COMPETITORS
The Company's businesses participate in highly competitive markets.
Generally, all of the Company's businesses compete on the basis of performance,
quality, service, and price.
Principal competitors of the businesses in the Pump Products Group are the
Blackmer division of Dover Corporation (with respect to rotary gear pumps, and
pumps and small horsepower compressors used in liquified petroleum gas
distribution facilities); Milton Roy, a division of United Technologies
Corporation (with respect to metering pumps and controls); Roper Industries and
Tuthill Corporation (with respect to rotary gear pumps); Wilden Pump and
Engineering Co., a division of Dover Corporation (with respect to air-operated
double-diaphragm pumps); and Thomas Industries (with respect to vacuum pumps and
compressors).
The principal competitors of the Dispensing Equipment Group are Corob
S.p.A. (with respect to dispensing and mixing equipment for the paint industry)
and Lincoln Industrial (with respect to centralized lubrication systems).
The Other Engineered Products Group's principal competitors are A.J.
Gerrard & Company, a division of Illinois Tool Works Inc. (with respect to
stainless steel bands, buckles and tools) and Waterous Company, a division of
American Cast Iron Pipe Company (with respect to truck-mounted fire-fighting
pumps).
EMPLOYEES
At December 31, 2002, IDEX had approximately 3,900 employees. Approximately
15% were represented by labor union with various contracts expiring though March
2007. Management believes that the Company's relationship with its employees is
good. The Company has historically been able to satisfactorily renegotiate its
collective bargaining agreements, with its last work stoppage in March 1993.
SUPPLIERS
IDEX manufactures many of the parts and components used in its products.
Substantially all materials, parts and components purchased by IDEX are
available from multiple sources.
INVENTORY AND BACKLOG
The Company regularly and systematically adjusts production schedules and
quantities based on the flow of incoming orders. Backlogs are therefore
typically limited to approximately 1 to 1 1/2 months of production. While total
inventory levels may also be affected by changes in orders, the Company
generally tries to maintain relatively stable inventory levels based on its
assessment of the requirements of the various industries served.
SEGMENT INFORMATION
For segment financial information for the years 2002, 2001, and 2000, see
the table titled "Company and Business Group Financial Information" presented on
page 18 under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 9 of the "Notes to Consolidated Financial
Statements" on page 31 of the 2002 Annual Report, which is incorporated herein
by reference.
4
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names of the executive officers of the
Company, their ages, years of service, the positions held by them, and their
business experience during the past 5 years.
YEARS OF
NAME AGE SERVICE (1) POSITION
- ---- --- ----------- --------
Dennis K. Williams........ 56 3 Chairman of the Board, President and
Chief Executive Officer
Wayne P. Sayatovic........ 56 30 Senior Vice President-Finance and Chief
Financial Officer
Kimberly K. Bors.......... 42 -- Vice President-Human Resources
James S. Dahlke........... 52 -- Vice President-Group Executive
Harley B. Kaplan.......... 48 1 Vice President-Group Executive
Clinton L. Kooman......... 59 38 Vice President-Controller
Douglas C. Lennox......... 50 23 Vice President-Treasurer
John L. McMurray.......... 52 10 Vice President-Operational Excellence
Dennis L. Metcalf......... 55 29 Vice President-Corporate Development
Frank J. Notaro........... 39 5 Vice President-General Counsel and
Secretary
David T. Windmuller....... 45 22 Vice President-Group Executive
- -------------
(1) The years of service for executive officers include the period prior to
acquisition by IDEX or with IDEX's predecessor company.
Mr. Williams was appointed Chairman of the Board, President and Chief
Executive Officer by the Board of Directors, effective May 1, 2000. Prior to
joining IDEX, Mr. Williams was a senior executive of the General Electric
Company, most recently serving as President and Chief Executive Officer of GE
Power Systems Industrial Products, a global business with $4 billion in sales,
based in Florence, Italy. Prior to heading GE Power Systems Industrial Products,
he was President and Chief Executive Officer of GE's Nuovo Pignone business, one
of the world's leading manufacturers of gas turbines and high-pressure
industrial compressors.
Mr. Sayatovic has been Senior Vice President-Finance and Chief Financial
Officer of the Company since January 1992.
Ms. Bors has been Vice President-Human Resources of the Company since
January 2003. Prior to joining IDEX, Ms. Bors was vice president of people and
process integration from December 2000 to December 2002 for Brunswick
Corporation's Boat Group, a $1.4 billion manufacturer of recreational boats.
From December 1998 to December 2000, Ms. Bors was president of Chris Craft Boat,
a division of Outboard Marine Corporation, a $1 billion recreational marine
company. From December 1995 to December 1998, Ms. Bors was vice president of
human resources at Outboard Marine Corporation.
Mr. Dahlke has been Vice President-Group Operations since September 2002.
Prior to joining IDEX, Mr. Dahlke was president from September 1999 to August
2002 of the Office Products Division of Knape & Vogt, a manufacturer of hardware
for the office furniture industry as well as office accessories. From 1995 to
1999, Mr. Dahlke was president of Harrow Industries in Grand Rapids, MI. Harrow
Industries was a holding company of six autonomous businesses serving the
commercial, industrial and consumer markets. Mr. Dahlke was also a shareholder
and officer of Wrightech Corporation, which was acquired by IDEX in October
2002.
Mr. Kaplan has been Vice President-Group Operations since March 2002. Prior
to joining IDEX, Mr. Kaplan was president and chief executive officer from March
2001 to March 2002 of Wells Lamont Corporation, a worldwide leader in industrial
and consumer hand protection. From October 1996 to March 2001, Mr. Kaplan was
president of Koehler-Bright Star, Inc., a wholly-owned subsidiary of the Marmon
Group.
Mr. Kooman has been Vice President-Controller of the Company since November
1995.
5
Mr. Lennox has served as Vice President-Treasurer of the Company since
November 1995.
Mr. McMurray has been Vice President-Operational Excellence of the Company
since October 2000. Mr. McMurray previously served as Vice President-Group
Executive from November 1998 through September 2000, and President of Viking
Pump from January 1997 through September 2000.
Mr. Metcalf has served as Vice President-Corporate Development of the
Company since March 1997.
Mr. Notaro has served as Vice President-General Counsel and Secretary since
March 1998. Previously, Mr. Notaro was a partner of Hodgson Russ LLP.
Mr. Windmuller has served as Vice President-Group Executive since October
2000. Mr. Windmuller served as Vice President-Operations of the Company from
January 1998 through September 2000.
The Company's executive officers are elected at a meeting of the Board of
Directors immediately following the annual meeting of shareholders, and they
serve until the next annual meeting of the Board, or until their successors are
duly elected.
PUBLIC FILINGS
Copies of the Company's annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and amendments to those reports are
available through the Company's web site at http://www.idexcorp.com.
-----------------------
ITEM 2. PROPERTIES.
The Company's principal plants and offices have an aggregate floor space
area of approximately 2.9 million square feet, of which 2.0 million square feet
(69%) are located in the U.S. and approximately 0.9 million square feet (31%)
are located outside the U.S., primarily in Italy (10%), the U.K. (9%), The
Netherlands (5%) and Germany (4%). These facilities are considered to be
suitable and adequate for their operations. Management believes that utilization
of manufacturing capacity ranges from 40% to 70% in each facility. The Company's
executive office occupies approximately 18,000 square feet of leased space in
Northbrook, Illinois.
Approximately 2.1 million square feet (72%) of the principal plant and
office floor area is owned by the Company, and the balance is held under lease.
Approximately 1.6 million square feet (55%) of the principal plant and office
floor area is held by business units in the Pump Products Group; 0.7 million
square feet (23%) is held by business units in the Dispensing Equipment Group;
and 0.6 million square feet (22%) is held by business units in the Other
Engineered Products Group.
ITEM 3. LEGAL PROCEEDINGS.
IDEX and five of its subsidiaries have been named as defendants in a number
of lawsuits claiming various asbestos-related personal injuries, allegedly as a
result of exposure to products manufactured with components that contained
asbestos. Such components were acquired from third party suppliers, and were not
manufactured by any of the subsidiaries. To date, all of the Company's
settlements and legal costs, except for costs of coordination, administration,
insurance investigation and a portion of defense costs have been covered in full
by insurance. However, the Company cannot predict whether and to what extent
insurance will be available to continue to cover such settlements and legal
costs, or how insurers may respond to claims that are tendered to them.
Claims have been filed in California, Illinois, Michigan, Mississippi, New
Jersey, New York, Ohio, Pennsylvania and Washington. A few claims have been
settled for minimal amounts and some have been dismissed without payment. None
have been tried.
No provision has been made in the financial statements of the Company, and
IDEX does not currently believe the asbestos-related claims will have a material
adverse effect on the Company's business or financial position.
IDEX is also party to various other legal proceedings arising in the
ordinary course of business, none of which are expected to have a material
adverse effect on its business, financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS.
Information regarding the prices of, and dividends on, the Common Stock,
and certain related matters, is incorporated herein by reference to "Shareholder
Information" on page 41 of the 2002 Annual Report.
The principal market for the Common Stock is the New York Stock Exchange,
but the Common Stock is also listed on the Chicago Stock Exchange. As of January
31, 2003, the Common Stock was held by approximately 4,700 shareholders and
there were 32,504,959 shares of Common Stock outstanding, net of treasury
shares.
ITEM 6. SELECTED FINANCIAL DATA.
The information set forth under "Historical Data" on pages 14 and 15 of the
2002 Annual Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 16 to 23 of the 2002
Annual Report is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
The information set forth under the caption "Market Risk" on page 23 of the
2002 Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements of IDEX, including Notes thereto,
together with the independent auditors' report thereon of Deloitte & Touche LLP
on pages 24 to 37 of the 2002 Annual Report are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT AUDITORS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
7
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Certain information regarding the directors of the Company is incorporated
herein by reference to the information set forth under the caption "Election of
Directors" in the 2003 Proxy Statement.
Information regarding executive officers of the Company is incorporated
herein by reference to Item 1 of this report under the caption "Executive
Officers of the Registrant" on page 5.
Certain information regarding compliance with Section 16(a) of the
Securities and Exchange Act of 1934, as amended, is incorporated herein by
reference to the information set forth under "Section 16(a) Beneficial Ownership
Reporting Compliance" in the 2003 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding executive compensation is incorporated herein by
reference to the materials under the caption "Compensation of Executive
Officers" in the 2003 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding security ownership of certain beneficial owners and
management is incorporated herein by reference to the information set forth
under the caption "Security Ownership" in the 2003 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information regarding certain relationships and related transactions is
incorporated herein by reference to the information set forth under the caption
"Certain Interests" in the 2003 Proxy Statement.
8
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) 1. Financial Statements
The following financial statements are incorporated herein by reference to
the 2002 Annual Report.
2002 ANNUAL
REPORT PAGE
-----------
Consolidated Balance Sheets as of December 31, 2002 and 2001 ................................ 24
Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000... 25
Consolidated Shareholders' Equity for the Years Ended December 31, 2002, 2001 and 2000 ...... 26
Consolidated Cash Flows for the Years Ended December 31, 2002, 2001 and 2000 ................ 27
Notes to Consolidated Financial Statements .................................................. 28-36
Independent Auditors' Report ................................................................ 37
2. Financial Statement Schedule
2002 FORM
10-K PAGE
---------
(a) Independent Auditors' Report.................................................. 10
(b) Schedule II -- Valuation and Qualifying Accounts.............................. 11
All other schedules are omitted because they are not applicable,
not required, or because the required information is included in
the Consolidated Financial Statements of IDEX or the Notes thereto.
3. Exhibits
The exhibits filed with this report are listed on the "Exhibit Index."
(B) Report on Form 8-K
None filed in the fourth quarter 2002.
9
INDEPENDENT AUDITORS' REPORT
IDEX Corporation:
We have audited the consolidated financial statements of IDEX Corporation
and its Subsidiaries as of December 31, 2002 and 2001 and for each of the three
years in the period ended December 31, 2002, and have issued our report thereon;
dated January 23, 2003: such financial statements and report are included in
your 2002 Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the financial statement schedule of IDEX
Corporation, listed in Item 14. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly, in all material respects, the information set forth
therein.
DELOITTE & TOUCHE LLP
Chicago, Illinois
January 23, 2003
10
IDEX CORPORATION AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
(IN THOUSANDS)
BALANCE CHARGED TO BALANCE
BEGINNING TO COSTS END OF
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS OTHER YEAR
- ----------- --------- ---------- ---------- ------------ -------
ALLOWANCE FOR DOUBTFUL ACCOUNTS
- --------------------------------
Year Ended December 31, 2002:
Deducted from assets to which they apply:
Allowance for Doubtful Accounts ............ $3,375 $ 75(1) $ 533(2) $ 172(3) $3,089
Year Ended December 31, 2001:
Deducted from assets to which they apply:
Allowance for Doubtful Accounts ............ 3,342 830(1) 1,269(2) 472(3) 3,375
Year Ended December 31, 2000:
Deducted from assets to which they apply:
Allowance for Doubtful Accounts ............ 3,135 481(1) 459(2) 185(3) 3,342
ACCRUED RESTRUCTURING
- ---------------------
Year ended December 31, 2002:
Deducted from liabilities to which they apply:
Accrued Restructuring ...................... $5,479 $ 1,328 $4,796(4) (1,531)(5) $ 480
Year ended December 31, 2001:
Deducted from liabilities to which they apply:
Accrued Restructuring ...................... -- 11,226 5,747(4) -- 5,479
Year ended December 31, 2000:
Deducted from liabilities to which they apply:
Accrued Restructuring ...................... -- -- -- -- --
- -----------
(1) Includes provision for doubtful accounts, sales returns and sales discounts
granted to customers.
(2) Represents uncollectible accounts, net of recoveries.
(3) Represents acquisition, translation and reclassification adjustments.
(4) Represents expenditures on liabilities established for restructuring.
(5) Represents reversal of restructuring charges initially recorded.
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
IDEX CORPORATION
By: /s/ WAYNE P. SAYATOVIC
----------------------------------
WAYNE P. SAYATOVIC
Senior Vice President -- Finance and
Chief Financial Officer
Date: February 28, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ DENNIS K. WILLIAMS Chairman of the Board, President, Chief
- ------------------------------------- Executive Officer (Principal Executive Officer)
Dennis K. Williams and Director February 28, 2003
/S/ WAYNE P. SAYATOVIC Senior Vice President -- Finance and Chief
- ------------------------------------- Financial Officer (Principal Financial and
Wayne P. Sayatovic Accounting Officer) February 28, 2003
/S/ BRADLEY J. BELL Director
- -------------------------------------
Bradley J. Bell February 28, 2003
/S/ GREGORY B. KENNY Director
- -------------------------------------
Gregory B. Kenny February 28, 2003
/S/ WILLIAM H. LUERS Director
- -------------------------------------
William H. Luers February 28, 2003
/S/ PAUL E. RAETHER Director
- -------------------------------------
Paul E. Raether February 28, 2003
/S/ NEIL A. SPRINGER Director
- -------------------------------------
Neil A. Springer February 28, 2003
/S/ MICHAEL T. TOKARZ Director
- -------------------------------------
Michael T. Tokarz February 28, 2003
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CERTIFICATION
I, Dennis K. Williams, certify that:
1. I have reviewed this annual report on Form 10-K of IDEX Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
February 28, 2003 /s/ DENNIS K. WILLIAMS
-----------------------------------
DENNIS K. WILLIAMS
Chairman, President and Chief
Executive Officer
13
CERTIFICATION
I, Wayne P. Sayatovic, certify that:
1. I have reviewed this annual report on Form 10-K of IDEX Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
February 28, 2003 /s/ WAYNE P. SAYATOVIC
------------------------------------
WAYNE P. SAYATOVIC
Senior Vice President -- Finance and
Chief Financial Officer
14
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Restated Certificate of Incorporation of IDEX Corporation
(formerly HI, Inc.) (incorporated by reference to Exhibit No. 3.1
to the Registration Statement on Form S-1 of IDEX, et al.,
Registration No. 33-21205, as filed on April 21, 1988)
3.1(a) Amendment to Restated Certificate of Incorporation of IDEX
Corporation (formerly HI, Inc.) (incorporated by reference to
Exhibit No. 3.1(a) to the Quarterly Report of IDEX on Form 10-Q
for the quarter ended March 31, 1996, Commission File No. 1-10235)
3.2 Amended and Restated By-Laws of IDEX Corporation (incorporated by
reference to Exhibit No. 3.2 to Post-Effective Amendment No. 2 to
the Registration Statement on Form S-1 of IDEX, et al.,
Registration No. 33-21205, as filed on July 17, 1989)
3.2(a) Amended and Restated Article III, Section 13 of the Amended and
Restated By-Laws of IDEX Corporation (incorporated by reference to
Exhibit No. 3.2(a) to Post-Effective Amendment No. 3 to the
Registration Statement on Form S-1 of IDEX, et al., Registration
No. 33-21205, as filed on February 12, 1990)
4.1 Restated Certificate of Incorporation and By-Laws of IDEX
Corporation (filed as Exhibits No. 3.1 through 3.2 (a))
4.2 Indenture, dated as of February 23, 1998, between IDEX
Corporation, and Norwest Bank Minnesota, National Association, as
Trustee, relating to the 6-7/8% of Senior Notes of IDEX due
February 15, 2008 (incorporated by reference to Exhibit No. 4.1 to
the Current Report of IDEX on Form 8-K dated February 23, 1998,
Commission File No. 1-10235)
4.3 Specimen Senior Note of IDEX Corporation (incorporated by
reference to Exhibit No. 4.1 to the Current Report of IDEX on Form
8-K dated February 23, 1998, Commission File No. 1-10235)
4.4 Specimen Certificate of Common Stock of IDEX Corporation
(incorporated by reference to Exhibit No. 4.3 to the Registration
Statement on Form S-2 of IDEX, et al., Registration No. 33-42208,
as filed on September 16, 1991)
4.5 Credit Agreement, dated as of June 8, 2001, among IDEX
Corporation, Bank of America N.A. as Agent and Issuing Bank, and
the Other Financial Institutions Party Hereto: Bank of America
Securities LLC. (incorporated by reference to Exhibit No. 4.5 to
the Quarterly Report of IDEX on Form 10-Q for the quarter ended
June 30, 2001, Commission File No. 1-10235) 4.6 Credit Lyonnais
Uncommitted Line of Credit, dated as of December 3, 2001
*4.6 (a) Amendment No. 1 dated as of November 22, 2002 to the Credit
Lyonnais Uncommitted Line of Credit Agreement dated December 3,
2001 4.7 Receivables Purchase Agreement dated as of December 20,
2001 among IDEX Receivables Corporation, as Seller, IDEX
Corporation, as Servicer, Falcon Asset Securitization Corporation,
the Several Financial Institutions from Time to Time Party Hereto,
and Bank One, NA (Main Office Chicago), as Agent
4.7 Receivables Purchase Agreement dated as of December 20, 2001 among
IDEX Receivables Corporation, as Seller, IDEX Corporation, as
Servicer, Falcon Asset Securitization Corporation, the Several
Financial Institutions from Time to Time Party Hereto, and Bank
One, NA (Main Office Chicago), as Agent
*4.7 (a) Amended and Restated Fee Letter dated as of December 18, 2002 of
the Receivables Purchase Agreement dated as of December 20, 2001
4.8** Form of Shareholder Purchase and Sale Agreement of IDEX
Corporation (incorporated by reference to Exhibit No. 10.24 to
Amendment No. 1 to the Registration Statement on Form S-1 of IDEX,
et al., Registration No. 33-28317, as filed on June 1, 1989)
15
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.9 Registration Rights Agreement, dated January 22, 1988, among
IDEX, KKR Associates and IDEX Associates, relating to the Common
Stock (Incorporated by reference to Exhibit No. 10.8 to the
Registration Statement on Form S-1 of IDEX Corporation, et al.,
Registration No. 33-21205, as filed on April 21, 1988)
4.9 (a) Amendment to Registration Rights Agreement, dated as of September
13, 2002, among IDEX and KKR Associates, L.P. (incorporated by
reference to Exhibit No. 10.3 to the Registration Statement on
Form S-3 of IDEX, Registration No. 333-99591, as filed on
September 13, 2002)
10.1** Employment Agreement between IDEX Corporation and Dennis K.
Williams, dated April 14, 2000 (incorporated by reference to
Exhibit No. 10.6 to the Quarterly Report of IDEX on Form 10-Q for
the quarter ended June 30, 2000, Commission File No. 1-10235)
10.2** Amended and Restated Employment Agreement between IDEX
Corporation and Wayne P. Sayatovic, dated March 31, 2000
(incorporated by reference to Exhibit No. 10.2 to the Quarterly
Report of IDEX on Form 10-Q for the quarter ended March 31, 2000,
Commission File No. 1-10235)
10.2(a)** Letter Agreement between IDEX Corporation and Wayne P.
Sayatovic dated April 24, 2000 (incorporated by reference to
Exhibit No. 10.7 to the Quarterly Report of IDEX on Form 10-Q
for the quarter ended June 30, 2000, Commission File No.
1-10235)
10.3** Revised and Restated Management Incentive Compensation Plan for
Key Employees Effective January 1, 2002
10.4** Form of Indemnification Agreement of IDEX Corporation
(incorporated by reference to Exhibit No. 10.23 to the
Registration Statement on Form S-1 of IDEX, et al., Registration
No. 33-28317, as filed on April 26, 1989)
10.5** Form of Shareholder Purchase and Sale Agreement of IDEX
Corporation (filed as Exhibit No. 4.8)
10.6** IDEX Corporation Amended and Restated Stock Option Plan for
Outside Directors adopted by resolution of the Board of Directors
dated as of January 25, 2000 (incorporated by reference to
Exhibit No. 10.1 of the Quarterly Report of IDEX on Form 10-Q for
the quarter ended March 31, 2000, Commission File No. 10-10235)
10.7 Registration Rights Agreement, dated January 22, 1988, among
IDEX, KKR Associates and IDEX Associates, relating to the Common
Stock (filed as Exhibit No. 4.9)
10.7(a) Amendment to Registration Rights Agreement, dated as of September
13, 2002, among IDEX and KKR Associates, L.P. (filed as Exhibit
No. 4.9(a))
10.8** Non-Qualified Stock Option Plan for Non-Officer Key Employees of
IDEX Corporation (incorporated by reference to Exhibit No. 10.15
to the Annual Report of IDEX on Form 10-K for the year ended
December 31, 1992, Commission File No. 1-102351)
10.8(a)** 1996 Stock Plan for Non-Officer Key Employees of IDEX Corporation
(incorporated by reference to Exhibit No. 4.5 to the Registration
Statement on Form S-8 of IDEX, et al., Registration No.
333-18643, as filed on December 23, 1996)
10.8(b)** First Amended and Restated 1996 Stock Option Plan for Non-Officer
Key Employees of IDEX Corporation dated March 27, 2001
10.8(c)** Second Amended and Restated 1996 Stock Option Plan for
Non-Officer Key Employees of IDEX Corporation dated March 26,
2002
16
10.9** Non-Qualified Stock Option Plan for Officers of IDEX Corporation
(incorporated by reference to Exhibit No. 10.16 to the Annual
Report of IDEX on Form 10-K for the year ended December 31, 1992,
Commission File No. 1-102351)
10.10** First Amended and Restated 1996 Stock Plan for Officers of IDEX
Corporation (incorporated by reference to Exhibit No. 10.1 to the
Quarterly Report of IDEX on Form 10-Q for the quarter ended March
31, 1998, Commission File No. 1-102351)
10.11** 2001 Stock Plan for Officers dated March 27, 2001 (incorporated
by reference to Exhibit No. 10.2 to the Quarterly Report of IDEX
on Form 10-Q for the quarter ended March 31, 2001, Commission
File No. 1-10235)
10.12** Executive Incentive Bonus Plan dated March 27, 2001 (incorporated
by reference to Exhibit No. 10.1 to the Quarterly Report of IDEX
on Form 10-Q for the quarter ended March 31, 2001, Commission
File No. 1-10235)
10.13** IDEX Corporation Supplemental Executive Retirement Plan
(incorporated by reference to Exhibit No. 10.17 to the Annual
Report of IDEX on Form 10-K for the year ended December 31, 1992,
Commission File No. 1-102351)
10.14** Second Amended and Restated IDEX Corporation Directors Deferred
Compensation Plan (incorporated by reference to Exhibit No.
10.14(b) to the Annual Report of IDEX on Form 10-K for the year
ended December 31, 1997, Commission File No. 1-10235)
10.15** IDEX Corporation 1996 Deferred Compensation Plan for Officers
(incorporated by reference to Exhibit No. 4.8 to the Registration
Statement on Form S-8 of IDEX, et al., Registration No.
333-18643, as filed on December 23, 1996)
10.16** IDEX Corporation 1996 Deferred Compensation Plan for Non-Officer
Presidents (incorporated by reference to Exhibit No. 4.7 to the
Registration Statement on Form S-8 of IDEX, et al., Registrant
No. 333-18643, as filed on December 23, 1996)
10.17** Letter Agreement between IDEX Corporation and David T.
Windmuller, dated April 24, 2000 (incorporated by reference to
Exhibit No. 10.9 to the Quarterly Report of IDEX on Form 10-Q for
the quarter ended June 30, 2000, Commission File No. 1-10235)
10.18** Letter Agreement between IDEX Corporation and John L. McMurray,
dated April 24, 2000 (incorporated by reference to Exhibit No.
10.17(a) to the Annual Report of IDEX on Form 10-K for the year
ended December 31, 2001, Commission File No. 1-10235)
*12 Ratio of Earnings to Fixed Charges
*13 The portions of IDEX Corporation's 2002 Annual Report to
Shareholders which are specifically incorporated by reference.
*21 Subsidiaries of IDEX
*23 Consent of Deloitte & Touche LLP
*99.1 Certification pursuant to Section 1350 of Chapter 63 of Title 18
of the United States Code
*99.2 Certification pursuant to Section 1350 of Chapter 63 of Title 18
of the United States Code
- -------------
* Filed herewith
** Management contract or compensatory plan or agreement.
17