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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2003
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
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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
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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
Number of shares of common stock of IDEX Corporation outstanding as of July
31, 2003: 32,752,045 (net of treasury shares).
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IDEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
2003 2002
---------- --------------
(IN THOUSANDS EXCEPT SHARE AND
PER SHARE AMOUNTS)
ASSETS
Current assets
Cash and cash equivalents................................... $ 5,856 $ 6,952
Receivables -- net........................................ 118,443 101,494
Inventories............................................... 108,484 105,580
Other current assets...................................... 8,130 7,234
-------- --------
Total current assets................................. 240,913 221,260
Property, plant and equipment -- net........................ 144,538 148,246
Goodwill -- net............................................. 545,984 530,663
Intangible assets -- net.................................... 19,626 19,377
Other noncurrent assets..................................... 11,375 11,504
-------- --------
Total assets......................................... $962,436 $931,050
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable.................................... $ 60,525 $ 61,153
Dividends payable......................................... 4,575 4,548
Accrued expenses.......................................... 47,394 42,631
-------- --------
Total current liabilities............................ 112,494 108,332
Long-term debt.............................................. 222,671 241,051
Other noncurrent liabilities................................ 81,752 74,876
-------- --------
Total liabilities.................................... 416,917 424,259
-------- --------
Shareholders' equity
Common stock, par value $.01 per share
Shares issued and outstanding: 2003 -- 32,767,827;
2002 -- 32,536,166..................................... 328 325
Additional paid-in capital................................ 188,575 182,538
Retained earnings......................................... 352,144 331,635
Minimum pension liability adjustment...................... (10,571) (10,571)
Accumulated translation adjustment........................ 21,427 9,240
Treasury stock, at cost: 2003 -- 89,485;
2002 -- 59,350......................................... (2,903) (1,946)
Unearned compensation on restricted stock................. (3,481) (4,430)
-------- --------
Total shareholders' equity........................... 545,519 506,791
-------- --------
Total liabilities and shareholders' equity........... $962,436 $931,050
======== ========
See Notes to Consolidated Financial Statements.
1
IDEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Net sales.......................................... $207,147 $190,430 $402,645 $365,366
Cost of sales...................................... 125,024 116,292 246,219 225,803
-------- -------- -------- --------
Gross profit....................................... 82,123 74,138 156,426 139,563
Selling, general and administrative expenses....... 52,566 45,871 103,468 88,790
Restructuring charge............................... -- 107 -- 107
-------- -------- -------- --------
Operating income................................... 29,557 28,160 52,958 50,666
Other income -- net................................ 341 134 361 337
-------- -------- -------- --------
Income before interest expense and income taxes.... 29,898 28,294 53,319 51,003
Interest expense................................... 3,630 3,904 7,369 8,574
-------- -------- -------- --------
Income before income taxes......................... 26,268 24,390 45,950 42,429
Provision for income taxes......................... 9,325 8,780 16,312 15,274
-------- -------- -------- --------
Net income......................................... $ 16,943 $ 15,610 $ 29,638 $ 27,155
======== ======== ======== ========
Basic earnings per common share.................... $ .52 $ .49 $ .92 $ .87
======== ======== ======== ========
Diluted earnings per common share.................. $ .51 $ .48 $ .90 $ .85
======== ======== ======== ========
Share data:
Basic weighted average common shares outstanding... 32,384 31,668 32,337 31,090
======== ======== ======== ========
Diluted weighted average common shares
outstanding...................................... 33,131 32,653 32,946 32,074
======== ======== ======== ========
See Notes to Consolidated Financial Statements.
2
IDEX CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY
COMMON
STOCK & MINIMUM UNEARNED
ADDITIONAL PENSION ACCUMULATED COMPENSATION TOTAL
PAID-IN RETAINED LIABILITY TRANSLATION TREASURY ON RESTRICTED SHAREHOLDERS'
CAPITAL EARNINGS ADJUSTMENT ADJUSTMENT STOCK STOCK EQUITY
---------- -------- ---------- ----------- -------- ------------- -------------
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
Balance, December 31, 2002... $182,863 $331,635 $(10, 571) $ 9,240 $(1,946) $(4,430) $506,791
Net income................... 29,638 29,638
Other comprehensive income
Unrealized translation
adjustment............... 12,187 12,187
------- --------
Other comprehensive
income................. 12,187 12,187
-------- ------- --------
Comprehensive income..... 29,638 12,187 41,825
-------- ------- --------
Issuance of 231,661 shares of
common stock from exercise
of stock options and
deferred compensation
plans...................... 6,040 6,040
Amortization of restricted
stock...................... 949 949
Restricted shares surrendered
for tax withholdings....... (957) (957)
Cash dividends declared --
$.28 per common share
outstanding................ (9,129) (9,129)
-------- -------- --------- ------- ------- ------- --------
Balance, June 30, 2003....... $188,903 $352,144 $(10, 571) $21,427 $(2,903) $(3,481) $545,519
======== ======== ========= ======= ======= ======= ========
See Notes to Consolidated Financial Statements.
3
IDEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
SIX MONTHS
ENDED JUNE 30,
-------------------
2003 2002
-------- --------
(IN THOUSANDS)
Cash flows from operating activities
Net income.................................................. $ 29,638 $ 27,155
Adjustments to reconcile to net cash provided by operations:
Depreciation and amortization............................. 14,099 14,021
Amortization of intangibles............................... 319 378
Amortization of unearned compensation..................... 949 949
Amortization of debt issuance expenses.................... 290 290
Deferred income taxes..................................... 3,622 3,075
Changes in:
Receivables -- net..................................... (18,600) (12,011)
Inventories............................................ (4,156) 1,184
Trade accounts payable................................. 9,362 11,521
Accrued expenses....................................... 4,674 1,896
Other -- net.............................................. 6,855 3,372
-------- --------
Net cash flows from operating activities............... 47,052 51,830
Cash flows from investing activities
Additions to property, plant and equipment................ (8,407) (9,045)
Acquisition of businesses................................. (18,376) (5,538)
Other -- net.............................................. 3,194 3,768
-------- --------
Net cash flows from investing activities............... (23,589) (10,815)
Cash flows from financing activities
Borrowings under credit facilities for acquisitions....... 18,376 5,538
Net repayments under credit facilities.................... (32,624) (89,235)
Repayments of other long-term debt........................ (4,784) (487)
Proceeds from issuance of common stock.................... -- 50,935
Dividends paid............................................ (9,102) (8,635)
Proceeds from stock option exercises...................... 4,569 5,112
Other-net................................................. (994) (1,523)
-------- --------
Net cash flows from financing activities............... (24,559) (38,295)
-------- --------
Net (decrease) increase in cash............................. (1,096) 2,720
Cash and cash equivalents at beginning of year.............. 6,952 4,972
-------- --------
Cash and cash equivalents at end of period.................. $ 5,856 $ 7,692
======== ========
Supplemental cash flow information
Cash paid for:
Interest............................................... $ 7,116 $ 9,307
Income taxes........................................... 7,688 14,709
Significant non-cash activities:
Debt assumed upon acquisition of businesses............ -- 1,886
See Notes to Consolidated Financial Statements.
4
IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1. BUSINESS SEGMENTS
Information on IDEX's business segments is presented below, based on the
nature of products and services offered. IDEX evaluates performance based on
several factors, of which operating income is the primary financial measure.
Intersegment sales are accounted for at fair value as if the sales were to third
parties.
SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
Net sales
Pump Products:
External customers.................... $112,508 $109,296 $222,720 $210,778
Intersegment sales.................... 629 710 1,421 1,401
-------- -------- -------- --------
Total group sales................... 113,137 110,006 224,141 212,179
-------- -------- -------- --------
Dispensing Equipment:
External customers.................... 47,483 38,958 86,765 72,048
Intersegment sales.................... 1 -- 1 --
-------- -------- -------- --------
Total group sales................... 47,484 38,958 86,766 72,048
-------- -------- -------- --------
Other Engineered Products:
External customers.................... 47,156 42,176 93,160 82,540
Intersegment sales.................... 2 1 2 1
-------- -------- -------- --------
Total group sales................... 47,158 42,177 93,162 82,541
-------- -------- -------- --------
Intersegment elimination................. (632) (711) (1,424) (1,402)
-------- -------- -------- --------
Total net sales..................... $207,147 $190,430 $402,645 $365,366
======== ======== ======== ========
Operating income
Pump Products............................ $ 16,112 $ 18,461 $ 31,787 $ 34,879
Dispensing Equipment..................... 9,857 7,617 14,709 11,756
Other Engineered Products................ 8,771 6,596 15,921 12,251
Corporate office and other............... (5,183) (4,514) (9,459) (8,220)
-------- -------- -------- --------
Total operating income.............. $ 29,557 $ 28,160 $ 52,958 $ 50,666
======== ======== ======== ========
A restructuring charge of $107 (net of reversal amount of $1,221) in 2002
is included within Corporate office and other and was not assigned to the
individual group segments. Had the Company allocated the 2002 restructuring
charge, the charge would have been assigned to the groups as follows: Pump
Products (income of $736), Dispensing Equipment (expense of $121) and Other
Engineered Products (expense of $722).
2. ACQUISITIONS
On June 2, 2003, IDEX acquired Sponsler Co., Inc. based in Westminster,
South Carolina. Sponsler, with sales of approximately $6 million, is a
manufacturer of a complete line of precision turbine flowmeters to meet all flow
applications, including low-flow and situations where viscosity, corrosive
media, extreme temperature or hazardous materials are factors. It operates as
part of Liquid Controls. The Company does not consider this acquisition to be
material to its financial position, liquidity or results of operations.
5
IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
3. RESTRUCTURING CHARGE
IDEX took actions in 2001 and 2002 to downsize operations to lower its cost
structure. These steps were necessary to appropriately size the Company's
production capacity and administrative support levels to match the lower levels
of demand for a broad range of products. A rollforward of the remaining
restructuring accrual related to the restructuring plans from January 1, 2003 to
June 30, 2003 is included below:
EMPLOYEE IDLE FACILITY
TERMINATION COSTS AND
COSTS OTHER TOTAL
----------- ------------- -----
Balance January 1, 2003................................ $394 $ 86 $480
Payments............................................... (16) (26) (42)
---- ---- ----
Balance June 30, 2003.................................. $378 $ 60 $438
==== ==== ====
4. EARNINGS PER COMMON SHARE
Earnings per common share (EPS) are computed by dividing net income by the
weighted average number of shares of common stock (basic) plus common stock
equivalents outstanding (diluted) during the period. Common stock equivalents
consist of stock options, which have been included in the calculation of
weighted average shares outstanding using the treasury stock method, unvested
restricted shares, and shares issuable in connection with certain deferred
compensation agreements (DCUs). Basic weighted average shares reconciles to
diluted weighted average shares as follows:
SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
--------------- ---------------
2003 2002 2003 2002
------ ------ ------ ------
Basic weighted average common shares outstanding... 32,384 31,668 32,337 31,090
Dilutive effect of stock options, unvested
restricted shares, and DCUs...................... 747 985 609 984
------ ------ ------ ------
Diluted weighted average common shares
outstanding...................................... 33,131 32,653 32,946 32,074
====== ====== ====== ======
5. INVENTORIES
The components of inventories as of June 30, 2003 and December 31, 2002
were:
JUNE 30, DECEMBER 31,
2003 2002
-------- ------------
Raw materials............................................... $ 41,939 $ 41,985
Work-in-process............................................. 13,623 11,960
Finished goods.............................................. 52,922 51,635
-------- --------
Total.................................................. $108,484 $105,580
======== ========
Those inventories which were carried on a LIFO basis amounted to $94,703
and $91,743 at June 30, 2003 and December 31, 2002, respectively. The impact on
earnings of using the LIFO method is not material.
6. COMMON AND PREFERRED STOCK
The Company had five million shares of preferred stock authorized but
unissued at June 30, 2003, and December 31, 2002.
6
IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
7. STOCK OPTIONS
The Company has stock option plans for outside directors, executives and
certain key employees. These options are accounted for using the intrinsic value
method and, accordingly, no compensation cost has been recognized. Had
compensation cost been determined using the fair value method, the Company's pro
forma net income and earnings per share would have been as follows:
SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
----------------- -----------------
2003 2002 2003 2002
------- ------- ------- -------
Net income
As reported.................................. $16,943 $15,610 $29,638 $27,155
======= ======= ======= =======
Pro forma.................................... $15,746 $14,477 $27,249 $25,095
======= ======= ======= =======
Basic EPS
As reported.................................. $ .52 $ .49 $ .92 $ .87
======= ======= ======= =======
Pro forma.................................... $ .49 $ .46 $ .84 $ .81
======= ======= ======= =======
Diluted EPS
As reported.................................. $ .51 $ .48 $ .90 $ .85
======= ======= ======= =======
Pro forma.................................... $ .48 $ .44 $ .83 $ .78
======= ======= ======= =======
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
HISTORICAL OVERVIEW AND OUTLOOK
We sell a broad range of pump products, dispensing equipment and other
engineered products to a diverse customer base in the United States and other
countries around the world. Accordingly, our businesses are affected by levels
of industrial activity and economic conditions in the U.S. and in other
countries where our products are sold, and by the relationship of the U.S.
dollar to other currencies. Among the factors that influence the demand for our
products are interest rates, levels of capacity utilization and capital spending
in certain industries and overall industrial activity.
We have a history of achieving above-average operating margins. Our
operating margins have exceeded the average for the companies that comprise the
Value Line Corporate Index (VLCI) every year since 1988. IDEX views the VLCI
operating performance statistics as a proxy for an average industrial company.
Our operating margins are influenced by, among other things, utilization of
facilities as sales volumes change and inclusion of newly acquired businesses.
The operating margins of newly acquired businesses typically have been lower
than the average of our base businesses and, prior to 2002, those margins were
further reduced by amortization of goodwill and trademark assets. In accordance
with new accounting rules, we discontinued amortizing intangible assets with
indefinite lives as of January 1, 2002. Instead, these intangible assets are
reviewed periodically for impairment.
For the three and six month periods ended June 30, 2003, we reported higher
orders, sales, operating income, net income and diluted earnings per share as
compared with the same periods of last year.
The following forward-looking statements are qualified by the cautionary
statement under the Private Securities Litigation Reform Act set forth below.
The latest three months represented the third consecutive quarter of
year-over-year organic growth in the business. This has not occurred since the
third quarter of 2000. We are pleased with the strength of our Dispensing
Equipment and Other Engineered Products groups. A
7
IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
significant part of this growth is due to new products that have been recently
introduced across the Company. The improved performance demonstrates the success
of our efforts to drive organic growth, in combination with the great diversity
of products and a broad and expanding global presence. While the second quarter
showed nice improvement sequentially and year-over-year, as a short-cycle
business our financial performance depends on the current pace of incoming
orders, and we have very limited visibility of future business conditions.
However, we believe IDEX is well positioned for earnings improvement as the
economy strengthens. This is based on our lower cost structure resulting from
restructuring actions; our operational excellence initiatives of Kaizen and Lean
Manufacturing, Six Sigma, global sourcing and eBusiness; and using our strong
cash flow to cut debt and interest expense. In addition, we continue to pursue
acquisitions to drive the Company's longer term profitable growth.
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
The "Historical Overview and Outlook" and the "Liquidity and Capital
Resources" sections of this management's discussion and analysis of our
operations contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act
of 1934, as amended. These statements may relate to, among other things, capital
expenditures, cost reductions, cash flow, and operating improvements and are
indicated by words or phrases such as "anticipate," "estimate," "plans,"
"expects," "projects," "should," "will," "management believes," "the Company
believes," "we believe," "the Company intends" and similar words or phrases.
These statements are subject to inherent uncertainties and risks that could
cause actual results to differ materially from those anticipated at the date of
this filing. The risks and uncertainties include, but are not limited to, the
following: economic and political consequences resulting from terrorist attacks
and wars; levels of industrial activity and economic conditions in the U.S. and
other countries around the world, pricing pressures and other competitive
factors, and levels of capital spending in certain industries -- all of which
could have a material impact on our order rates and results, particularly in
light of the low levels of order backlogs we typically maintain; our ability to
make acquisitions and to integrate and operate acquired businesses on a
profitable basis; the relationship of the U.S. dollar to other currencies and
its impact on pricing and cost competitiveness; political and economic
conditions in foreign countries in which we operate; interest rates; capacity
utilization and the effect this has on costs; labor markets; market conditions
and material costs; and developments with respect to contingencies, such as
litigation and environmental matters. The forward-looking statements included
here are only made as of the date of this report, and we undertake no obligation
to publicly update them to reflect subsequent events or circumstances. Investors
are cautioned not to rely unduly on forward-looking statements when evaluating
the information presented here.
RESULTS OF OPERATIONS
For purposes of this discussion and analysis section, reference is made to
the table on the following page and the Company's Statements of Consolidated
Operations included in the Financial Statements section. IDEX consists of three
reporting groups: Pump Products, Dispensing Equipment and Other Engineered
Products.
PERFORMANCE IN THE THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THE SAME PERIOD
OF 2002
For the three months ended June 30, 2003, orders, sales and profits were
higher than the comparable second quarter of last year. New orders for the
latest three months totaled $204.2 million, 8% higher than the same period last
year. Excluding the impact of foreign currency, the sales reduction associated
with an immaterial product line sold earlier this year, and the Halox (April
2002), Rheodyne (July 2002), Wrightech (October 2002) and Sponsler (June 2003)
acquisitions, orders were virtually unchanged compared with the second quarter
of 2002.
8
IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Sales in the second quarter were $207.1 million, a 9% improvement from last
year's second quarter as acquisitions net of the product line sold combined for
a 2% sales improvement, foreign currency translation provided a 5% increase and
base business shipments were up 2%. Domestic sales in the quarter were 3% lower
while international sales -- net of foreign currency translation -- rose 12% as
all three groups experienced global growth. Sales to international customers,
including the impact of currency translation, were 48% of the total, up from 42%
last year.
For the quarter, the Pump Products Group contributed 54% of sales and 47%
of operating income, the Dispensing Equipment Group accounted for 23% of sales
and 28% of operating income, and the Other Engineered Products Group represented
23% of sales and 25% of operating income.
Pump Products Group sales of $113.1 million for the three months ended June
30, 2003, were $3.1 million, or 3%, higher than the prior year mainly due to the
acquisition of Rheodyne. Compared with the second quarter last year,
acquisitions accounted for a 6% sales improvement and foreign currency
translation added 2% while base business shipments were down 5% as demand in the
chemical processing and industrial end-markets remained soft. In the second
quarter of 2003, domestic sales decreased by 4% while international sales
increased by 16%. Excluding acquisitions and foreign currency translation, U.S.
sales volume decreased by 10% while international sales increased 3%. Sales to
customers outside the U.S., including the impact of currency translation,
increased to 40% of total group sales in the 2003 period from 35% in 2002.
Dispensing Equipment Group sales of $47.5 million increased $8.5 million,
or 22%, in the second quarter of 2003 compared with last year's second quarter.
This increase was attributed to favorable foreign currency translation of 18%
and a 4% increase in base business volume as demand for color formulation
equipment in Europe strengthened. In the second quarter of 2003, domestic sales
decreased by 9% and international sales increased by 49%. Excluding the
favorable foreign currency translation effect, international sales volume
increased by 17%. Sales to customers outside the U.S., including the impact of
currency translation, were 69% of total group sales in the 2003 quarter,
compared with 58% in 2002.
Other Engineered Products Group sales of $47.2 million increased by $5.0
million, or 12%, in the second quarter of 2003 compared with 2002, as base
business volume was up 18%, particularly for fire and rescue products, and
foreign currency added another 2% while the impact of the sale of the product
line reduced sales by 8%. In the second quarter of 2003, domestic sales
increased by 8%, while international sales increased by 17%. Excluding foreign
currency and the impact of the sale of the product line, international sales
increased 37% from the comparable period of last year. Sales to customers
outside the U.S., including the impact of currency translation, were 44% of
total group sales in 2003, up from 42% in 2002.
9
IDEX CORPORATION AND SUBSIDIARIES
COMPANY AND BUSINESS GROUP FINANCIAL INFORMATION
SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------- -------------------
2003(1) 2002(1) 2003(1) 2002(1)
-------- -------- -------- --------
(IN THOUSANDS)
Pump Products Group
Net sales........................................ $113,137 $110,006 $224,141 $212,179
Operating income(2).............................. 16,112 18,461 31,787 34,879
Operating margin................................. 14.2% 16.8% 14.2% 16.4%
Depreciation and amortization.................... $ 4,059 $ 4,351 $ 8,491 $ 8,648
Capital expenditures............................. 2,948 2,325 5,287 4,270
Dispensing Equipment Group
Net sales........................................ $ 47,484 $ 38,958 $ 86,766 $ 72,048
Operating income(2).............................. 9,857 7,617 14,709 11,756
Operating margin................................. 20.8% 19.6% 17.0% 16.3%
Depreciation and amortization.................... $ 1,495 $ 1,420 $ 3,069 $ 3,015
Capital expenditures............................. 659 861 1,073 1,777
Other Engineered Products Group
Net sales........................................ $ 47,158 $ 42,177 $ 93,162 $ 82,541
Operating income(2).............................. 8,771 6,596 15,921 12,251
Operating margin................................. 18.6% 15.6% 17.1% 14.8%
Depreciation and amortization.................... $ 1,300 $ 1,322 $ 2,600 $ 2,587
Capital expenditures............................. 927 1,370 1,935 2,830
Company
Net sales........................................ $207,147 $190,430 $402,645 $365,366
Operating income(2).............................. 29,557 28,160 52,958 50,666
Operating margin................................. 14.3% 14.8% 13.2% 13.9%
Depreciation and amortization(3)................. $ 7,456 $ 7,643 $ 15,367 $ 15,348
Capital expenditures............................. 4,615 4,660 8,407 9,045
- ---------------
(1) Includes acquisition of Halox Technologies, Inc. (April 2002), Rheodyne,
L.P. (July 2002), Wrightech Corporation (October 2002) and Sponsler Co.,
Inc. (June 2003) in the Pump Products Group from the dates of acquisition.
(2) Group operating income excludes unallocated corporate operating expenses in
both years and the restructuring activity discussed below in 2002. IDEX took
actions in 2002 to downsize operations to lower its cost structure. In June
2002, IDEX reversed $1.2 million of certain accrued restructuring expenses
initially recorded in 2001. The reversal primarily resulted from higher than
anticipated proceeds on asset sales. The restructuring charge of $107 (net
of the reversal amount of $1.2 million) was included with corporate and
other in 2002 and was not assigned to the individual group segments. Had the
company allocated the 2002 restructuring charge, it would have been assigned
to the groups as follows: Pump Products (income of $736), Dispensing
Equipment (expense of $121) and Other Engineered Products (expense of $722).
(3) Excludes amortization of debt issuance expenses.
10
Gross profit of $82.1 million in the second quarter of 2003 increased by
$8.0 million, or 11%, from 2002. Gross profit as a percent of sales was 39.6% in
2003 and increased from 38.9% in 2002. The improved gross margins primarily
reflected increased sales volume, lower material costs from our global sourcing
activities, and savings from Lean, Kaizen and Six Sigma initiatives.
Operating income increased by $1.4 million, or 5%, to $29.6 million in 2003
from $28.2 million in 2002, primarily reflecting the higher gross margins
discussed above partially offset by increased selling, general and
administrative expenses (SG&A). Second quarter operating margins were 14.3% of
sales, .5 of a percentage point lower than at this time last year. The decline
from last year resulted from continuing weakness in Pump Products due to soft
demand, particularly in traditional U.S. industrial markets, and an increase in
total Company SG&A, which was partially offset by the .7% improvement in gross
margins. In the Pump Products Group, operating income of $16.1 million and
operating margins of 14.2% in 2003 were down from the $18.5 million and 16.8%
recorded in 2002. Operating income for the Dispensing Equipment Group of $9.9
million and operating margins of 20.8% in 2003 were up from the $7.6 million and
19.6% in 2002. Operating income in the Other Engineered Products Group of $8.8
million and operating margins of 18.6% in 2003 increased from $6.6 million and
15.6% achieved in 2002.
SG&A increased to $52.6 million in 2003 from $45.9 million in 2002, and as
a percent of sales was 25.4%, up from 24.1% in 2002. The increase in SG&A
expenses reflected the cumulative impact of acquisitions made in 2003 and 2002,
deliberate reinvestment in the businesses to drive organic growth, and cost
increases including pension, insurance, audit and legal expenses.
Interest expense decreased to $3.6 million in the second quarter of 2003
from $3.9 million in 2002. This reduction was principally attributable to
significantly lower debt levels this year due to debt paydowns from operating
cash flow and proceeds from the April 2002 issuance of common stock as well as a
lower interest rate environment.
The provision for income taxes increased slightly to $9.3 million in 2003
from $8.8 million in 2002. The effective tax rate decreased to 35.5% in 2003
from 36.0% in 2002.
Net income for the current quarter was $16.9 million, 9% higher than the
$15.6 million earned in the second quarter of 2002. Diluted earnings per share
in the second quarter of 2003 of $.51 increased $.03 compared with the second
quarter of 2002.
PERFORMANCE IN THE SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO THE SAME PERIOD OF
2002
Orders, sales and profits were higher for the first six months of 2003
compared with the same period last year. New orders for the first nine months of
2003 totaled $410.3 million, 10% higher than the same period last year.
Excluding the impact of foreign currency, the immaterial product line sold, and
acquisitions made since the beginning of 2002, orders were 2% higher than in the
first half of 2002.
Sales in the first six months increased 10% to $402.6 million from $365.4
million a year ago. Acquisitions less the sales impact of the product line sold
accounted for a 3% improvement, foreign currency translation added 5% and base
business rose 2%. Domestic sales were unchanged, while international
sales -- net of foreign currency translation -- were 12% higher. Sales to
international customers, including the impact of currency translation, were 46%
of the total, up from 41% last year.
In the first half of 2003, the Pump Products Group contributed 56% of sales
and 51% of operating income, the Dispensing Equipment Group accounted for 21% of
sales and 24% of operating income, and the Other Engineered Products Group
represented 23% of sales and 25% of operating income.
Pump Products Group sales of $224.1 million increased $12.0 million, or 6%,
for the six months ended June 30, 2003 compared with 2002. Acquisitions
accounted for a 6% sales improvement and foreign currency added 3% but this was
offset by a 3% decline in base business sales. In the first six months of 2003,
domestic sales decreased by 2% while international sales increased by 19%.
Excluding acquisitions and foreign currency translation, U.S. sales volume
decreased by 7% while international sales increased 6%. Sales to customers
outside the U.S., including the impact of currency translation, increased to 39%
of total group sales in the 2003 period from 35% in 2002.
11
Dispensing Equipment Group sales of $86.8 million increased $14.7 million,
or 20%, in the first half of 2003 compared with the same period last year. This
increase was attributed to favorable foreign currency translation of 15% and a
5% increase in base business volume as demand in European markets has remained
strong for color formulation equipment. Domestic sales decreased by 3% and
international sales increased by 38%. Excluding the favorable foreign currency
translation effect, international sales volume increased by 11%. Sales to
customers outside the U.S., including the impact of currency translation, were
65% of total group sales in the 2003 period, compared with 56% in 2002.
Other Engineered Products Group sales of $93.2 million increased by $10.6
million, or 13%, in the first half of 2003 compared with 2002 and reflected a
14% increase in base business volume, particularly for fire and rescue products,
and a 4% improvement from foreign currency translation which was partially
offset by a 5% decline related to the product line sale. In the first six months
of 2003, domestic sales increased by 7%, while international sales increased by
21%. Excluding foreign currency and the impact of the sale of the product line,
international sales increased 26% from the comparable period of last year. Sales
to customers outside the U.S., including the impact of currency translation,
were 45% of total group sales in 2003, up from 42% in 2002.
Gross profit of $156.4 million in the first six months of 2003 increased by
$16.9 million, or 12%, from 2002. Gross profit as a percent of sales was 38.8%
in 2003 and increased from 38.2% in 2002. The improved gross margins primarily
reflected increased sales volume, lower material costs from our global sourcing
activities, and Lean, Kaizen and Six Sigma initiatives.
Operating income increased by $2.3 million, or 5%, to $53.0 million in 2003
from $50.7 million in 2002, primarily reflecting the higher gross margins
discussed above partially offset by increased selling, general and
administrative expenses. Operating margins for the first half of 2003 were 13.2%
compared with 13.9% in the prior year period. The margin decrease from last year
was primarily due to an unfavorable mix of sales (away from higher margin pump
sales) and an increase in SG&A, partially offset by the improvement in gross
margins. In the Pump Products Group, operating income of $31.8 million and
operating margins of 14.2% in 2003 were down from the $34.9 million and 16.4%
recorded in 2002. Operating income for the Dispensing Equipment Group of $14.7
million and operating margins of 17.0% in 2003 were up from the $11.8 million
and 16.3% in 2002. Operating income in the Other Engineered Products Group of
$15.9 million and operating margins of 17.1% in 2003 increased from $12.3
million and 14.8% achieved in 2002.
SG&A increased to $103.5 million in 2003 from $88.8 million in 2002, and as
a percent of sales was 25.7%, up from 24.3% in 2002. The increase in SG&A
expenses reflected the cumulative impact of acquisitions made in 2003 and 2002,
deliberate reinvestment in the businesses to drive organic growth, and cost
increases including pension, insurance, audit and legal expenses.
Interest expense decreased to $7.4 million in the first six months of 2003
from $8.6 million in 2002. This reduction was principally attributable to
significantly lower debt levels this year due to debt paydowns from operating
cash flow and proceeds from the April 2002 issuance of common stock as well as a
lower interest rate environment.
The provision for income taxes increased to $16.3 million in 2003 from
$15.3 million in 2002. The effective tax rate decreased to 35.5% in 2003 from
36.0% in 2002.
Net income for the first six months of 2003 was $29.6 million, 9% higher
than the $27.2 million earned in the same period of 2002. Diluted earnings per
share in the first half of 2003 of $.90 increased $.05 compared with the same
period last year.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2003, working capital was $128.4 million and our current ratio
was 2.1 to 1. Cash flows from operating activities decreased $4.8 million, or
9%, to $47.0 million in 2003 mainly due to less favorable working capital
changes from last year. This was primarily caused by the 10% rise in sales
volume in the first half of the year with a higher proportion of international
sales, which generally have longer payment terms.
12
Cash flow provided from operations was more than adequate to fund capital
expenditures of $8.4 million and $9.0 million in the first six months of 2003
and 2002, respectively. Capital expenditures were generally for machinery and
equipment that improved productivity and tooling to support IDEX's global
sourcing initiatives; although a portion was for business system technology and
repair and replacement of equipment and facilities. Management believes that
IDEX has ample capacity in its plant and equipment to meet expected needs for
future growth in the intermediate term.
In February 2003, an $8.0 million payment of deferred consideration was
made in respect of the Rheodyne acquisition, which was consummated in July 2002.
The Company also completed the acquisition of Sponsler in June 2003 for a cost
of $10.4 million. These payments were financed under the Company's credit
facility.
At June 30, 2003, the maximum amount available under our multi-currency
bank revolving credit facility (Credit Facility) was $300.0 million, of which
$43.2 million was borrowed. The Credit Facility contains a covenant that limits
total debt outstanding to three times operating cash flow, as defined in the
agreement. Our total debt outstanding was $222.7 million at June 30, 2003, and
based on the covenant was limited to $401.4 million of total debt outstanding.
Interest is payable quarterly on the outstanding balance at the agent bank's
reference rate or at LIBOR plus an applicable margin and a utilization fee if
the total borrowings exceed certain levels. The applicable margin is based on
the credit rating of our 6.875% senior notes due February 15, 2008, and can
range from 25 basis points to 100 basis points. The utilization fee can range
from zero to 25 basis points. On March 27, 2003, Standard & Poor's upgraded its
corporate credit and senior unsecured debt ratings on IDEX to BBB from BBB-. As
a result of this change, at June 30, 2003, the applicable margin was 57.5 basis
points and the utilization fee was zero. We also pay an annual fee of 17.5 basis
points on the total Credit Facility.
In December 2001, we, and certain of our subsidiaries, entered into a
one-year agreement with a financial institution, under which we collateralized
certain receivables for borrowings (Receivables Facility). This agreement was
renewed in December 2002 for another year. The Receivables Facility provides for
borrowings of up to $50.0 million, depending upon the level of eligible
receivables. At June 30, 2003, $20.0 million was borrowed and included in
long-term debt at an interest rate of approximately 2.7% per annum.
We also have a $30.0 million demand line of credit (Short-Term Facility),
which expires May 24, 2004. Borrowings under the Short-Term Facility are at
LIBOR plus the applicable margin in effect under the Credit Facility. At June
30, 2003, no borrowings were outstanding under this facility.
We believe the Company will generate sufficient cash flow from operations
for the next twelve months and in the long term to meet its operating
requirements, interest on all borrowings, any authorized share repurchases,
restructuring expenses, planned capital expenditures, and annual dividend
payments to holders of common stock. Since we began operations in January 1988
and through June 30, 2003, we have borrowed approximately $902 million under our
various credit agreements to complete 23 acquisitions. During this same period
we generated, principally from operations, cash flow of $844 million to reduce
indebtedness. In the event that suitable businesses are available for
acquisition upon terms acceptable to the Board of Directors, we may obtain all
or a portion of the financing for the acquisitions through the incurrence of
additional long-term debt.
Our contractual obligations and commercial commitments include rental
payments under operating leases, payments under capital leases, and other
long-term obligations arising in the ordinary course of business. We have no
off-balance sheet arrangements or material long-term purchase obligations. There
are no identifiable events or uncertainties, including the lowering of our
credit rating, that would accelerate payment or maturity of any of these
commitments or obligations.
CRITICAL ACCOUNTING ESTIMATES
We believe that the application of the following accounting policies, which
are important to our financial position and results of operations, requires
significant judgments and estimates on the part of management.
13
For a summary of all of our accounting policies, including the accounting
policies discussed below, see Note 1 of the Notes to the Consolidated Financial
Statements in our 2002 Annual Report on Form 10-K.
Noncurrent assets The Company evaluates the recoverability of certain
noncurrent assets utilizing various estimation processes. In particular, the
recoverability of June 30, 2003 balances for goodwill and intangible assets of
$546.0 million and $19.6 million, respectively, are subject to estimation
processes, which depend on the accuracy of underlying assumptions, including
future operating results. The Company evaluates the recoverability of each of
these assets based on estimated business values and estimated future cash flows
(derived from estimated earnings and cash flow multiples). The recoverability of
these assets depends on the reasonableness of these assumptions and how they
compare with the eventual operating performance of the specific businesses to
which the assets are attributed. To the extent actual business values or cash
flows differ from those estimated amounts, the recoverability of these
noncurrent assets could be affected.
Income taxes Deferred taxes are recognized for the future tax effects of
temporary differences between financial and income tax reporting using tax rates
in effect for the years in which the differences are expected to reverse.
Federal income taxes are provided on that portion of the income of foreign
subsidiaries that is expected to be remitted to the United States and be
taxable. The management of the Company, along with third-party advisors,
periodically estimates the Company's probable tax obligations using historical
experience in tax jurisdictions and informed judgments.
Contingencies and litigation We are currently involved in certain legal
and regulatory proceedings and, as required and where it is reasonably possible
to do so, have accrued our estimates of the probable costs for the resolution of
these matters. These estimates have been developed in consultation with outside
counsel and are based upon an analysis of potential results, assuming a
combination of litigation and settlement strategies. It is possible, however,
that future operating results for any particular quarterly or annual period
could be materially affected by changes in our assumptions or the effectiveness
of our strategies related to these proceedings.
Defined benefit retirement plans The plan obligations and related assets
of defined benefit retirement plans are presented in Note 14 of the Notes to the
Consolidated Financial Statements in the 2002 Annual Report on Form 10-K. Plan
assets, which consist primarily of marketable equity and debt instruments, are
valued using market quotations. Plan obligations and the annual pension expense
are determined by consulting actuaries using a number of assumptions. Key
assumptions in measuring the plan obligations include the discount rate at which
the obligation could be effectively settled and the anticipated rate of future
salary increases. Key assumptions in the determination of the annual pension
expense include the discount rate, the rate of salary increases and the
estimated future return on plan assets. To the extent actual amounts differ from
these assumptions and estimated amounts, results could be adversely affected.
REGISTRATION STATEMENT FILINGS FOR COMMON STOCK OFFERINGS
In March 2002, we filed a registration statement on Form S-3 with the
Securities and Exchange Commission covering the secondary offering of 2,939,199
shares of common stock owned by IDEX Associates, L.P. In April 2002, that
registration statement was amended to also include the secondary offering of
560,801 shares of IDEX common stock owned by KKR Associates, L.P., and the
primary offering of 1,500,000 shares of IDEX common stock. Also in April 2002,
we announced the pricing of this public offering at $36 per common share.
Subsequently, the overallotment option was exercised by the underwriter for the
sale of an additional 750,000 secondary shares owned by KKR Associates, L.P.,
bringing the total offering to 5,750,000 shares. The $50.8 million of net
proceeds we received was used to repay debt under the Credit Facility. This
increased the amount available for borrowing under the facility, which we will
continue to use for general corporate purposes, including acquisitions.
In September 2002, we filed a registration statement on Form S-3 with the
Securities and Exchange Commission covering the secondary offering of 1,350,000
shares of IDEX common stock owned by KKR Associates, L.P. This offering,
completed in January 2003, did not increase the number of IDEX shares
outstanding, and the Company did not receive any proceeds from the offering.
14
The secondary shares covered by both of these registration statements had
been owned by KKR Associates, L.P. and IDEX Associates, L.P. since IDEX was
formed in January 1988.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are subject to market risk associated with changes in interest rates and
foreign currency exchange rates. Interest rate exposure is limited to the $222.7
million of total debt outstanding at June 30, 2003. Approximately 31% of the
debt is priced at interest rates that float with the market. A 50 basis point
movement in the interest rate on the floating rate debt would result in an
approximate $.3 million annualized increase or decrease in interest expense and
cash flows. The remaining debt is fixed rate debt. We will, from time to time,
enter into interest rate swaps on our debt when we believe there is a financial
advantage for doing so. A treasury risk management policy, adopted by the Board
of Directors, describes the procedures and controls over derivative financial
and commodity instruments, including interest rate swaps. Under the policy, we
do not use derivative financial or commodity instruments for trading purposes,
and the use of these instruments is subject to strict approvals by senior
officers. Typically, the use of derivative instruments is limited to interest
rate swaps on the Company's outstanding long-term debt.
Our foreign currency exchange rate risk is limited principally to the euro
and British pound. We manage our foreign exchange risk principally through
invoicing our customers in the same currency as the source of our products.
ITEM 4. CONTROLS AND PROCEDURES.
The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Company's Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
is required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.
As required by SEC Rule 13a-15(b), the Company carried out an evaluation,
under the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and the Company's Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the quarter
covered by this report. Based on the foregoing, the Company's Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures were effective at the reasonable assurance level.
There has been no change in the Company's internal controls over financial
reporting during the Company's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
IDEX and nine 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
15
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, Connecticut, Georgia, Illinois,
Louisiana, Michigan, Mississippi, New Jersey, New York, Ohio, Pennsylvania,
Texas 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 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
The exhibits listed in the accompanying "Exhibit Index" are filed as
part of this report.
(b) Reports on Form 8-K:
A report under Item 9 dated April 16, 2003
16
SIGNATURES
Pursuant to the requirements 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
/s/ WAYNE P. SAYATOVIC
--------------------------------------
Wayne P. Sayatovic
Senior Vice President -- Finance and
Chief Financial Officer
August 11, 2003
17
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% Senior Notes
of IDEX Corporation 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
(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 (incorporated by reference to Exhibit 4.6
to the Annual Report of IDEX on Form 10-K for the year ended
December 31, 2001, Commission File No. 1-10235)
*4.6 (a) Amendment No. 2 dated as of May 24, 2003 to the Credit
Lyonnais Uncommitted Line of Credit Agreement dated December
3, 2001 (incorporated by reference to Exhibit 4.6 (a) to the
Annual Report of IDEX on Form 10-K for the year ended
December 31, 2002, Commission File No. 1-10235)
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 (incorporated by reference to Exhibit 4.7 to the
Annual Report of IDEX on Form 10-K for the year ended
December 31, 2001, Commission File No. 1-10235)
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 (incorporated by reference to Exhibit 4.7
(a) to the Annual Report of IDEX on Form 10-K for the year
ended December 31, 2002, Commission File No. 1-10235)
10.1 Third Amended and Restated 1996 Stock Option Plan for
Non-Officer Key Employees of IDEX Corporation dated January
9, 2003 (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-8 of IDEX, Registration No.
333-104768, as filed on April 25, 2003)
10.2** Revised and Restated IDEX Management Incentive Compensation
Plan for key employees effective January 1, 2003
18
EXHIBIT
NUMBER DESCRIPTION
------- -----------
*31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a) or Rule 15d-14(a)
*31.2 Certification of Chief Financial Officer Pursuant to Rule
13a-14(a) or Rule 15d-14(a)
*32.1 Certification pursuant to Section 1350 of Chapter 63 of
Title 18 of the United States Code
*32.2 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
19