GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

IDEX Corp. Reports Operating Results (10-Q)

November 04, 2010 | About:
The Daily Reckoning

10qk

18 followers
IDEX Corp. (IEX) filed Quarterly Report for the period ended 2010-09-30.

Idex Corp. has a market cap of $2.99 billion; its shares were traded at around $37.04 with a P/E ratio of 19.4 and P/S ratio of 2.2. The dividend yield of Idex Corp. stocks is 1.7%. Idex Corp. had an annual average earning growth of 8.1% over the past 10 years.IEX is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, First Pacific Advisors of First Pacific Advisors, LLC, Mario Gabelli of GAMCO Investors, Chuck Royce of Royce& Associates, John Keeley of Keeley Fund Management, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.

Highlight of Business Operations:

Selling, general and administrative (SG&A) expenses increased to $88.2 million in the third quarter of 2010 from $79.8 million in 2009. The $8.4 million increase reflects approximately $4.9 million for volume related expenses and $3.5 million for incremental costs associated with the acquisitions of Seals in April 2010 and OBL in July 2010. As a percent of sales, SG&A expenses were 23.6% for 2010 and 24.7% for 2009.

Operating income of $62.4 million and operating margins of 16.7% in the third quarter of 2010 were up from the $46.5 million and 14.4% recorded in 2009, primarily reflecting an increase in volume and cost reductions due to our restructuring initiatives. In the Fluid & Metering Technologies Segment, operating income of $31.6 million and operating margins of 17.8% in the third quarter of 2010 were up from the $25.8 million and 16.4% recorded in 2009, principally due to higher sales and cost reduction initiatives. In the Health & Science Technologies Segment, operating income of $21.7 million and operating margins of 20.8% in the third quarter of 2010 were up from the $14.3 million and 18.8% recorded in 2009 due to higher volume and cost reduction initiatives. In the Dispensing Equipment Segment, operating income of $2.7 million and operating margins of 10.2% in the third quarter of 2010 were up from the $0.3 million of operating loss and (1.2)% recorded in 2009 due to volume, cost reduction initiatives and improved productivity. Operating income and operating margins in the Fire & Safety/Diversified Products Segment of $17.0 million and 25.4%, respectively, were higher than the $15.9 million and 24.3% recorded in 2009 due to higher sales and favorable mix.

SG&A expenses increased to $267.0 million in the first nine months of 2010 from $242.7 million in 2009. The $24.3 million increase reflects approximately $18.8 million for volume related expenses and $5.5 million for incremental costs associated with the acquisitions of Seals in April 2010 and OBL in July 2010. As a percent of sales, SG&A expenses were 24.1% for 2010 and 24.6% for 2009.

Operating income of $183.1 million and operating margins of 16.5% in the first nine months of 2010 were up from the $132.4 million and 13.4% recorded in 2009, primarily reflecting an increase in volume and cost reductions due to our restructuring initiatives. In the Fluid & Metering Technologies Segment, operating income of $93.9 million and operating margins of 17.9% in the first nine months of 2010 were up from the $70.7 million and 15.0% recorded in 2009 principally due to higher sales and cost reduction initiatives. In the Health & Science Technologies Segment, operating income of $60.6 million and operating margins of 20.7% in the first nine months of 2010 were up from the $34.7 million and 15.5% recorded in 2009 due to higher volume and cost reduction initiatives. In the Dispensing Equipment Segment, operating income of $19.1 million and operating margins of 18.8% in the first nine months of 2010 were up from the $13.1 million and 12.6% recorded in 2009, due to cost reduction initiatives and improved productivity. Operating income and operating margin in the Fire & Safety/Diversified Products Segment of $44.0 million and 22.7% were up from the $42.8 million and 22.2% recorded in 2009 due to higher sales and favorable mix.

The Company acquired Seals in April 2010 for cash consideration of $51.3 million and the assumption of approximately $2.7 million in debt related items, OBL in July 2010 for cash consideration of $12.8 million and approximately $2.6 in cash to be paid in the fourth quarter and Periflo in September 2010 for cash consideration of $4.2 million. The cash payment for Seals was financed by borrowings under the Companys credit facility.

On April 18, 2008, the Company completed a $100.0 million unsecured senior bank term loan agreement (Term Loan), with covenants consistent with the existing Credit Facility and a maturity on December 21, 2011. At September 30, 2010, there was $90.0 million outstanding under the Term Loan with $7.5 million included within short term borrowings. Interest under the Term Loan is based on the bank agents reference rate or LIBOR plus an applicable margin and is payable at the end of the selected interest period, but at least quarterly. The applicable margin is based on the Companys senior, unsecured, long-term debt rating and can range from 45 to 100 basis points. Based on the Companys current debt rating, the applicable margin is 80 basis points. The Term Loan requires a repayment of $7.5 million in April 2011, with the remaining balance due on December 21, 2011. The Company used the proceeds from the Term Loan to pay down existing debt outstanding under the Credit Facility. At September 30, 2010 the Company has an interest rate exchange agreement related to the Term Loan that expires in December 2011. With a current notional amount of $90.0 million, the agreement effectively converted $100.0 million of floating-rate debt into fixed-rate debt at an interest rate of 4.00%. The fixed rate consists of the fixed rate on the interest rate exchange agreement and the Companys current margin of 80 basis points on the Term Loan.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide