IDEX CORP /DE/

IDEX Corporation is a global applied solutions provider serving niche markets with mission critical components for everyday life, with substantially all business activities carried out through over 50 wholly-owned subsidiaries. The Company operates in three reportable segments: Health & Science Technologies (HST), Fluid & Metering Technologies (FMT), and Fire & Safety/Diversified Products (FSDP). The Company's products are sold in niche markets across a wide range of industries throughout the world, and its businesses are affected by levels of industrial activity and economic conditions in the U.S. and other countries where it does business, as well as by the relationship of the U.S. Dollar to other currencies. Levels of capacity utilization and capital spending in certain markets and overall industrial activity are important factors that influence demand for IDEX's products.

IDEX believes that each of its reporting units is a leader in its products and services, and that its strong financial performance has been attributable to its ability to design and engineer specialized quality products coupled with its ability to successfully identify, acquire and integrate strategic acquisitions. The Company encounters a wide variety of competitors that vary by product, market and geographic area, and each of its segments has multiple competitors, as no single competitor offers all of the same products or serves all of the same markets as IDEX. IDEX believes that the principal points of competition are product quality, design and engineering capabilities, product development, conformity to customer specifications, quality of post-sale support, timeliness of delivery and effectiveness of the Company's distribution channels. In 2025, the Company did not have any customers that accounted for more than 3% of net sales.

IDEX generates revenue through the design, production and distribution of a wide range of precision fluidics, positive displacement pumps, powder and liquid processing technologies, drying systems, micro-precision components, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, ultra-precision diamond tools, laboratory and commercial equipment and precision photonic solutions, technical ceramics and hermetic sealing products and porous material structures and flow control solutions. The Company is primarily a short cycle business and backlog is not generally considered a significant factor as relatively short delivery periods and rapid inventory turnover are characteristic of most of the Company's products. Revenue from products and services transferred to customers at a point in time comprised approximately 95% of the Company's revenue and over time comprised approximately 5% of the Company's revenue in all years presented.

The HST segment designs, produces and distributes a wide range of precision fluidics, positive displacement pumps, powder and liquid processing technologies, drying systems, micro-precision components, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, ultra-precision diamond tools, laboratory and commercial equipment and precision photonic solutions, technical ceramics and hermetic sealing products and porous material structures and flow control solutions. The HST segment includes the Scientific Fluidics & Optics, Performance Pneumatic Technologies, Sealing Solutions, and Material Processing Technologies reporting units. For the year ended December 31, 2025, HST net sales were $1,495.5 million ¹, representing 43% of total segment net sales, and HST Adjusted EBITDA was $397.8 million ², representing 39% of total segment Adjusted EBITDA. The FMT segment designs, produces and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems and provides flow monitoring and other services, and includes the Pumps, Water, Energy, Agriculture, and Valves reporting units. For the year ended December 31, 2025, FMT net sales were $1,224.0 million ³, representing 35% of total segment net sales, and FMT Adjusted EBITDA was $406.8 million ⁴, representing 40% of total segment Adjusted EBITDA. The FSDP segment designs, produces and distributes firefighting pumps, valves and controls, rescue tools, lifting bags and other components and systems, engineered stainless steel banding and clamping devices, and precision equipment for dispensing, metering and mixing colorants and paints, and includes the Fire & Safety, Dispensing, and BAND-IT reporting units. For the year ended December 31, 2025, FSDP net sales were $745.3 million ⁵, representing 22% of total segment net sales, and FSDP Adjusted EBITDA was $213.5 million ⁶, representing 21% of total segment Adjusted EBITDA.

Within the HST segment, Scientific Fluidics & Optics is a global authority in life science fluidics, optics, microfluidics and photonics, and includes IDEX Health & Science and the IDEX Materials Science Solutions platform. Performance Pneumatic Technologies provides specialized, high-performing air-moving technologies, including Gast and Airtech. Sealing Solutions focuses on providing special seals and related products and solutions, including Precision Polymer Engineering, FTL Seals Technology, SFC Koenig, and the Roplan businesses. Material Processing Technologies provides process equipment and global support service solutions, including Quadro, Fitzpatrick, Microfluidics, and Matcon. Within the FMT segment, Pumps is a leading manufacturer of positive displacement pumps including Viking Pump, Warren Rupp, and ABEL. Water is a leading provider of metering technology, flow monitoring products and underground surveillance services, including ADS, iPEK, Envirosight, WinCan, MyTana, Pipeline Renewal Technologies, Trebor, and Pulsafeeder. Energy is a leading supplier of flow meters, small volume provers, electronic registration and control products, including Advanced Flow Solutions (Corken, Liquid Controls, SAMPI), Toptech, and Flow Management Devices. Agriculture is a leading supplier of pumps, valves, controllers, fittings and systems, including Banjo and KZValve. Valves is a leader in the design, manufacture and sale of specialty valve products, including Richter and Aegis. Within the FSDP segment, Fire & Safety businesses produce truck-mounted and portable fire pumps, stainless steel and brass valves, monitors, nozzles, foam and compressed air foam systems, and rescue equipment. Dispensing businesses produce precision equipment for dispensing, metering and mixing colorants and paints. BAND-IT is a leading producer of high-quality stainless steel banding, buckles and clamping systems.

On July 29, 2025, the Company acquired Micro-LAM, Inc. in a stock acquisition for cash consideration of $80.4 million ⁷, net of cash acquired of $0.3 million ⁸, plus a potential earnout of up to $12.0 million ⁹ of additional cash consideration based upon the achievement of certain financial performance targets over a two-year period. Total consideration of $81.6 million ¹⁰ includes the fair value of the potential earnout as of the acquisition date of $1.2 million ¹¹. Goodwill and intangible assets recognized as part of this transaction were $37.0 million ¹² and $44.8 million ¹³, respectively. On September 17, 2025, the Company's Board of Directors authorized the repurchase of an additional $635.0 million ¹⁴ of the Company's common shares, in addition to the prior repurchase authorization of $500.0 million ¹⁵ on March 17, 2020. During 2025, the Company repurchased 1.4 million ¹⁶ shares at a cost of $252.4 million ¹⁷ (including estimated excise taxes of $2.4 million ¹⁸, which will be paid in 2026), of which $2.2 million ¹⁹ was settled in January 2026. The Company increased its quarterly cash dividend by 3% from $0.69 ²⁰ per common share in 2024 to $0.71 ²¹ per common share in 2025. Total dividend payments to common shareholders were $212.6 million ²² in 2025 compared with $205.3 million ²³ in 2024.

Record reported Net sales of $3,457.5 million ²⁴ increased 6% overall and increased 1% organically. Reported diluted earnings per common share attributable to IDEX of $6.41 ²⁵ decreased 3%. Adjusted diluted EPS attributable to IDEX of $7.95 ²⁶ increased 1%. Operating cash flow of $680.4 million ²⁷ increased 2% and was 141% of net income, up from 132%. Free cash flow of $616.8 million ²⁸ increased 2% and was 103% of adjusted net income, up from 101%. Returned capital to shareholders in the form of $248 million ²⁹ of share repurchases and $213 million ³⁰ of dividends.

The Company's 2026 Outlook discussion in MD&A states that within the HST segment, the Company anticipates continued growth supported by robust demand across data center, semiconductor, space and defense, and food and beverage and pharmaceutical end markets. By contrast, the industrial and automotive businesses have yet to experience a meaningful recovery in demand. In the FMT segment, the Company expects continued momentum in the Water businesses. However, core industrial markets continue to track flat, and the Company is monitoring softer demand trends across chemical, energy and agricultural applications. For the FSDP segment, near-term headwinds are expected to persist due to ongoing weakness in Fire & Safety markets outside the United States and subdued capital spending in Dispensing. BAND-IT is generally performing in line with the Company's other industrial businesses, trending flat to start the year.

The Company plans to continue strengthening its position in targeted advantaged markets by further integrating its capabilities and advancing its 8020 operating framework. These initiatives are designed to support sustained organic growth while enabling disciplined bolt-on acquisitions. Within the HST segment, the Company anticipates continued growth supported by robust demand across data center, semiconductor, space and defense, and food and beverage and pharmaceutical end markets. The Company's growth strategy includes acquisitions and divestitures, and the Company intends to continue to seek acquisition opportunities both to expand into new markets and to enhance its position in existing markets throughout the world.

The Company's 2026 Outlook discussion in MD&A states that the Company plans to continue strengthening its position in targeted advantaged markets by further integrating its capabilities and advancing its 8020 operating framework. These initiatives are designed to support sustained organic growth while enabling disciplined bolt-on acquisitions. The Company remains committed to a balanced capital deployment strategy that includes returning capital to shareholders.

The Company believes it has ample capacity in its plants and equipment to meet demand increases for future growth in the intermediate term, especially given its operational improvement initiatives that usually increase capacity. The Company continues to actively manage inventory levels and remains focused on delivering products and services to customers. The Company believes it has a sufficient number of suppliers necessary to meet demand but continues to actively evaluate its current suppliers and identify alternative sources to manage supply chain constraints, if needed.

Capital expenditures generally include machinery and equipment that support growth and improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. The Company believes it has sufficient operating cash flows to continue to meet current obligations and invest in planned capital expenditures. Cash flows from operations were more than adequate to fund capital expenditures of $63.6 million ³¹ and $65.1 million ³² in 2025 and 2024, respectively. On September 17, 2025, the Company's Board of Directors authorized the repurchase of an additional $635.0 million ³³ of the Company's common shares, in addition to the prior repurchase authorization of $500.0 million ³⁴ on March 17, 2020. As of December 31, 2025, the amount of share repurchase authorization remaining was $924.7 million ³⁵, excluding fees, commissions, excise taxes and other expenses related to such common stock repurchases. The Company increased its quarterly cash dividend by 3% from $0.69 ³⁶ per common share in 2024 to $0.71 ³⁷ per common share in 2025.

Within the HST segment, the industrial and automotive businesses have yet to experience a meaningful recovery in demand. In the FMT segment, core industrial markets continue to track flat, and the Company is monitoring softer demand trends across chemical, energy and agricultural applications. For the FSDP segment, near-term headwinds are expected to persist due to ongoing weakness in Fire & Safety markets outside the United States and subdued capital spending in Dispensing. A slowdown in the U.S. or global economy and, in particular, any of the Company's specific end markets could materially reduce the Company's sales and profitability. The Company is also subject to risks related to changes in geopolitical and economic conditions in the U.S. and foreign countries, including the imposition of and changes in trade regulations, tariffs and other trade barriers, and currency exchange rate fluctuations.

The Company's growth strategy includes acquisitions and divestitures, and the Company may not be able to make acquisitions of suitable candidates, integrate acquisitions successfully, or successfully execute divestitures, which could negatively impact the Company and its financial condition, results of operations and cash flow. The markets served by the Company are highly competitive and this competition could reduce sales and profit margins, as competitors may develop products that are superior or may adapt quicker to new technologies. The Company is dependent on the availability of raw materials, parts and components used in its products, and changes in supply of, or price for, raw materials, parts and components may materially adversely affect the Company, including due to increased or new tariffs and other trade barriers. The Company's business operations may be materially adversely affected by information systems interruptions or intrusion, including those arising from cybersecurity attacks or incidents or violations of laws regulating privacy and data security. The Company's intangible assets, including goodwill, are a significant portion of total assets, and at December 31, 2025, goodwill and intangible assets totaled $3,414.5 million ³⁸ and $1,247.4 million ³⁹, respectively, and a write-off of intangible assets or goodwill would adversely impact the Company's operating results and significantly reduce the Company's net worth.

Management's message in the MD&A highlights that during 2025, the Company delivered organic sales growth and margin expansion as positive price across all segments more than offset lower volumes in the FMT and FSDP segments. Improved operational results included productivity improvements together with platform optimization savings resulting from restructuring and other cost containment actions taken during 2025. Results were tempered by higher interest expense, the absence of certain tax benefits recognized in 2024 as well as higher amortization on acquisition related intangibles assets. The Company generated strong cash flow and continued to deploy capital, including nearly $250 million of share repurchases during the year. Looking ahead, the Company plans to continue strengthening its position in targeted advantaged markets by further integrating its capabilities and advancing its 8020 operating framework. These initiatives are designed to support sustained organic growth while enabling disciplined bolt-on acquisitions. At the same time, the Company remains committed to a balanced capital deployment strategy that includes returning capital to shareholders.