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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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(MARK ONE)
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
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)
<TABLE>
<C> <C>
DELAWARE 36-3555336
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
630 DUNDEE ROAD 60062
NORTHBROOK, ILLINOIS (Zip Code)
(Address of principal executive offices)
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Registrant's telephone number, including area code: (847) 498-7070
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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COMMON STOCK, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE
CHICAGO STOCK EXCHANGE
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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 nonaffiliates of
IDEX Corporation as of December 31, 1996 was $487,210,569.
The number of shares outstanding of IDEX Corporation's common stock, par
value $.01 per share (the "Common Stock"), as of February 5, 1997 was
29,146,410.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1996 annual report to shareholders of IDEX Corporation (the
"1996 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 "1997 Proxy Statement") with respect to the 1997 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.
IDEX Corporation ("IDEX" or the "Company") designs, manufactures and
markets a broad range of fluid handling and industrial products serving a
diverse customer base in the U.S. and internationally. IDEX competes with
relatively few major manufacturers in most of its markets, and believes that
each of its twelve principal subsidiaries (the "Subsidiaries") has a significant
domestic market share in its principal product area. The Company manufactures
proprietary products of its own design with an engineering content. Generally,
all of the Company's businesses compete on the basis of performance, quality,
service and price.
FLUID HANDLING GROUP
The Fluid Handling Group, which in 1996 accounted for 75% of the Company's
total sales, manufactures a wide variety of industrial pumps and controls,
fire-fighting pumps and rescue tools, dispensing and mixing equipment,
lubrication systems and low-horsepower compressors. In 1996, approximately 41%
of this Group's sales were to customers outside the U.S. The eight business
units comprising this Group are described below.
CORKEN. Corken, headquartered in Oklahoma City, Oklahoma, produces
low-horsepower compressors, vane and turbine pumps, and valves used for the
transfer of liquefied petroleum gas ("LPG"), compressed natural gas, and other
gaseous substances.
Management believes Corken has approximately 50% of the market for pumps
and small-horsepower compressors used in LP gas distribution facilities. Its
principal competitor in this market is the Blackmer division of Dover
Corporation. Corken faces many significant competitors in the industrial
(non-LPG distribution) segment of its business. Most of Corken's sales are made
through domestic and international distributors which incorporate Corken's
products into engineered packages sold to ultimate users. Shipments outside the
U.S. represent approximately 40% of Corken's sales.
FLUID MANAGEMENT. Fluid Management, acquired July 29, 1996 for
approximately $135 million, has its headquarters and a manufacturing facility in
Wheeling, Illinois. Manufacturing facilities are also located in Sassenheim,
Netherlands; Norderstedt, Germany; and Unanderra, Australia with sales and
distribution facilities worldwide. Approximately 55% of sales are from outside
the U.S.
Fluid Management is the world's leading manufacturer of dispensing and
mixing equipment that precisely meters and mixes a wide variety of liquids
including paints, colorants, inks, dyes and other liquids and pastes. Its
products, sold under such names as Miller(R), Harbil(R), Accutinter(R) and
Eurotinter, can be found in local paint and building supply stores, paint
plants, vehicle manufacturing facilities, and other locations where fluids are
dispensed and mixed in precise volumes. Management believes Fluid Management has
a 50% worldwide market share.
HALE PRODUCTS. Hale has its headquarters and a manufacturing facility in
Conshohocken, Pennsylvania. It also has production facilities in Shelby, North
Carolina; St. Joseph, Tennessee; Warwick, England; and Erlangen, Germany and
service and distribution centers in Dieburg, Germany and Singapore.
Hale is the world's leading manufacturer of truck-mounted fire-fighting
pumps and manufactures a wide range of portable, mobile and freestanding pumping
units. Hale also is the world's leading manufacturer of rescue tool systems with
the Hurst Jaws of Life(R) and Lukas rescue systems. It is estimated to have a
worldwide market share for truck-mounted fire-fighting pumps and rescue systems
in excess of 50%. Hale's principal competitor in the U.S. truck-mounted
fire-fighting pump market is the Waterous Company, a subsidiary of American Cast
Iron Pipe Company.
Sales of Hale's truck-mounted fire-fighting pumps are made directly to
manufacturers of fire trucks, while portable pumps and rescue tools are
generally sold through independent distributors. Approximately 50% of Hale's
sales are to customers outside the U.S.
LUBRIQUIP. Lubriquip is headquartered in Warrensville Heights, Ohio and
also has manufacturing plants in McKees Rocks, Pennsylvania, and Madison,
Wisconsin and sales offices in Antwerp, Belgium and Singapore. Its products
include a wide range of centralized oil and grease lubrication systems and
force-feed lubricators marketed under the Trabon, Manzel, Grease Jockey, Kipp
and OPCO trademarks for use in
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general industrial and transportation applications. Lubriquip offers a wide
variety of customized systems using selected standard components to meet
specific customer requirements. Lubriquip is subject to competition from several
companies in both the domestic and international markets; however, management
estimates that Lubriquip is the largest U.S. producer of such systems with
approximately one-third of the domestic market for centralized lubricating
systems.
Lubriquip's system components include pumps and pump packages for
pneumatic, mechanical, electric and hydraulic operations; metering devices;
electronic controllers; monitors and timers; and accessories. These systems are
sold through independent distributors to a wide range of industrial markets,
including machine tools (both automotive and general purpose), chemical
processing, construction equipment, food processing machinery, engine and
compressor, railroad, and over-the-road truck industries. Lubriquip's products
are available worldwide through over 100 independent distributors, with
international sales representing approximately 20% of total shipments. Through
these networks, Lubriquip also provides an extensive support system of
application engineering, service and repair parts for its products.
MICROPUMP. Micropump has its headquarters and principal manufacturing
facilities in Vancouver, Washington, and also has operations in St. Neots,
England. Micropump, the leader in corrosion-resistant, magnetically-driven
miniature pump technology with an estimated 40% market share, is subject to
competition from several companies.
Micropump's products include pumps and fluid management systems for
low-flow abrasive and corrosive applications such as inks, dyes, solvents,
chemicals, petrochemicals, acids and chlorides. Micropump products are used in a
variety of industries including chemical processing, laboratory, medical,
printing, electronics, pulp and paper, water treatment and textiles. Management
estimates that 50% of Micropump's sales are to customers outside the U.S.
PULSAFEEDER. Pulsafeeder has its headquarters and a manufacturing facility
in Rochester, New York. It also manufactures products in Punta Gorda, Florida,
and has sales offices in Singapore and Beijing, China. Pulsafeeder designs and
markets a wide range of metering pumps and controls. These products precisely
regulate the flow of liquids in mixing and blending applications. Primary
markets served are water and wastewater treatment, chemical and hydrocarbon
processing, food processing, and warewash institutional.
Pulsafeeder products are grouped into three categories: engineered pumps,
standard pumps and electronic controls. Engineered pumps, designed and
manufactured in Rochester, New York, include positive displacement,
hydraulically-actuated diaphragm pumps used in precise metering applications in
such industries as electric/gas utilities, chemical processing, petroleum
refining and pharmaceuticals, as well as specialty pumps targeted at niche
markets, including pumps designed to handle highly corrosive chemicals. Standard
pumps, manufactured in Punta Gorda, Florida, represent a growing portion of
Pulsafeeder's business, and include metering pumps designed for water treatment
and water conditioning applications. Electronic controls, also manufactured in
Punta Gorda, Florida, are of advanced microprocessor-based design, and are used
to control the chemical composition of fluids being pumped, including such
applications as recirculating systems for cooling towers and boilers, and in the
water treatment market.
Pulsafeeder pumps are sold through an extensive network of company sales
personnel and independent representatives. Management believes that Pulsafeeder
has approximately 40% of the domestic market for metering pumps used in the
process industries and water treatment markets. Approximately 25% of its sales
are outside of the U.S. Pulsafeeder's principal competitor is Milton Roy, a unit
of Sundstrand Corporation.
VIKING PUMP. Viking Pump, headquartered in Cedar Falls, Iowa, is the
largest business unit in the Company's Fluid Handling Group and is one of the
world's largest producers of positive displacement rotary gear pumps (Viking's
main product) and spur gear pumps. Management believes that Viking pumps, which
are classified as rotary gear pumps, represent approximately 35% of the domestic
rotary gear pump market. Viking's principal rotary pump competitors are Roper
Industries and the Blackmer division of Dover Corporation. Viking's other
products include rotary lobe and metering pumps, speed reducers, flow dividers
and basket-type line strainers.
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Viking pumps are used by numerous industries such as the chemical,
petroleum, food, pulp and paper, machinery and construction industries. Viking
is not dependent on any one industry for a substantial percentage of its sales.
Sales of Viking pumps and replacement parts are made through approximately 100
independent distributors and directly to original equipment manufacturers.
Approximately 35% of Viking's sales occur outside of the U.S. In addition to its
facilities in Cedar Falls, Iowa, Viking also maintains manufacturing facilities
in Eastbourne, England; Windsor, Ontario, Canada; Shannon, Ireland; and has
sales offices in Alphen, Netherlands; Singapore; Toronto, Ontario, Canada; and
Beijing, China.
Viking operates two foundries in Cedar Falls, Iowa which supply a majority
of Viking's castings requirements. In addition, these foundries sell a variety
of castings to outside customers.
WARREN RUPP. Warren Rupp is a producer of air-operated and motor-driven
double-diaphragm pumps, generally sold under the SandPIPER trade name. This
business unit is headquartered in Mansfield, Ohio and has a distribution and
assembly facility in Shannon, Ireland to serve the European market and a sales
office in Singapore. Warren Rupp's principal competitor is Wilden Pump and
Engineering Co. Management believes that Warren Rupp has approximately one-third
of the domestic market for air-operated double-diaphragm pumps.
Warren Rupp's pumps are well suited for pumping liquids, slurries and
solids in suspension. Its pump models are made from cast iron, stainless steel
and non-metallic composites to meet requirements to pump various types of
material. End-user markets include the paint, chemical, mining, construction,
and automotive service industries. Warren Rupp pumps are sold through a network
of independent distributors and directly to a small number of original equipment
manufacturers. Sales outside of the U.S. represent approximately 45% of Warren
Rupp sales.
INDUSTRIAL PRODUCTS GROUP
The Industrial Products Group, which in 1996 accounted for 25% of the
Company's total sales, manufactures sheet metal fabricating equipment and
tooling, stainless steel banding and clamping devices, vibration control
devices, and sign-mounting products and systems. In 1996, approximately 41% of
this Group's sales were to customers outside the U.S. The four business units
comprising this Group are described below.
BAND-IT. Band-It, headquartered in Denver, Colorado, is one of the largest
worldwide producers of stainless steel bands, buckles and preformed clamps and
related installation tools. Its clamps are used to secure hoses to nipples,
devices to pipes and poles, signs to sign standards, fences to posts, insulation
to pipes, and for hundreds of other industrial clamping functions. Band-It also
has developed an exclusive line of tools for installing its clamping devices.
Management believes that Band-It has approximately 50% of the domestic
market for quality stainless steel bands and buckles; however, it is subject to
competition from several companies in both the domestic and international
markets. Band-It markets its products domestically and internationally. It has
manufacturing and distribution facilities in Staveley, England and in Singapore
to serve the European and Pacific Basin markets. International sales account for
approximately 50% of Band-It's sales. Its products are sold through a worldwide
network of nearly 4,000 distributors to a wide range of markets, including the
transportation, utilities, mining, oil and gas, industrial maintenance,
construction, communication and electronics industries.
SIGNFIX. Signfix has its headquarters and a manufacturing facility near
Bristol, England with another manufacturing facility in Tipton, England. Signfix
also has a distribution facility in Germany.
Signfix, the leading U.K.-based manufacturer of sign-mounting devices and
related equipment with an estimated 45% U.K. market share, is subject to
competition from several companies. Signfix products include road, traffic and
commercial sign-mounting systems, and stainless steel bands and clamps for
various municipal, commercial and industrial applications. Management estimates
that 20% of Signfix sales are to customers outside the U.K.
STRIPPIT. Strippit, headquartered in Akron, New York, with sales and
service offices in Swindon, England; Paris, France; Singapore; and Beijing,
China, is the largest business unit in the Company's Industrial Products Group
and is a manufacturer of a broad range of sheet metal fabricating equipment and
tooling.
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Strippit produces equipment which incorporates a high proportion of
state-of-the-art technology and has numerous active patents in machine tool
technology, none of which is individually material to its operations. Strippit's
products include single station semi-automatic fabricators; advanced
computer-controlled turret punching machines (including models with plasma arc
or laser cutting heads); punches, dies and related tooling items; load/unload
systems for use in conjunction with Strippit's equipment; and hand-operated
metal forming machines for use in industries which utilize light gauges of sheet
metal. Strippit also is a distributor of Burgmaster metal-cutting machines and
parts. Strippit's products are sold through a combination of direct sales, and
independent distributors and agents to a large and diverse customer base,
including customers in the electronics, office, farm and hospital equipment
markets. Approximately 35% of Strippit's total sales are to customers outside
the U.S.
Strippit is one of the largest domestic producers of its type of metal
fabricating equipment, and management believes it has approximately 25% of the
domestic market for numerically controlled punching machines. Its principal
competitor, U.S. Amada, Ltd., is a Japanese firm which, based on its combined
domestic production and imports, is currently believed to have a somewhat larger
share of the numerically controlled punching machine market in the U.S.
VIBRATECH. Vibratech, headquartered in Alden, New York, produces a broad
line of engineered long-life mechanical energy absorption devices, providing
vibration and motion control for transportation equipment, machinery
manufacturers and other users. Vibratech's three major product lines are:
viscous torsional vibration dampers used primarily for heavy duty diesel and
high-horsepowered motorsport engines and transmissions; fluid and friction ride
control products for rail, truck and vehicle manufacturers; and specialized
aircraft vibration and motion control dampers. The largest portion of its sales
are made directly to original equipment manufacturers who also service the
replacement parts market.
Vibratech's principal competitor in the viscous torsional vibration damper
market for heavy duty diesel engines is a U.K.-based subsidiary of Cummins
Engine, Inc., which serves the damper requirements of Cummins Engine in the U.S.
market. Management believes that Vibratech has approximately 40% of the domestic
market for viscous torsional vibration dampers, including that portion serviced
by captive producers. Sales outside the U.S. are approximately 10% of
Vibratech's total sales.
GENERAL ASPECTS APPLICABLE TO THE COMPANY'S BUSINESS GROUPS
EMPLOYEES. At December 31, 1996, IDEX had approximately 3,600 employees, of
which approximately one-fourth were represented by labor unions with various
contracts expiring through June 2000. Management believes that its relationship
with employees is generally good. While no assurances can be given, management
believes that the Company will be able to satisfactorily renegotiate its
collective bargaining agreements.
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. Backlogs do not have material significance in either
of the Company's business segments. The Company regularly and systematically
adjusts production schedules and quantities based on the flow of incoming
orders. 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 1996,
1995 and 1994 see the table presented on page 17 under "Management's Discussion
and Analysis of Financial Condition and Results of Operations," as set forth in
the 1996 Annual Report and incorporated herein by reference, and Note 11 of the
"Notes to Consolidated Financial Statements" on page 28 of the 1996 Annual
Report, which is incorporated herein by reference.
EXPORTS. For export information for the years 1996, 1995 and 1994, see Note
11 of the "Notes to Consolidated Financial Statements" on page 28 of the 1996
Annual Report, which is incorporated herein by reference.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names of the executive officers of the
Company, their ages, the positions and offices with the Company held by them,
and their business experience during the past 5 years.
<TABLE>
<CAPTION>
POSITION WITH IDEX AND
NAME BUSINESS EXPERIENCE
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Donald N. Boyce (Age 58)..................... Chairman of the Board, President and Chief Executive
Officer since prior to January 1992.
Frank J. Hansen (Age 55)..................... Senior Vice President -- Operations and Chief
Operating Officer since August 1994; Vice President
-- Group Executive from January 1993 to July 1994;
President of Viking Pump, Inc. from prior to January
1992 to July 1994.
Wayne P. Sayatovic (Age 51).................. Senior Vice President -- Finance, Chief Financial
Officer and Secretary since August 1994; Vice
President -- Finance, Chief Financial Officer and
Secretary from January 1992 to July 1994.
Mark W. Baker (Age 49)....................... Vice President -- Group Executive since August 1994;
President of Lubriquip, Inc. since prior to January
1992.
Jerry N. Derck (Age 50)...................... Vice President -- Human Resources since November
1992; Vice President -- Human Resources, North
America of Tupperware Corporation, a subsidiary of
Premark International from prior to January 1992 to
October 1992.
P. Peter Merkel, Jr. (Age 63)................ Vice President -- Group Executive since October 1995;
President of Band-It IDEX, Inc. since prior to
January 1992.
Wade H. Roberts, Jr. (Age 50)................ Vice President -- Group Executive since January 1993;
President of Hale Products, Inc. since May 1994;
President of Strippit, Inc. from prior to January
1992 to April 1994.
Clinton L. Kooman (Age 53)................... Controller since November 1995; Assistant Controller
of Manufacturing Accounting from prior to January
1992 to November 1995.
Douglas C. Lennox (Age 44)................... Treasurer since November 1995; Vice President --
Controller of Lubriquip, Inc. from prior to January
1992 to November 1995.
</TABLE>
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.
ITEM 2. PROPERTIES.
The Company's principal plants and offices have an aggregate floor space
area of approximately 2.4 million square feet, of which 1.8 million square feet
(75%) are located in the U.S., and approximately .6 million (25%) are located
outside the U.S., primarily in the U.K. (8%), Germany (7%) and the Netherlands
(4%). These facilities are considered to be suitable and adequate for their
operations. Management believes that utilization of manufacturing capacity
ranges from 50% to 80% in each facility. The Company's executive offices occupy
approximately 10,000 square feet of leased space in Northbrook, Illinois.
Approximately 1.9 million square feet (79%) of the principal plant and
office floor area is owned by the Company, and the balance is held under lease.
Approximately 1.9 million square feet (79%) of the principal plant and office
floor area is held by business units in the Fluid Handling Group and .5 million
square feet (21%) is held by business units in the Industrial Products Group.
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ITEM 3. LEGAL PROCEEDINGS.
The Company and the Subsidiaries are party to various legal proceedings
arising in the ordinary course of business, none of which is expected to have a
material adverse effect on the Company's business or financial condition.
The Subsidiaries are subject to extensive federal, state and local laws,
rules and regulations pertaining to environmental, waste management and health
and safety matters. Permits are or may be required for some of the Subsidiaries'
facilities and waste-handling activities and these permits are subject to
revocation, modification and renewal. In addition, risks of substantial costs
and liabilities are inherent in the Subsidiaries' operations and facilities, as
they are with other companies engaged in similar industries, and there can be no
assurance that such costs and liabilities will not be incurred. The Company is
not aware of any environmental, health or safety matter which could,
individually or in the aggregate, materially adversely affect the business or
financial condition of the Company or any of its Subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.
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" at page 33 of the 1996 Annual Report.
The principal market for the Common Stock is the New York Stock Exchange.
As of February 5, 1997, the Common Stock was held by 1,309 shareholders and
there were 29,146,410 shares of Common Stock outstanding.
ITEM 6. SELECTED FINANCIAL DATA.
The information set forth under "Historical Data" at page 15 of the 1996
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" at pages 16 to 19 of the 1996
Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements of IDEX, including the Notes thereto,
together with the independent auditors' report thereon of Deloitte & Touche LLP
at pages 20 to 30 of the 1996 Annual Report are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT AUDITORS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
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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 "Election of Directors"
at pages 2 to 6 of the 1997 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" at 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 "Compliance with Section 16(a) of
the Exchange Act" at page 17 of the 1997 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding executive compensation is incorporated by reference
to the materials under the caption "Compensation of Directors and Executive
Officers" at pages 7 to 13 of the 1997 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 set forth under "Principal
Shareholders" at pages 14 to 15 of the 1997 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 "Election of
Directors -- Certain Interests" at page 6 of the 1997 Proxy Statement.
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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 1996 Annual Report.
<TABLE>
<CAPTION>
1996 ANNUAL
REPORT PAGE
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<S> <C>
Consolidated Balance Sheets as of December 31, 1996 and
1995...................................................... 20
Statements of Consolidated Operations for the Years Ended
December 31, 1996, 1995 and 1994.......................... 21
Statements of Consolidated Shareholders' Equity for the
Years Ended December 31, 1996, 1995 and 1994.............. 22
Statements of Consolidated Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994.......................... 23
Notes to Consolidated Financial Statements.................. 24-29
Independent Auditors' Report................................ 30
</TABLE>
<TABLE>
<CAPTION>
1996 FORM
10-K PAGE
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<S> <C>
2. Financial Statement Schedule
(a) Independent Auditors' Report.................... 9
(b) Schedule II -- Valuation and Qualifying
Accounts............................................ 9
All other schedules are omitted because they
are not applicable, or not
required, or because the required information
is included in the
Consolidated Financial Statements of IDEX or
the Notes thereto.
</TABLE>
3. Exhibits
The exhibits filed with this report are listed on the "Exhibit Index."
(B) Reports on Form 8-K
In a report on Form 8-K dated July 29, 1996 and filed with the Securities
and Exchange Commission on October 15, 1996, the Company reported the
purchase of certain assets and assumption of certain liabilities of Fluid
Management Limited Partnership for approximately $133 million and issuance
of 75,700 shares (113,550 shares, as adjusted to reflect the 3-for-2 common
stock dividend effective January 31, 1997) of IDEX Common Stock.
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INDEPENDENT AUDITORS' REPORT
IDEX Corporation:
We have audited the financial statements of IDEX Corporation and its
Subsidiaries as of December 31, 1996 and 1995 and for each of the three years in
the period ended December 31, 1996, and have issued our report thereon, dated
January 21, 1997; such financial statements and report are included in your 1996
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 herein.
Deloitte & Touche LLP
Chicago, Illinois
January 21, 1997
IDEX CORPORATION AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
BALANCE CHARGED TO BALANCE
BEGINNING OF COSTS AND DEDUCTIONS END
DESCRIPTION YEAR EXPENSES (1) OTHER OF YEAR
----------- ------------ ---------- ---------- ----- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1996:
Deducted From Assets To Which They Apply:
Allowance for Doubtful Accounts......... $2,159 $1,516 $1,600 $ 312 $2,387
Year Ended December 31, 1995:
Deducted From Assets To Which They Apply:
Allowance for Doubtful Accounts......... 1,822 1,557 1,006 (214) 2,159
Year Ended December 31, 1994:
Deducted From Assets To Which They Apply:
Allowance for Doubtful Accounts......... 1,174 591 484 541 1,822
</TABLE>
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(1) Represents uncollectible accounts, net of recoveries.
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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, on the 12th day of
February, 1997.
IDEX CORPORATION
By /s/ WAYNE P. SAYATOVIC
--------------------------------------
Wayne P. Sayatovic
Senior Vice President -- Finance,
Chief Financial Officer and
Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
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<C> <S> <C>
/s/ DONALD N. BOYCE Chairman of the Board, President February 12, 1997
- ------------------------------------------------ and Chief Executive Officer
Donald N. Boyce (Principal Executive Officer)
/s/ WAYNE P. SAYATOVIC Senior Vice President -- February 12, 1997
- ------------------------------------------------ Finance, Chief Financial Officer
Wayne P. Sayatovic and Secretary (Principal
Financial and Accounting
Officer)
/s/ RICHARD E. HEATH Director February 12, 1997
- ------------------------------------------------
Richard E. Heath
/s/ HENRY R. KRAVIS Director February 12, 1997
- ------------------------------------------------
Henry R. Kravis
/s/ WILLIAM H. LUERS Director February 12, 1997
- ------------------------------------------------
William H. Luers
/s/ PAUL E. RAETHER Director February 12, 1997
- ------------------------------------------------
Paul E. Raether
/s/ CLIFTON S. ROBBINS Director February 12, 1997
- ------------------------------------------------
Clifton S. Robbins
/s/ GEORGE R. ROBERTS Director February 12, 1997
- ------------------------------------------------
George R. Roberts
/s/ NEIL A. SPRINGER Director February 12, 1997
- ------------------------------------------------
Neil A. Springer
/s/ MICHAEL T. TOKARZ Director February 12, 1997
- ------------------------------------------------
Michael T. Tokarz
</TABLE>
10
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
2.1 Asset Purchase Agreement dated July 26, 1996 between IDEX
and Fluid Management Limited Partnership, Fluid Management
U.S., L.L.C., Fluid Management Service, Inc., Fluid
Management Canada, LLC, Fluid Management France, SNC, FM
International, Inc., Fluid Management Europe B.V.
(incorporated by reference to Exhibit No. 2.1 to the
Quarterly Report of IDEX on Form 10-Q for the quarter ended
June 30, 1996, Commission File No. 1-10235).
3.1 Restated Certificate of Incorporation of IDEX (formerly HI,
Inc.) (incorporated by reference to Exhibit No. 3.1 to the
Registration Statement on Form S-1 of IDEX Corporation, et
al., Registration No. 33-21205, as filed on April 21, 1988).
3.1(a) Amendment to Restated Certificate of Incorporation of IDEX
(formerly HI, Inc.), as amended (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 (incorporated by
reference to Exhibit No. 3.2 to Post-Effective Amendment No.
2 to the Registration Statement on Form S-1 of IDEX
Corporation, 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 (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 Corporation, et
at., Registration No. 33-21205, as filed on February 12,
1990).
4.1 Restated Certificate of Incorporation and By-Laws of IDEX
(filed as Exhibits No. 3.1 through No. 3.2(a)).
4.2 Indenture, dated as of September 15, 1992, among IDEX, the
Subsidiaries and Fleet National Bank of Connecticut, as
Trustee, relating to the 9 3/4% Senior Subordinated Notes of
IDEX due 2002 (incorporated by reference to Exhibit No. 4.2
to the Annual Report of IDEX on Form 10-K for the year
ending December 31, 1992, Commission File No. 1-10235).
4.2(a) First Supplemental Indenture dated as of December 22, 1995
among IDEX and the Subsidiaries named therein and Fleet
National Bank of Connecticut, a national banking
association, as trustee (incorporated by reference to
Exhibit No. 4.2(a) to the Annual Report of IDEX on Form 10-K
for the year ending December 31, 1995, Commission File No.
1-10235).
4.2(b) Second Supplemental Indenture dated as of July 29, 1996
among IDEX and the Subsidiaries named therein and Fleet
National Bank of Connecticut, a national banking
association, as trustee (incorporated by reference to
Exhibit No. 4.2(b) to the Quarterly Report of IDEX on Form
10-Q for the quarter ended June 30, 1996, Commission File
No. 1-10235).
4.3 Specimen Senior Subordinated Note of IDEX (including
specimen Guarantee) (incorporated by reference to Exhibit
No. 4.3 to the Annual Report of IDEX on Form 10-K for the
year ending December 31, 1992, Commission File No.1-10235).
4.4 Specimen Certificate of Common Stock (incorporated by
reference to Exhibit No. 4.3 to the Registration Statement
on Form S-2 of IDEX Corporation, et al., Registration No.
33-42208, as filed on September 16, 1991).
4.5 Third Amended and Restated Credit Agreement dated as of July
17, 1996 among IDEX, Bank of America Illinois, as Agent, and
other financial institutions named therein (incorporated by
reference to Exhibit No. 4.5 to the Quarterly Report of IDEX
on Form 10-Q for the quarter ended June 30, 1996, Commission
File No. 1-10235).
4.6 Amended and Restated Pledge Agreement dated as of July 17,
1996 by IDEX in favor of the Agent and Banks (incorporated
by reference to Exhibit No. 4.6 to the Quarterly Report of
IDEX on Form 10-Q for the quarter ended June 30, 1996,
Commission File No. 1-10235).
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
Exhibit
Number Description Page
------- ----------- ----
<C> <S> <C>
4.6(a) Supplement No. 1 to the Amended and Restated Pledge Agreement dated as of August 5, 1996, by
IDEX in favor of the Agent and Banks (incorporated by reference to Exhibit No. 4.6(a) to the
Quarterly Report of IDEX on Form 10-Q for the quarter ended June 30, 1996, Commission File No.
1-10235).
4.7 Amended and Restated Subsidiary Guaranty Agreement dated as of July 17, 1996, by the
Subsidiaries named therein in favor of the Agent and Banks (incorporated by reference to
Exhibit No. 4.7 to the Quarterly Report of IDEX on Form 10-Q for the quarter ended June 30,
1996, Commission File No. 1-10235).
4.7(a) Supplement No. 1 to the Amended and Restated Subsidiary Guaranty Agreement dated as of August
5, 1996, by FMI Management Company in favor of the Agent and Banks (incorporated by reference
to Exhibit No. 4.7(a) to the Quarterly Report of IDEX on Form 10-Q for the quarter ended June
30, 1996, Commission File No. 1-10235).
4.7(b) Supplement No. 2 to the Amended and Restated Subsidiary Guaranty Agreement dated as of August
5, 1996, by Fluid Management, Inc. in favor of the Agent and Banks (incorporated by reference
to Exhibit No. 4.7(b) to the Quarterly Report of IDEX on Form 10-Q for the quarter ended June
30, 1996, Commission File No. 1-10235).
4.8 Registration Rights Agreement dated as of July 26, 1996, between IDEX and Mitchell H. Saranow
(incorporated by reference to Exhibit No. 4.8 to the Quarterly Report of IDEX on Form 10-Q for
the quarter ended June 30, 1996, Commission File No. 1-10235).
**10.1 Amended and Restated Employment Agreement between IDEX Corporation and Donald N. Boyce, dated
as of January 22, 1988 (incorporated by reference to Exhibit No. 10.15 to Amendment No. 1 to
the Registration Statement on Form S-1 of IDEX Corporation, Registration No. 33-28317, as filed
on June 1, 1989).
**10.1(a) First Amendment to the Amended and Restated Employment Agreement between IDEX Corporation and
Donald N. Boyce, dated as of January 13, 1993 (incorporated by reference to Exhibit No. 10.5(a)
to the Annual Report of IDEX on Form 10-K for the year ending December 31, 1992, Commission
File No. 1-10235).
**10.1(b) Second Amendment to the Amended and Restated Employment Agreement between IDEX Corporation and
Donald N. Boyce, dated as of September 27, 1994 (incorporated by reference to Exhibit No.
10.5(b) to the Annual Report of IDEX on Form 10-K for the year ending December 31, 1994,
Commission File No. 1-10235).
**10.2 Amended and Restated Employment Agreement between IDEX Corporation and Wayne P. Sayatovic,
dated as of January 22, 1988 (incorporated by reference to Exhibit No. 10.17 to Amendment No. 1
to the Registration Statement on Form S-1 of IDEX Corporation, Registration No. 33-28317, as
filed on June 1, 1989).
**10.2(a) First Amendment to the Amended and Restated Employment Agreement between IDEX Corporation and
Wayne P. Sayatovic, dated as of January 13, 1993 (incorporated by reference to Exhibit No.
10.7(a) to the Annual Report of IDEX on Form 10-K for the year ending December 31, 1992,
Commission File No. 1-10235).
**10.2(b) Second Amendment to the Amended and Restated Employment Agreement between IDEX Corporation and
Wayne P. Sayatovic, dated as of September 27, 1994 (incorporated by reference to Exhibit No.
10.6(b) to Amendment No. 1 to the Annual Report of IDEX on Form 10-K for the year ending
December 31, 1994, Commission File No. 1-10235).
**10.3 Employment Agreement between IDEX Corporation and Frank J. Hansen dated as of August 1, 1994
(incorporated by reference to Exhibit No. 10.7 to the Quarterly Report of IDEX on Form 10-Q for
the quarter ended September 30, 1994, Commission File No. 1-10235).
**10.3(a) First Amendment to the Employment Agreement between IDEX Corporation and Frank J. Hansen, dated
as of September 27, 1994 (incorporated by reference to Exhibit No. 10.7(a) to the Annual Report
of IDEX on Form 10-K for the year ending December 31, 1994, Commission File No. 1-10235).
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
Exhibit
Number Description Page
------- ----------- ----
<C> <S> <C>
**10.4 Employment Agreement between IDEX Corporation and Jerry N. Derck dated as of September 27, 1994
(incorporated by reference to Exhibit No. 10.8 to the Annual Report of IDEX on Form 10-K for
the fiscal year ending December 31, 1994, Commission File No. 1-10235).
**10.5 Management Incentive Compensation Plan (incorporated by reference to Exhibit No. 10.21 to
Amendment No. 1 to the Registration Statement on Form S-1 of IDEX Corporation, Registration No.
33-28317, as filed on June 1, 1989).
**10.5(a) Amended Management Incentive Compensation Plan (incorporated by reference to Exhibit No.
10.9(a) to the Quarterly Report of IDEX on Form 10-Q for the quarter ended March 31, 1996,
Commission File No. 1-10235).
**10.6 Form of Indemnification Agreement (incorporated by reference to Exhibit No. 10.23 to the
Registration Statement on Form S-1 of IDEX Corporation, Registration No. 33-28317, as filed on
April 26, 1989).
**10.7 Form of Shareholder Purchase and Sale Agreement (incorporated by reference to Exhibit No. 10.24
to Amendment No. 1 to the Registration Statement on Form S-1 of IDEX Corporation, Registration
No. 33-28317, as filed on June 1, 1989).
**10.8 Revised Form of IDEX Corporation Stock Option Plan for Outside Directors (incorporated by
reference to Exhibit No. 10.22 to Post-Effective Amendment No. 4 to the Registration Statement
on Form S-1 of IDEX Corporation, et al., Registration No. 33-21205, as filed on March 2, 1990).
**10.9 Amendment to the IDEX Corporation Stock Option Plan for Outside Directors adopted by resolution
to the Board of Directors dated as of January 28, 1992 (incorporated by reference to Exhibit
No. 10.21(a) of the Annual Report of IDEX on Form 10-K for the year ended December 31, 1992,
Commission File No. 1-10235).
**10.10 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).
**10.10(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, Registration No. 333-18643,
as filed on December 23, 1996).
**10.11 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).
**10.12 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).
**10.13 1996 Stock Plan for Officers of IDEX (incorporated by reference to Exhibit No. 4.4 to the
Registration Statement on Form S-8 of IDEX Registration No. 333-18643, as filed on December 23,
1996).
**10.14 Amended and Restated IDEX Corporation Directors Deferred Compensation Plan, as amended
(incorporated by reference to Exhibit No. 4.6 to the Registration Statement on Form S-8 of IDEX
Registration No. 333-18643, as filed on December 23, 1996).
**10.15 IDEX Corporation 1996 Deferred Compensation Plan for Officers, as amended (incorporated by
reference to Exhibit No. 4.8 to the Registration Statement on Form S-8 of IDEX, Registration
No. 333-18643, as filed on December 23, 1996).
**10.16 IDEX Corporation 1996 Deferred Compensation Plan for Non-Officer Presidents, as amended
(incorporated by reference to Exhibit No. 4.7 to the Registration Statement on Form S-8 of
IDEX, Registrant No. 333-18643, as filed on December 23, 1996).
*13 1996 Annual Report to Shareholders of IDEX.
*21 Subsidiaries of IDEX.
*24 Consent of Deloitte & Touche LLP.
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
Exhibit
Number Description Page
------- ----------- ----
<C> <S> <C>
*27 Financial Data Schedule.
Revolving Credit Facility, dated as of September 29, 1995, between Dunja
Verwaltungsgesellschaft GmbH and Bank of America NT & SA, Frankfurt Branch (a copy of the
agreement will be furnished to the Commission upon request).
</TABLE>
- -------------------------
* Filed herewith.
** Management contract or compensatory plan or arrangement.
14
<PAGE> 1
Exhibit 13
[GRAPHIC]
New Product Development
[GRAPHIC]
Acquisition Strategy
[GRAPHIC]
International Presence
[GRAPHIC]
Market Leadership
[IDEX 96 LOGO]
IDEX Corporation - Annual Report
<PAGE> 2
[IDEX 96 LOGO]
IDEX Corporation manufactures an extensive array of proprietary, engineered
industrial products sold to customers in a variety of industries around the
globe. Our businesses have leading positions in their niche markets, and we
have a history of achieving high profit margins.
Among factors in the success equation at IDEX are emphasis on the worth
of our people, fleetfootedness, ethical business conduct, continuing new
product development, superior customer service, top-quality products, market
share growth, international expansion, and above-average shareholder returns.
The IDEX acronym stands for -- and the essence of IDEX is - Innovation,
Diversity, and EXcellence. The shares of IDEX Corporation are traded on the
New York Stock Exchange and the Chicago Stock Exchange under the symbol IEX.
TOTAL SHAREHOLDER RETURNS
<TABLE>
<S> <C> <C> <C> <C> <C>
IDEX $100 June 2 89 S&P INDEX 100 June 2 89
116 1989 111 1989
79 1990 108 1990
115 1991 141 1991
164 1992 151 1992
246 1993 167 1993
291 1994 168 1994
428 1995 232 1995
427 1996 286 1996
</TABLE>
[BAR GRAPH]
Total return to IDEX shareholders since going public in June 1989 has been
327%. In the same period the S&P 500 has increased 186%.
CONTENTS PAGE
Shareholders' Letter....................................2
Business Groups.........................................4
Business Profile........................................6
Market Leadership.......................................8
Product and Process Innovation.........................10
Acquisition Strategy...................................12
Historical Data........................................14
Management's Discussion and Analysis...................16
Financial Statements...................................20
Business Units.........................................31
Corporate Officers and Directors.......................32
Shareholder Information................................33
<PAGE> 3
Financial Highlights
(dollars and share amounts in thousands except per share data)
- --------------------------------------------------------------------------------
NET SALES
(in millions)
1988 1989 1990 1991 1992 1993 1994 1995 1996
200 221 228 228 277 309 400 487 563
[BAR GRAPH]
EARNINGS PER SHARE
1988 1989 1990 1991 1992 1993 1994 1995 1996
.34 .58 .65 .63 .71 .87 1.15 1.53 1.69
[BAR GRAPH]
Sales have grown at a 14% compound annual rate and earnings per share
have increased at a 22% rate since IDEX was formed in 1988.
<TABLE>
<CAPTION>
Years ended December 31................. 1996 CHANGE 1995 CHANGE 1994
---- ------ ---- ------ ----
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Net sales............................... $562,551 15% $ 487,336 22% $ 399,502
Income from operations.................. 98,305 14 86,238 32 65,538
Interest expense........................ 18,942 19 15,948 17 13,581
Net income.............................. 50,198 11 45,325 35 33,610
FINANCIAL POSITION
Working capital......................... $108,313 5% $ 103,091 26% $ 82,007
Total assets............................ 583,773 25 466,122 26 371,096
Long-term debt.......................... 271,709 32 206,184 23 168,166
Shareholders' equity.................... 195,509 30 150,945 30 116,305
PERFORMANCE MEASURES
Percent of net sales
Income from operations............... 17.5% 17.7% 16.4%
Net income........................... 8.9 9.3 8.4
Return on average assets................ 9.7 10.8 10.7
Debt as a percent of capitalization..... 58.2 57.7 59.1
Return on average shareholders' equity.. 29.0 33.9 33.6
PER SHARE DATA
Net income.............................. $ 1.69 10% $ 1.53% 34% $ 1.15
Cash dividends paid..................... .43 16 .37 -
Shareholders' equity.................... 6.76 28 5.26 29 4.06
OTHER DATA
Employees............................... 3,598 11% 3,233 14% 2,841
Shareholders of record.................. 1,305 (4) 1,359 (2) 1,388
Weighted average shares outstanding..... 29,779 1 29,609 1 29,331
</TABLE>
All share and per share data throughout this report have been restated to
reflect the three-for-two stock splits effected in the form of 50% stock
dividends in January 1995 and 1997.
1
<PAGE> 4
SHAREHOLDER'S LETTER
- --------------------------------------------------------------------------------
TO OUR SHAREHOLDERS:
1996 was another excellent year for IDEX. Records were set in sales,
net income and earnings per share; we acquired a significant business; several
new products were introduced; our international expansion continued; and the
company ranked at the high end of peer group comparisons in profitability and
growth.
This year's performance continues the unbroken string of improvements
in net income (before unusual items) since the company was formed in 1988.
These achievements result from the superb contributions of an exceptionally
capable team throughout IDEX of whom we're very proud. Recognizing the strength
of the company and its prospects, our Board of Directors in December approved
another three-for-two stock split and an increase in cash dividends.
NET INCOME RISES 11% ON A SALES INCREASE OF 15%
Net sales were a record $562.6 million in 1996 and increased by 15%
over the $487.3 million of 1995. Net income reached a new high of $50.2 million
and rose by 11% over the $45.3 million of last year. Earnings per share on a
post-split basis at $1.69 grew by 16 cents over the previous high of $1.53 set
in 1995. Market conditions enabled us to show an improvement of only 1% in the
revenues of our base businesses, with almost all of the growth resulting from
including 1995 acquisitions for a full year and our 1996 acquisition for five
months.
IDEX's operating profit margins always have been well above average for
an industrial company. Our margins at 17.5% of sales were slightly below last
year's 17.7%, but that was due entirely to the inclusion of the recently
acquired businesses in this year's results. Our high base business margins were
actually improved slightly, and we see opportunities to improve margins at
recently acquired businesses. Since the company was formed in 1988, earnings
per share have grown at a compound annual rate of 22%.
FLUID MANAGEMENT ACQUIRED
On July 29, 1996, IDEX acquired Fluid Management, headquartered in
Wheeling, Illinois, with operations in the Netherlands, Germany and Australia,
and with worldwide distribution. Fluid Management is the world's leading
manufacturer of dispensing and mixing equipment for colorants, inks and dyes.
We paid $135 million for the business, or about 8.3 times earnings before
interest, taxes, depreciation, and amortization. Fluid Management has revenues
of approximately $90 million, and about 50% of its sales occur outside of the
U.S. Harbil(R), Miller(R), Accutinter(R) and Eurotinter are among the brand
names one will see on its products in local paint stores, printing plants,
truck manufacturing plants and other locations where paint, ink and other
fluids are mixed and dispensed. Fluid Management is an IDEX type of company
with excellent potential.
We will continue to apply our rigid criteria and follow our disciplined
approach as we seek to add businesses in the future.
INTERNAL DEVELOPMENT
We recognize that we must continuously improve operations and introduce
new products to sustain the growth IDEX has exhibited to date. Our future
success hinges on superior customer service and top-quality, state-of-the-art
products manufactured at competitive prices.
Again in 1996 about one-fourth of our sales resulted from products
totally redesigned or introduced within the past four years. Among the new
products introduced in 1996 were electronically controlled pumps at Warren
Rupp, new truck-mounted LP gas pumps at Corken, the
<TABLE>
<CAPTION>
International Sales Operating Margins Net Income Margins
Value line Value line
Percent of In Dollars Industrial Industrial
Year Total Sales Millions Idex Composite Index Idex Composite Index
<S> <C> <C> <C> <C> <C> <C>
1987 19% 35 18% 10% 5% 6%
1988 22% 48 19% 10% 7% 5%
1989 24% 52 17% 9% 7% 4%
1990 26% 59 16% 8% 7% 4%
1991 28% 63 15% 8% 7% 4%
1992 28% 79 16% 9% 8% 5%
1993 27% 84 16% 10% 8% 5%
1994 32% 127 18% 11% 9% 6%
1995 35% 169 18% 11% 9% 6%
1996 41% 231
International growth has been Since formation of the IDEX has outperformed
a key factor in IDEX's success. company, IDEX has continuously most manufacturers
achieved significantly higher in net income margins.
operating margins than most
manufacturers.
</TABLE>
2
<PAGE> 5
- -----------------------------------------------------------------------------96)
FoamMaster(R) pump system for fire fighting at Hale, a new peristaltic metering
pump at Pulsafeeder, and a patented Ultra-Lok(R) clamping system at Band It.
Quality has always been a cornerstone of business practice in IDEX, but
the internationally recognized ISO 9000 standards have become the ideal in
recent years. Every one of our business units--at all manufacturing locations
around the globe--has achieved ISO certification.
In our continuing efforts to improve efficiency and enhance customer
service, we made major advances in business systems at Viking, Pulsafeeder,
Signfix and Corken. We consolidated Pulsafeeder's Oklahoma facility with its
operations in Florida, and we installed more productive manufacturing equipment
in many locations. A normal measure of productivity is sales per employee, which
has risen every year since IDEX began operations, and reached a new high of
$167,000 in 1996. Our focus on cash flow enabled us to cut debt by $68 million
in 1996 before borrowing $133 million to complete the Fluid Management
acquisition.
The tremendous potential in international markets has been a focus for
several years. In 1996, 41% of total revenues were to customers outside of the
U.S. and 62% of these revenues were produced in IDEX facilities outside the
U.S. International sales growth has outpaced domestic growth for many years,
and we expect this will continue as we emphasize international development in
1997 and the years beyond.
STOCK SPLIT AND DIVIDEND INCREASE DEMONSTRATE CONFIDENCE
Given IDEX's solid performance and its positive outlook, in December
1996 our Board of Directors declared a three-for-two stock split and a 12.5%
increase in cash dividends. The stock split was effected in the form of a 50%
stock dividend, and the cash dividend on the post-split shares is 12 cents per
share per calendar quarter, which is equivalent to 18 cents on the pre-split
shares, and is up by 2 cents from the previous dividend level. Both the stock
split and the first increased cash dividend are being paid on January 31, 1997,
to shareholders of record on January 15, 1997.
POSITIONED FOR FUTURE GROWTH
IDEX has many strengths that position it especially well for the
future:
- - We serve diverse markets.
- - We sell to thousands of customers.
- - We have significant market shares, with each of our businesses either number
one or a close second in market share in its niche.
- - We emphasize new product and process development.
- - We have healthy margins and strong cash flow.
- - Our international sales are significant and growing.
- - We will continue to explore acquisition opportunities following our
disciplined approach.
These characteristics give us a solid base for future development. We
are proud of all of the people of the company who have helped make IDEX
successful and continue to carry out their responsibilities in an extraordinary
manner. We believe 1997 will be another excellent year for IDEX, and that the
years beyond also hold a great deal of promise. We hope that you, our
shareholders, share in our positive view of tomorrow for IDEX.
[Signature of Donald N. Boyce]
Donald N. Boyce
[PHOTO OF DONALD N. BOYCE] Chairman of the Board and President
January 21, 1997
3
<PAGE> 6
FLUID HANDLING GROUP
- --------------------------------------------------------------------------------
[PHOTO]
IDEX's Fluid Handling Group is comprised of eight business units that
design, produce, and distribute a broad range of engineered industrial pumps
and related controls, fire-fighting pumps and rescue tools, mixing and
dispensing equipment, lubrication systems and low-horsepower compressors.
In 1996 the Fluid Handling Group accounted for 75% of sales and 78% of
profits. Sales to customers outside of the U.S. represented 41% of the Group's
shipments.
SALES
[PIE CHART]
Fluid Handling 75%
Industrial Products 25%
CORKEN
FLUID MANAGEMENT
HALE PRODUCTS
LUBRIQUIP
MICROPUMP
PULSAFEEDER
VIKING PUMP
WARREN RUPP
4
<PAGE> 7
INDUSTRIAL PRODUCTS GROUP
- --------------------------------------------------------------------------------
[PHOTO]
The Industrial Products Group includes four business units that design,
produce and distribute proprietary products for a wide range of industrial
applications. These products include metal fabrication equipment and tooling,
high-quality stainless steel banding and clamping devices and related
installation tools, sign mounting systems and vibration control mechanisms.
The Industrial Products Group generated 25% of sales and 22% of profits in
1996, and sales to customers outside the U.S. represented 41% of its shipments.
PROFITS
[PIE CHART]
Fluid Handling 78%
Industrial Products 22%
BAND-IT
SIGNFIX
STRIPPIT
VIBRATECH
5
<PAGE> 8
BUSINESS PROFILE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
[CORKEN [FLUID MANAGEMENT [HALE PRODUCTS [LUBRIQUIP
PHOTO] PHOTO] PHOTO] PHOTO]
CORKEN FLUID MANAGEMENT HALE PRODUCTS LUBRIQUIP
<S> <C> <C> <C> <C>
PRODUCT Small-horsepower Precision-engineered Truck-mounted and portable Centralized oil and grease
OFFERING compressors, vane and equipment for dispensing, fire pumps, and the Hurst lubrication systems, force-
turbine pumps, and valves. metering and mixing paints, Jaws of Life(R) and Lukas feed lubricators, metering
coatings, colorants, inks, rescue tool systems. devices, related electronic
dyes and other liquids and control and accessories.
pastes.
- ------------------------------------------------------------------------------------------------------------------------------------
MARKETS Liquefied petroleum gas (LPG), Retail and commercial paint Public and private fire Machine tools, transfer
SERVED oil and gas, petrochemical, outlets; printers; paint, and rescue applications. machines, conveyors,
environmental, health care coating, ink and other packaging machinery,
and general industrial. manufacturers. transportation equipment
and construction machinery.
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCT Products used for transfer Fluid management systems Pumps for water or foam to Lubrication devices to
APPLICATIONS of LPG, alternative fuels for a wide variety of extinguish fires, and rescue prolong equipment life and
and other gases and liquids. liquids and pastes in a equipment for extricating reduce maintenance costs.
broad range of industries, accident victims.
from retail point-of-sale
equipment to complete
manufacturing systems.
- ------------------------------------------------------------------------------------------------------------------------------------
COMPETITIVE Market leader for pumps Industry innovator and World's leading manufacturer Market leader in centralized
STRENGTHS and small-horsepower worldwide market leader of truck-mounted fire pumps lubrication systems serving
compressors used in LPgas in automatic and manually and rescue systems with a broad range of industries.
distribution facilities with operated dispensing, estimated worldwide market Estimated one-third market
estimated 50% market share. metering and mixing share in excess of 50%. share.
equipment. Estimated 50%
worldwide market share.
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL 40% of sales outside 55% of sales outside the 50% of sales outside the 20% of sales outside
SCOPE the U.S. U.S. Also manufactures in U.S. Also manufactures in the U.S.
the Netherlands, Germany England and Germany.
and Australia.
- ------------------------------------------------------------------------------------------------------------------------------------
EXAMPLES New truck-mounted LPgas New high-speed automatic New electronically New Trabon(R) modular
OF RECENTLY pumps, and a new line dispensers featuring controlled FoamMaster(R) divider valve with zero-leak
INTRODUCED of water cooled and flanged advanced graphic software, pump system for fire- inlet and integral filter,
PRODUCTS gas compressors for the integrated label printer fighting applications. status indicators and
process industries. and color matching system. electronic sensors.
Completely redesigned line
of manual and automatic
dispensers and mixers for
European market.
- ------------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING Oklahoma City, Oklahoma Wheeling, Illinois Conshohocken, Pennsylvania Warrensville Heights, Ohio
LOCATIONS Sassenheim, Netherlands Shelby, North Carolina McKees Rocks,
Norderstedt, Germany St. Joseph, Tennessee Pennsylvania
Unanderra, Australia Warwick, England Madison, Wisconsin
Erlangen, Germany
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
[MICROPUMP [PULSAFEEDER [VIKING PUMP [WARREN RUPP [BAND-IT
PHOTO] PHOTO] PHOTO] PHOTO] PHOTO]
MICROPUMP PULSAFEEDER VIKING PUMP WARREN RUPP BAND-IT
<S> <C> <C> <C> <C> <C>
PRODUCT Small, precision- Metering pumps, Positive displacement Double-diaphragm Stainless steel
OFFERING engineered, magnetically special purpose rotary gear, lobe and pumps, both air- bands, buckles,
and electromagnetically rotary pumps and metering pumps and operated and preformed
driven centrifugal and related electronic related electronic motor-driven, clamps and
rotary gear pumps. controls. controls. and accessories. installation
tools.
- ------------------------------------------------------------------------------------------------------------------------------------
MARKETS Chemical processing, Water and waste- Chemical processing, Chemical, paint, Transportation
SERVED laboratory, medical, water treatment, petroleum, food food processing, equipment,
printing, electronics, pulp chemical and processing, pulp and electronics, utilities, mining,
and paper, water treatment hydrocarbon paper, construction construction, oil and gas,
and textiles. processing, food and power generation. industrial industrial
processing, and maintenance, maintenance,
warewash utilities construction,
institutional. and mining. electronics and
communications.
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCT Pumps and fluid Pumps and Pumps for materials Pumps for abrasive Clamps for
APPLICATIONS management systems controls for ranging from anhydrous and semisolid securing hoses,
for low-flow abrasive and introducing ammonia to peanut materials as well signs, signals,
corrosive applications such precise amounts butter, from thin to as for applications pipes, poles,
as inks, dyes, solvents, of fluids into highly viscous where product electrical lines
chemicals, petrochemicals, processes to liquids. degradation is a and numerous other
acids, and chlorides. manage chemical concern. "hold-together"
composition. applications.
- ------------------------------------------------------------------------------------------------------------------------------------
COMPETITIVE Market leader in corrosion- A leading Largest internal A leading diaphragm World's leading
STRENGTHS resistant, magnetically manufacturer of gear pump producer. pump producer producer of
driven, miniature pump metering pumps and Broad product offering products high-quality
technology with estimated controls used in offering and extensive in several stainless steel
40% market share. water treatment application technology materials including bands, buckles and
and process Estimated 35% share composites, clamps with
applications. of rotary gear pump stainless steel estimated 50%
Estimated 40% market. and cast iron. market share.
market share. Estimated one-third
market share.
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL 50% of sales outside the 25% of sales 35% of sales outside 45% of sales 50% of sales
SCOPE U.S. Also manufactures in outside the U.S. the U.S. Also outside the U.S. outside the U.S.
England. manufactures in Also manufactures Also manufactures
Canada, England and in Ireland. in England and
Ireland. Singapore.
- ------------------------------------------------------------------------------------------------------------------------------------
EXAMPLES New patented dual circuit New line of Internal gear pumps New interfaceable New series of patented
OF RECENTLY pump for industrial ink jet peristaltic pumps with integral electronic controls installation tools for
INTRODUCED printing and new canned and state-of-the- jacketing for to program double- 1/4" Tie-Lok(R) and
PRODUCTS rotor pump for x-ray art microprocessor- controlling liquid diaphragm pump Ultra-Lok(R) ties.
cooling equipment. based, digital temperature. Enhanced operations. New New 1/4" Ultra-Lok(R)
logic controllers method of sealing pump non-conductive, band and buckle
providing continuous shafts for highly groundable air- clamping system.
and automatic flow viscous applications. operated double-
control. diaphragm pumps.
- ------------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING Vancouver, Washington Rochester, New York Cedar Falls, Iowa Mansfield, Ohio Denver, Colorado
LOCATIONS St. Neots, England Punta Gorda, Windsor, Ontario, Shannon, Ireland Staveley, England
Florida Canada Singapore
Eastbourne, England
Shannon, Ireland
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
[SIGNFIX [STRIPPIT [VIBRATECH
PHOTO] PHOTO] PHOTO]
SIGNFIX STRIPPIT VIBRATECH
<S> <C> <C> <C>
PRODUCT Sign-mounting Computer-controlled turret Engineered motion-damping
OFFERING systems and punching machines, semi- products including viscous
stainless steel banding automatic fabricators, torsional vibration dampers,
and clamping products. punches, dies and related ride control and mechanical
tooling items. energy absorption devices.
- ----------------------------------------------------------------------------------------------------------
MARKETS Municipal and Office, food service, Heavy duty trucks, machinery,
SERVED commercial agricultural and hospital motorsport, off-highway and
signs, and equipment, electronic chassis rail vehicles.
industrial and other metal fabrication
maintenance industries.
applications.
- ----------------------------------------------------------------------------------------------------------
PRODUCT Road, traffic Equipment and tooling for Products to control motion,
APPLICATIONS and commercial punching, bending, shearing vibration and shock.
signs, bands and laser cutting sheet
and clamps for metal.
various applications.
- ----------------------------------------------------------------------------------------------------------
COMPETITIVE Leader in U.K. for Industry innovator and Inventor and largest non-
STRENGTHS sign-mounting products holder of numerous patents. captive U.S. producer of
and systems with estimated A leading producer of torsional vibration dampers.
45% market share. computer-controlled turret Estimated 40% share of
punching machines and viscous damper market.
related tooling with estimated
one-quarter market share.
- ----------------------------------------------------------------------------------------------------------
INTERNATIONAL 20% of sales outside 35% of sales outside 10% of sales outside
SCOPE the U.K. the U.S. the U.S.
- ----------------------------------------------------------------------------------------------------------
EXAMPLES Patented "dovetail" sign- Enhanced Helios(R) laser New railfrog retarders
OF RECENTLY mounting system and newly cutting system with versatile and Iron Highway rotary
INTRODUCED designed cantilever street high-performance non-contact suspension dampers.
PRODUCTS sign systems for the cutting head and an expanded
U.S. market. line of hydraulically actuated
fabricating machines.
- ----------------------------------------------------------------------------------------------------------
MANUFACTURING Bristol, England Akron, New York Alden, New York
LOCATIONS Tipton, England
</TABLE>
<PAGE> 11
[IDEX 96 LOGO]
FLUID HANDLING GROUP
Corken
Fluid Management
Hale Products
Lubriquip
Micropump
Pulsafeeder
Viking Pump
Warren Rupp
INDUSTRIAL PRODUCTS GROUP
Band-It
Signfix
Strippit
Vibratech
<PAGE> 12
[TRI-LUBE PUMP PACKAGE PHOTO] MARKET
- --------------------------------------------------------------------------------
LEADERSHIP
IDEX enjoys strong leadership positions in all the markets it serves.
Each of our 12 business units holds either the number one market position or
has a sizable share as the number two producer in its niche. On a weighted
average basis, we enjoy an approximate 40% share of the markets we serve.
IDEX achieves these healthy positions by being customer-driven,
responding quickly to users' needs with first-quality products of the latest
design. We are a fleetfooted organization--nimble and deft--with strong
controls, a sense of immediacy, and a will to eliminate unnecessary red tape
that slows responsiveness.
MARKETS SERVED
[PIE CHART]
LEAD-ER-SHIP Food Processing
[proper pronuciation] Construction & Material Handling
1. ability to lead Oil & Refining
2. to be ahead or Transportation Equipment
at the head of Water Conditioning
Fabricated Metal Products
Chemical Processing
Fire & Rescue
[HELIOS PHOTO] Paints & Coatings
All Other
8
<PAGE> 13
A market focus pervades our organization. We want to offer the best
overall proposition in the market. This does not mean the lowest price--but the
best value for customers considering such factors as service, durability,
performance, selection, ease of use, features, productivity, safety,
maintenance and long-term costs. As leaders, we have a rigorous program of
market, product and process development, leaving no doubt with our customers
that we do offer the best value.
Most of our products are sold through well established industrial
distribution networks with technological competence. Where unit volume
requirements are higher, we also sell directly to original equipment
manufacturers. Our distributors receive extensive training and support, and are
our partners in assisting thousands of end-users worldwide with product
selection and installation.
Our market development efforts have taken us into more than 100
countries around the globe. International sales have grown from 19% of total
sales nine years ago to 41% today, and we expect the pace of international
expansion to continue. We share application ideas with agents, distributors and
customers, thereby widening the base of industries and customers served. No
single industry and no single customer accounts for a major part of our sales.
IDEX's success hinges on the talent and performance of its people. We
have an outstanding team of dedicated employees who follow a strict code of
ethics. We want to be a company that people are proud to buy from, sell to,
work for, and invest in. By following ethical practices; striving for
operational superiority; providing superior quality, state of the art products;
selling our wide product range to a broad spectrum of customers and industries;
and continuously working with end-users and customers to develop new products,
we believe IDEX exemplifies its acronym--Innovation, Diversity, and EXcellence.
MARKET SHARE LEADERSHIP
[PIE CHART]
Estimated 40% weighted average share of markets served.
INTERNATIONAL SALES
[PIE CHART]
Domestic 59%
International 41%
Europe 22%
Far East 9%
Rest of World 10%
9
<PAGE> 14
[PHOTO]
Product and
INNOVATION
Innovation is the word represented by the first letter of the IDEX
name, and it is a key ingredient in our success equation. We support and foster
processes that lead to product improvements and new products for our customers.
For a number of years about 25% of our sales have come from products that have
been totally redesigned or introduced within the past four years.
One in 10 of the people at IDEX is directly engaged in product or
process technology development. However, it is every employee's job to
contribute to new product development, and so all business disciplines
participate in the effort. Multidisciplinary teams work with customers,
specifying engineers, users, distributors and focus groups to assure that our
products are state of the art, incorporating the latest proven technology, and
providing overall value to the customer.
in-no-va-tion
(in e-va shen)
1. something new or
different introduced
2. act of innovating; [PHOTO]
introduction of new
things or methods
10
<PAGE> 15
PROCESS [PHOTO] [PHOTO]
While most of our products are mechanical in nature, they often include
electronic control devices, so our engineering processes include the spectrum
of technical specialties from mechanical, materials, hydraulics and pneumatics
to electrical, electronic and software development.
Among the many new products introduced by IDEX business units in 1996
were:
- - A new line of peristaltic metering pumps at Pulsafeeder,
[PHOTO]
- - The Hale FoamMaster(R), an electronically controlled pump system for handling
the full range of foam concentrates in fire fighting applications,
- - New electronically operated, controlled volume pumps at Warren Rupp,
- - New pumps for LP gas trucks at Corken,
- - Hydraulically actuated, computer-controlled fabricating equipment at Strippit,
and
- - A broadened range of stainless steel clamping devices at Band-It.
Delivering top quality products has always been a cornerstone of
business practice at IDEX. However, in recent years, the internationally
recognized ISO 9000 quality system has become the benchmark for quality. We are
pleased to say that all of our business units are certified under the ISO 9000
standards, reinforcing our long-standing manufacturing integrity, and placing
us at the forefront with customers who rightfully demand first class products.
[PHOTO]
We have a persistent urge to create new products within IDEX to leapfrog
our own technology--and to stay well ahead of competition. Our fleetfooted
approach helps us bring new products with proven reliability to the market at a
rapid pace. IDEX's customers deserve the best and the latest of new product
technology.
NEW PRODUCT SALES
[PIE CHART]
25%
11
<PAGE> 16
[PHOTO]
Acquisition
STRATEGY
IDEX focuses on companies that manufacture proprietary industrial
products with leading positions in niche markets. Our carefully crafted and
rigidly applied acquisition criteria are designed to promote growth in
shareholder value rather than growth for growth's sake. We seek to acquire good
companies and make them better, rather than trying to make sick companies well.
Since 1989, we have completed 10 strategic acquisitions, each fitting
the IDEX mold and now contributing strongly to our bottom line. In 1996 we
completed our largest acquisition to date--Fluid Management. This company is the
world's leading manufacturer of dispensing and mixing equipment for paints,
colorants, inks and dyes. Headquartered in Wheeling, Illinois, Fluid Management
also has manufacturing facilities in the Netherlands, Germany and Australia,
and a distributor network that spans the globe.
1996 SALES
[PHOTO] [PIE CHART]
IDEX's three most recent acquisitions--Micropump, Lukas & Fluid
Management--accounted for 16% of 1996 sales.
strat-e-gy
(strat e-je)
1. a plan for obtaining
a specific goal
2. skill in managing
or planning
12
<PAGE> 17
[PHOTO-5 RODS] [PHOTO-16 PIPES]
- --------------------------------------------------------------------------------
Its products, sold under such names as Miller(R), Harbil(R), Accutinter(R) and
Eurotinter, can be found in local paint and building supply stores, printing
plants, vehicle manufacturing facilities, and other locations where fluids are
dispensed and mixed in precise volumes.
Following the acquisition of a company, we immediately implement IDEX's
financial control systems and begin the process of sharing the best practices
of our business units, because there is commonality in the engineering
principles, manufacturing methods, distribution channels and business systems
in all of our companies. We have the advantage of implementing what works
successfully in some locations and avoiding the problems of what doesn't work.
This cross pollination has resulted in superior customer service and improved
margins in our acquired businesses.
Acquisitions have been an important element of IDEX's success, with a
track record that speaks for itself. We will continue to use our very strong
cash flow to enhance shareholder value by adding businesses from time to time
that meet our strict standards.
REPAIR & REPLACEMENT SALES
[PIE CHART]
33%
[PHOTO-LUKAS LKE 70 CUTTER]
[PHOTO-MAN WITH BUCKET]
13
<PAGE> 18
HISTORICAL DATA
(dollars and share amounts in thousands
except per share data)
<TABLE>
<CAPTION>
NET SALES OPERATING MARGINS NET INCOME MARGINS
(in millions)
[LINE GRAPH] [LINE GRAPH]
Value line Value line
Industrial Industrial
Year Idex Composite Index Year Idex Composite Index
<S> <C> <C> <C> <C> <C>
1988 200 1988 18% 10% 1988 5% 6%
1989 221 1989 19% 10% 1989 7% 5%
1990 228 1990 17% 9% 1990 7% 4%
1991 228 1991 16% 8% 1991 7% 4%
1992 277 1992 15% 8% 1992 7% 4%
1993 309 1993 16% 9% 1993 8% 5%
1994 400 1994 16% 10% 1994 8% 5%
1995 487 1995 18% 11% 1995 9% 6%
1996 563 1996 18% 11% 1996 9% 6%
Sales have grown at a 14% IDEX's operating margins Aftertax margins at
compound annual rate. have consistently been IDEX compare very
almost double those of favorably to those
the average industrial of the average
company. industrial company.
<CAPTION>
EARNINGS PER SHARE EBITDA AND INTEREST TOTAL ASSETS AND
(in millions) LONG-TERM DEBT
(in millions)
[BAR GRAPH] [LINE GRAPH] [LINE GRAPH]
Long
Interest Term
Year EBITDA EXP Year Assets Dept
Year
<S> <C> <C> <C> <C> <C>
1988 .34 1988 43 19 1988 128 143
1989 .58 1989 48 18 1989 134 125
1990 .65 1990 47 16 1990 134 104
1991 .63 1991 45 13 1991 143 66
1992 .71 1992 53 12 1992 253 140
1993 .87 1993 61 11 1993 259 117
1994 1.15 1994 80 14 1994 371 168
1995 1.53 1995 103 16 1995 466 206
1996 1.69 1996 120 19 1996 584 272
Earnings per share IDEX's solid cash flow IDEX's balance sheet
have grown at a 22% coverage of interest has strengthened
compound annual rate. expense has improved considerably since
significantly. its first year of
operation in 1988.
</TABLE>
14
<PAGE> 19
[IDEX 96 LOGO]
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Net sales..................... $562,551 $487,336 $399,502 $308,638 $277,129 $228,181 $228,397 $220,971 $200,351
Gross profit.................. 216,154 188,021 152,644 118,352 105,977 85,089 84,853 84,613 74,151
SG&A expenses ................ 111,507 97,486 83,980 68,217 63,123 47,014 44,521 42,648 37,135
Goodwill amortization ........ 6,342 4,297 3,126 1,989 1,523 626 588 588 554
Income from operations ....... 98,305 86,238 65,538 48,146 41,331 37,449 39,744 41,377 36,462
Other income expense.......... (509) 753 559 1,159 1,831 1,024 1,626 1,553 698
Interest expense ............. 18,942 15,948 13,581 11,007 12,178 12,730 15,566 17,828 18,552
Provision for income taxes.... 28,656 25,718 18,906 12,972 10,838 9,826 10,101 9,994 7,954
Income before extraordinary
items ....................... 50,198 45,325 33,610 25,326 20,146 15,917 15,703 15,108 10,654
Extraordinary items .......... - - - - (3,441) 1,214 2,145 2,972 4,583
Net income ................... 50,198 45,325 33,610 25,326 16,705 17,131 17,848 18,080 15,237
Income applicable to common
stock ....................... 50,198 45,325 33,610 25,326 16,705 17,131 17,848 14,857 10,012
FINANCIAL POSITION
Current assets................ $201,170 $185,899 $151,357 $115,466 $116,723 $ 74,464 $ 75,697 $ 75,202 $ 68,983
Current liabilities........... 92,857 82,808 69,350 42,640 40,041 31,733 30,742 28,888 27,912
Working capital .............. 108,313 103,091 82,007 72,826 76,682 42,731 44,955 46,314 41,071
Current ratio ................ 2.2 2.2 2.2 2.7 2.9 2.3 2.5 2.6 2.5
Capital expenditures.......... 13,769 13,002 8,896 7,822 8,231 3,578 6,813 5,389 2,533
Depreciation and
amortization ................ 23,208 17,122 14,315 11,898 10,576 7,638 6,579 6,206 6,938
Total assets ................. 583,773 466,122 371,096 258,967 253,300 143,142 134,356 133,687 128,124
Long-term debt ............... 271,709 206,184 168,166 117,464 139,827 65,788 103,863 124,942 143,308
Total liabilities ............ 388,264 315,177 254,791 175,281 194,569 106,030 138,643 156,969 172,607
Shareholders' equity ......... 195,509 150,945 116,305 83,686 58,731 37,112 (4,287) (23,282) (84,681)
PERFORMANCE MEASURES
Percent of net sales
Gross profit ................ 38.4% 38.6% 38.2% 38.3% 38.2% 37.3% 37.2% 38.3% 37.0%
SG&A expenses ............... 19.8 20.0 21.0 22.1 22.8 20.6 19.5 19.3 18.5
Goodwill amortization ....... 1.1 .9 .8 .6 .5 .3 .3 .3 .3
EBITDA....................... 21.4 21.2 20.0 19.6 19.1 19.8 20.6 21.8 21.5
Income from operations ...... 17.5 17.7 16.4 15.6 14.9 16.4 17.4 18.7 18.2
Income before extraordinary
items ...................... 8.9 9.3 8.4 8.2 7.3 7.0 6.9 6.8 5.3
Return on average assets ..... 9.7 10.8 10.7 9.9 8.4 12.3 13.3 11.3 7.7
Debt as a percent of
capitalization .............. 58.2 57.7 59.1 58.4 70.4 63.9 104.3 122.9 244.4
Return on average shareholders'
equity ...................... 29.0 33.9 33.6 35.6 34.9 104.4 - - -
PER SHARE DATA
Income before extraordinary
items ...................... $ 1.69 $ 1.53 $ 1.15 $ .87 $ .71 $ .63 $ .65 $ .58 $ .34
Net income .................. 1.69 1.53 1.15 .87 .59 .68 .73 .72 .64
Cash dividends declared...... .44 .39 .09 - - - - - -
Cash dividends paid.......... .43 .37 - - - - - - -
Shareholders' equity ........ 6.76 5.26 4.06 2.93 2.07 1.32 (.18) (.96) (5.38)
Stock price
High ...................... 27 5/8 29 1/2 19 1/2 16 10 5/8 8 7/8 7 3/4 7 1/2 -
Low ....................... 19 7/8 18 3/8 15 1/8 9 3/4 7 3/8 4 1/4 4 5/8 6 1/8 -
Close ..................... 26 5/8 27 1/8 18 3/4 15 7/8 10 5/8 7 3/8 4 3/4 7 1/2 -
Price/earnings ratio at
year end ................... 16 18 16 18 15 12 7 13 -
OTHER DATA
Employees ................... 3,598 3,233 2,841 2,354 2,377 1,919 1,925 1,962 1,819
Shareholders of record ...... 1,305 1,359 1,388 1,454 1,551 1,602 1,714 1,820 -
Weighted average shares
outstanding ................. 29,779 29,609 29,331 28,976 28,389 25,367 24,309 20,537 15,740
Shares outstanding at
year end .................... 28,926 28,695 28,619 28,580 28,353 28,184 24,303 24,317 15,740
</TABLE>
All share and per share data has been restated to reflect the three-for-two
stock splits effected in the form of a 50% stock dividends in January
1995 and 1997.
15
<PAGE> 20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
HISTORICAL OVERVIEW AND OUTLOOK
IDEX sells a broad range of proprietary fluid handling and industrial
products to a diverse customer base in the U.S. and, to an increasing extent,
internationally. Accordingly, IDEX's businesses are affected by levels of
industrial activity and economic conditions in the U.S. and in other countries
where its products are sold and by the relationship of the U.S. dollar to other
currencies. Among the factors that influence the demand for IDEX's products are
interest rates, levels of capital spending in certain industries, and overall
industrial growth.
IDEX has a history of strong operating margins. The Company's operating
margins are impacted by, among other things, utilization of facilities as sales
volumes change and inclusion of newly acquired businesses which may have lower
margins and whose margins could be further reduced by purchase accounting
adjustments.
IDEX's 1996 orders, sales, net income and earnings per share surpassed
the records set in the prior year. Backlogs decreased nominally as shipments
exceeded incoming orders during 1996 but remain at IDEX's typical operating
level of about 1-1/2 months' sales. This customarily low level of backlog
allows IDEX to provide excellent customer service but also means that changes
in orders are felt quickly in operating results.
The following forward-looking statements are qualified by the
cautionary statement under the Private Securities Litigation Reform Act set
forth below. The slow rate of growth in the U.S. economy in 1995 continued
during 1996, and growth in many other economies of the world improved only
modestly. With a steady incoming order pace, strong market positions, a
continuous flow of new and redesigned products, and increasing opportunities
for expansion worldwide, the outlook for IDEX remains positive. Based on
current activity levels and barring unforeseen circumstances, IDEX continues to
expect that new records will be achieved in orders, sales, net income and
earnings per share in 1997. By stressing new product development, market share
growth, international expansion, operating improvements in newly acquired
businesses, and by adhering to its disciplined approach to acquisitions, IDEX
is well positioned to continue its growth progression profitably.
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
Demand for the Company's products is cyclical in nature and subject to
changes in general market conditions that affect demand. The Company's
customers operate primarily in industries that are rapidly impacted by changes
in economic conditions, which in turn can influence orders. The Company
operates without significant order backlogs. As a result, economic slowdowns
could quickly have an adverse effect on the Company's performance. In addition,
the Company's operating forecasts and budgets are based upon detailed
assumptions which it believes are reasonable, but inherent difficulties in
predicting the impact of certain factors may cause actual results to differ
materially from the forward-looking statements set forth earlier. These factors
include but are not limited to the following: the Company's utilization of its
capacity and the impact of capacity utilization on costs; developments with
respect to contingencies such as environmental matters and litigation; labor
market conditions and raw materials costs; levels of industrial activity and
economic conditions in the U.S. and other countries around the world; and
levels of capital spending in certain industries, all of which have a material
influence on order rates; the relationship of the U.S. dollar to other
currencies; interest rates; the Company's ability to integrate and operate
acquired businesses on a profitable basis; and other risks detailed from time
to time in the Company's filings with the Securities and Exchange Commission.
RESULTS OF OPERATIONS
For purposes of this discussion and analysis section, reference is made
to the table on page 17 and the Company's Statements of Consolidated Operations
on page 21. IDEX consists of two business segments: Fluid Handling and
Industrial Products.
PERFORMANCE IN 1996 COMPARED TO 1995
Orders, sales, net income and earnings per share were at record levels
for 1996. Incoming orders were 16% higher than 1995, with almost all of the
increase resulting from the acquisitions of Micropump (May 1995), Lukas
(October 1995) and Fluid Management (July 1996). The orders for the base
businesses were essentially unchanged in 1996 from 1995.
Sales for 1996 reached a record $562.6 million and increased $75.3
million or 15% over 1995. The inclusion of recently acquired businesses
accounted for substantially all of the volume growth, while sales in the core
business units rose by less than 1% from the prior year. Generally, the
Company's pump operations experienced modest growth which was offset by
declines in capital goods-related shipments. International sales accounted for
41% of the 1996 total, up from 35%. The increase in international sales
accounted for approximately 80% of the year-over-year improvement in total
sales.
Fluid Handling Group sales of $422.5 million increased $74.8 million or
22% from 1995. Inclusion of Fluid Management for a portion of the year, along
with Micropump and Lukas for a full year, accounted for almost all of the sales
improvement. Base business sales were up about 1% from the prior year. Sales
outside the U.S. increased to 41% of total Fluid Handling Group sales in 1996
from 33% in 1995 due to the inclusion of recent acquisitions, each of which has
a significant international presence, and stronger worldwide demand for
products of the Group's core businesses, especially industrial pumps.
Industrial Products Group sales of $141.5 million in 1996 increased by
$1.6 million or 1% compared to 1995 as a result of steady demand for this
Group's products. Shipments outside the U.S. were 41% of total sales in the
Industrial Products Group in 1996, up from 38% in 1995, principally from
greater international
16
<PAGE> 21
[IDEX 96 LOGO]
COMPANY AND BUSINESS GROUP FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, (1)
--------------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
FLUID HANDLING GROUP
Net sales(2). . . . . . . . . . . . . . . $422,528 $347,739 $275,598
Income from operations(3) . . . . . . . . 83,474 71,298 55,314
Operating margin . . . . . . . . . . . . 19.8% 20.5% 20.1%
Identifiable assets . . . . . . . . . . . $488,273 $365,332 $284,571
Depreciation and amortization . . . . . . 19,055 13,539 10,695
Capital expenditures. . . . . . . . . . . 9,956 6,972 5,772
INDUSTRIAL PRODUCTS GROUP
Net sales(2). . . . . . . . . . . . . . . $141,542 $139,945 $124,152
Income from operations(3) . . . . . . . . 23,311 23,165 18,034
Operating margin. . . . . . . . . . . . . 16.5% 16.6% 14.5%
Identifiable assets . . . . . . . . . . . $ 78,555 $ 86,911 $ 73,693
Depreciation and amortization . . . . . . 3,308 2,840 2,930
Capital expenditures. . . . . . . . . . . 3,779 6,014 2,848
COMPANY
Net sales . . . . . . . . . . . . . . . . $562,551 $487,336 $399,502
Income from operations. . . . . . . . . . 98,305 86,238 65,538
Operating margin. . . . . . . . . . . . . 17.5% 17.7% 16.4%
Income before interest and income taxes . $ 97,796 $ 86,991 $ 66,097
Identifiable assets . . . . . . . . . . . 583,773 466,122 371,096
Depreciation and amortization (4) . . . . 22,568 16,498 13,696
Capital expenditures. . . . . . . . . . . 13,769 13,002 8,896
</TABLE>
(1) Includes acquisitions of Hale Products (May 26, 1994), Micropump (May 2,
1995), Lukas (October 2, 1995) and Fluid Management (July 29, 1996) in
the Fluid Handling Group.
(2) Group net sales include intersegment sales.
(3) Group income from operations excludes net unallocated corporate operating
expenses.
(4) Excludes amortization of debt issuance expenses.
demand for banding and clamping devices, and sign-mounting systems.
Gross profit of $216.2 million in 1996 increased $28.1 million or 15%
from 1995. Gross profit as a percent of sales was 38.4% in 1996, down slightly
from 38.6% in 1995. Selling, general and administrative expenses increased to
$111.5 million in 1996 from $97.5 million in 1995 primarily from inclusion of
recent acquisitions, but as a percentage of sales, decreased slightly to 19.8%
in 1996 from 20.0% in 1995. Goodwill amortization increased 47% to $6.3 million
in 1996 from $4.3 million in 1995, with about half of the increase attributable
to the Fluid Management acquisition. As a percent of sales, goodwill
amortization remained flat at about 1% for both years.
Income from operations increased $12.1 million or 14% to $98.3 million
in 1996 from $86.2 million in 1995. Operating margin as a percent of sales
decreased nominally to 17.5% in 1996 from 17.7% in 1995. In the Fluid Handling
Group, income from operations of $83.5 million and operating margin of 19.8%
for 1996 compare to the $71.3 million and 20.5% recorded in 1995. The operating
margin decline resulted from the inclusion of recent acquisitions whose
operating margins were generally lower than the other business units in the
Group and whose profits were further reduced by purchase accounting
adjustments. Income from operations in the Industrial Products Group of $23.3
million and operating margin of 16.5% in 1996 were essentially equivalent to
the totals of $23.2 million and 16.6% achieved in 1995.
Interest expense increased to $18.9 million in 1996 from $15.9 million
in 1995 because of the additional borrowing required to complete the Fluid
Management acquisition, offset by a slightly lower interest rate environment in
1996.
The provision for income taxes increased to $28.7 million in 1996 from
$25.7 million in 1995. The effective tax rate of 36.3% in 1996 was essentially
unchanged from the 36.2% recorded in the prior year.
Net income of $50.2 million in 1996 was 11% higher than the net income
of $45.3 million in 1995. Earnings per share, adjusted for the three-for-two
stock split described below, were $1.69 in 1996, an increase of 16 cents from
the previous record of $1.53 achieved in 1995.
17
<PAGE> 22
In December 1996 the Company's Board of Directors authorized a three-
for-two stock split to be effected in the form of a 50% stock dividend payable
on January 31, 1997, to shareholders of record on January 15, 1997. The par
value of common stock remained at $.01. Shareholders' equity has been restated
to give retroactive recognition to the stock split for all periods presented by
reclassifying from additional paid-in-capital to common stock the par value of
the additional shares arising from the split. All references in the financial
statements to number of shares, per share amounts and market prices of the
Company's common stock have been restated.
PERFORMANCE IN 1995 COMPARED TO 1994
Orders, sales, net income and earnings per share for 1995 exceeded the
levels achieved in all previous years. Incoming orders were 18% higher than
1994 with about one-quarter of the increase stemming from growth in the
Company's base businesses and the other three-quarters resulting from the
recent acquisitions of Hale Products (May 1994), Micropump (May 1995) and Lukas
(October 1995).
Sales for 1995 of $487.3 million increased $87.8 million or 22% over
1994. The inclusion of recently acquired businesses accounted for 12% of the
volume growth, while sales in the other business units rose 10% over the prior
year. This growth stemmed from a solid U.S. economy, continuous emphasis on
developing international markets, and the addition of several new products. The
increase of international sales accounted for about one half of the year-over-
year improvement.
Fluid Handling Group sales of $347.7 million increased $72.1 million or
26% from 1994. The inclusion of Micropump and Lukas for a portion of the year
along with Hale Products for a full year, and higher sales volume from improved
market conditions in each of the other Fluid Handling Group businesses
accounted for the increase. Sales outside the U.S. increased to 33% of total
Fluid Handling Group sales in 1995 from 30% in 1994 due to the inclusion of
Micropump, Lukas and the international operations of Hale Products for a full
year, and stronger worldwide demand for products of the base businesses in
the Group.
Industrial Products Group sales of $140.0 million increased $15.8
million or 13% compared to 1994 due to improved demand for products of all
business units in this Group. Shipments outside the U.S. were 38% of total
sales in the industrial Products Group in 1995, up from 36% in 1994. This was
principally due to greater international demand for this Group's products,
especially turret punching machines, and banding and clamping devices.
Gross profit of $188.0 million in 1995 increased $35.4 million or 23%
from 1994. Gross profit as a percent of sales rose to 38.6% in 1995, up from
38.2% in 1994. Selling, general and administrative expenses increased to $97.5
million in 1995 from $84.0 million in 1994, but as a percentage of sales
decreased to 20.0% in 1995 compared to 21.0% in 1994. Recent acquisitions
caused goodwill amortization to increase to $4.3 million in 1995 from $3.1
million in 1994. As a percent of sales, goodwill amortization remained below
1% in both years.
Income from operations increased $20.7 million or 32% to $86.2 million
in 1995 from $65.5 million in 1994. Operating margin as a percent of sales
increased to 17.7% in 1995 from 16.4% in 1994. In the Fluid Handing Group,
income from operations of $71.3 million and operating margin of 20.5% for 1995
were both higher than the $55.3 million and 20.1% recorded in 1994. Operating
margin improvements resulted primarily from volume related gains with improving
business conditions in the core businesses of the Group. These factors were
partially offset by inclusion of Micropump and Lukas for a portion of the year,
and a full year of Hale Products activity, all of whose operating margins, as
expected, were somewhat lower than the other units in the Group and whose
profits were further affected by purchase accounting adjustments. Income from
operations in the Industrial Products Group of $23.2 million and operating
margin of 16.6% in 1995 increased from the totals of $18.0 million and 14.5%
achieved in 1994 due primarily to volume related improvements.
Interest expense increased to $15.9 million in 1995 from $13.6 million
in 1994 because of additional borrowings to complete the acquisitions of
Micropump and Lukas, and a slightly higher interest rate environment in 1995.
The provision for income taxes increased to $25.7 million in 1995 from
$18.9 million in 1994. The effective tax rate increased to 36.2% in 1995 from
36.0% in 1994.
Net income of $45.3 million in 1995 was 35% higher than net income of
$33.6 million in 1994. Earnings per share of $1.53 in 1995 increased 34% from
the $1.15 recorded in 1994.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, IDEX's working capital was $108.3 million and its
current ratio was 2.2 to 1. Internally generated funds were more than adequate
to fund capital expenditures of $13.8 million, $13.0 million and $8.9 million
for 1996, 1995 and 1994, respectively, and dividends on common stock of $12.3
million and $10.7 million in 1996 and 1995, respectively. Capital expenditures
were generally for machinery and equipment which improved productivity,
although a portion was for 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. During 1996,
1995 and 1994, depreciation and amortization expense, excluding amortization of
debt issuance expenses, was $22.6 million, $16.5 million and $13.7 million,
respectively.
In July 1996 the Company entered into a multi-currency amended U.S.
credit agreement increasing the maximum amount available to $250 million and
improving the interest rate structure. At December 31, 1996, $160.1 million was
borrowed under this facility,
18
<PAGE> 23
[IDEX 96 LOGO]
including a Netherlands guilder borrowing of 82.0 million ($47.1
million) which provides an economic hedge against the net investment in Fluid
Management's Netherlands operation. The availability under this facility
declines in stages commencing July 1, 1999, to $200 million on July 1, 2000.
Any amount outstanding at July 1, 2001, becomes due at that date. Interest is
payable quarterly on the outstanding balance at the bank agent's reference rate
or at LIBOR plus an applicable margin. At December 31, 1996, the applicable
margin was 50 basis points. The Company also has a $10 million demand line of
credit available for short-term borrowing requirements at the bank agent's
reference rate or at an optional rate based on the bank's cost of funds. At
December 31, 1996, there were no borrowings under this short-term line of
credit.
At December 31, 1996, the maximum amount available under the German
credit agreement was DM 52.5 million ($34.1 million), of which DM 50.0 million
($32.5 million) was being used and provides an economic hedge against the net
investment in the Lukas operation. The availability under this agreement
declines in stages commencing November 1, 1997, to DM 31.3 million at November
1, 2000. Any amount outstanding at November 1, 2001, becomes due at that date.
Interest is payable quarterly on the outstanding balance at LIBOR plus 100
basis points.
On July 29, 1996, IDEX acquired Fluid Management for $135 million,
including IDEX common stock valued at approximately $2 million. The acquisition
was accounted for using the purchase method of accounting and was financed
through a borrowing under the U.S. credit agreement and the issuance of 113,550
shares of IDEX common stock.
In December 1996 the Company's Board of Directors authorized a three-
for-two common stock split and a 12.5% increase in the quarterly cash dividend.
The cash dividend on the post-split shares was set at 12 cents per common share
per calendar quarter. Both the stock dividend and first increased cash dividend
will be paid on January 31, 1997, to shareholders of record on January 15,
1997.
IDEX believes it will generate sufficient cash flow from operations in
1997 to meet its operating requirements, interest and scheduled amortization
payments under both the amended U.S. credit agreement and the German credit
agreement, interest and principal payments on the Senior Subordinated Notes,
approximately $20 million of planned capital expenditures, and approximately
$14 million of annual dividend payments to holders of common stock. From
commencement of operations in January 1988 until December 31, 1996, IDEX has
borrowed $410 million under the credit agreements to complete 10 acquisitions.
During this same period IDEX generated, principally from operations, cash flow
of $307 million to reduce its indebtedness. In the event that suitable
businesses or assets are available for acquisition by IDEX upon terms
acceptable to the Board of Directors, IDEX may obtain all or a portion of the
financing for the acquisitions through the incurrence of additional long-term
indebtedness.
<TABLE>
<CAPTION>
NET SALES BY OPERATING GROUP PROFITS BY OPERATING GROUP
(in millions) (in millions)
Industrial Products Industrial Products
Fluid Handling Fluid Handling
[BAR GRAPH] [BAR GRAPH]
Year Fluid Indust. Year Fluid Indust.
<S> <C> <C> <C> <C>
1988 105 95 1988 26 14
1989 125 97 1989 31 15
1990 134 95 1990 32 12
1991 139 89 1991 32 12
1992 187 90 1992 38 12
1993 213 96 1993 41 14
1994 276 124 1994 55 18
1995 348 140 1995 71 23
1996 423 142 1996 83 23
</TABLE>
19
<PAGE> 24
IDEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share amounts)
<TABLE>
<CAPTION>
As of December 31, 1996 1995
--------- ---------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . $ 5,295 $ 5,937
Receivables - net. . . . . . . . . . . . . . . 91,200 70,338
Inventories . . . . . . . . . . . . . . . . . . 97,516 101,052
Deferred taxes . . . . . . . . . . . . . . . . 4,835 7,045
Other current assets . . . . . . . . . . . . . 2,324 1,527
-------- --------
Total current assets . . . . . . . . . . . . . 201,170 185,899
Property, plant and equipment - net . . . . . . 102,383 91,278
Intangible assets - net . . . . . . . . . . . . 274,511 184,217
Other noncurrent assets . . . . . . . . . . . . 5,709 4,728
-------- --------
Total assets . . . . . . . . . . . . . . . . . $583,773 $466,122
======== ========
LIABILITIES AND SHAREHOLDERS'EQUITY
Current liabilities
Trade accounts payable. . . . . . . . . . . . . $ 40,670 $ 36,846
Dividends payable . . . . . . . . . . . . . . . 3,471 3,061
Accrued expenses. . . . . . . . . . . . . . . . 48,716 42,901
-------- --------
Total current liabilities. . . . . . . . . . . 92,857 82,808
Long-term debt . . . . . . . . . . . . . . . . . 271,709 206,184
Other noncurrent liabilities . . . . . . . . . . 23,698 26,185
-------- --------
Total liabilities. . . . . . . . . . . . . . . 388,264 315,177
-------- --------
Shareholders' equity
Common stock, par value $.01 per share
Shares authorized
1996 - 75,000,000; 1995 - 50,000,000
Shares issued and outstanding
1996 - 28,925,867; 1995 - 28,695,426 . . 289 287
Additional paid-in capital. . . . . . . . . . . 89,657 86,022
Retained earnings . . . . . . . . . . . . . . . 105,238 67,729
Accumulated translation adjustment. . . . . . . 325 (3,093)
-------- --------
Total shareholders' equity . . . . . . . . . . 195,509 150,945
-------- --------
Total liabilities and shareholders' equity . . $583,773 $466,122
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
20
<PAGE> 25
[IDEX LOGO]
IDEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(in thousands except per share amounts)
<TABLE>
<CAPTION>
For the years ended December 31, 1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Net sales ................................. $562,551 $487,336 $399,502
Cost of sales ............................. 346,397 299,315 246,858
-------- -------- --------
Gross profit .............................. 216,154 188,021 152,644
Selling, general and
administrative expenses .................. 111,507 97,486 83,980
Goodwill amortization ..................... 6,342 4,297 3,126
-------- -------- --------
Income from operations .................... 98,305 86,238 65,538
Other income(expense) - net ............... (509) 753 559
-------- -------- --------
Income before interest expense and
income taxes ............................. 97,796 86,991 66,097
Interest expense .......................... 18,942 15,948 13,581
-------- -------- --------
Income before income taxes ................ 78,854 71,043 52,516
Provision for income taxes ................ 28,656 25,718 18,906
-------- -------- --------
Net income ................................ $ 50,198 $ 45,325 $ 33,610
======== ======== ========
Earnings per common share ................. $ 1.69 $ 1.53 $ 1.15
======== ======== ========
Weighted average common shares
outstanding .............................. 29,779 29,609 29,331
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
21
<PAGE> 26
IDEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(in thousands except share and per share amounts)
<TABLE>
<CAPTION>
Common Stock Accumulated Total
and Additional Retained Translation Shareholders'
Paid-In Capital Earnings Adjustment Equity
--------------- -------- ------------ -------------
<S> <C> <C> <C> <C>
Balance, December 31, 1993................. $ 84,840 $ 2,551 $ (3,705) $ 83,686
Issuance of 39,434 shares of common
stock from exercise of stock options..... 294 294
Cash dividends declared -$.09
per common share outstanding ............ (2,671) (2,671)
Unrealized translation adjustment......... 1,386 1,386
Net income................................ 33,610 33,610
------- ------- ------- -------
Balance, December 31, 1994................ 85,134 33,490 (2,319) 116,305
Issuance of 77,461 shares of common stock
from exercise of stock options........... 1,175 1,175
Cash dividends declared - $.39 per common
share outstanding........................ (11,086) (11,086)
Unrealized translation adjustment........ (774) (774)
Net income................................ 45,325 45,325
------- ------- -------- --------
Balance, December 31, 1995................ 86,309 67,729 (3,093) 150,945
Issuance of 113,550 shares of common stock
related to an acquisition................ 2,271 2,271
Issuance of 116,891 shares of common
stock from exercise of stock options..... 1,366 1,366
Cash dividends declared - $.44 per common
share outstanding........................ (12,689) (12,689)
Unrealized translation adjustment......... 3,418 3,418
Net income................................ 50,198 50,198
------ ------- ------- -------
Balance, December 31, 1996................ $ 89,946 $105,238 $ 325 $195,509
========= ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
22
<PAGE> 27
[IDEX LOGO]
IDEX CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the years ended December 31, 1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,198 $ 45,325 $ 33,610
Adjustments to reconcile net income to
net cash flows from operating activities
Depreciation and amortization . . . . . . . . . . . . . . 14,310 10,940 9,671
Amortization of intangibles . . . . . . . . . . . . . . . 8,258 5,558 4,025
Amortization of debt issuance expenses . . . . . . . . . . 640 624 619
Deferred income taxes . . . . . . . . . . . . . . . . . . 5,474 2,297 2,711
Increase in receivables . . . . . . . . . . . . . . . . . (4,124) (5,045) (7,611)
(Increase) decrease in inventories . . . . . . . . . . . . 19,324 (10,222) 415
Increase (decrease) in trade accounts
payable . . . . . . . . . . . . . . . . . . . . . . . . . (3,136) 812 8,292
Increase (decrease) in accrued expenses . . . . . . . . . (2,564) 4,331 141
Other transactions - net . . . . . . . . . . . . . . . . . 4,084 470 654
-------- -------- -------
Net cash flows from operating activities . . . . . . . . . 92,464 55,090 52,527
-------- -------- -------
Cash flows from investing activities
Additions to property, plant and equipment . . . . . . . . . (13,769) (13,002) (8,896)
Acquisition of businesses
(net of cash acquired) . . . . . . . . . . . . . . . . . . (132,584) (69,760) (91,558)
-------- -------- --------
Net cash flows from investing activities . . . . . . . . (146,353) (82,762) (100,454)
-------- -------- --------
Cash flows from financing activities
Dividends paid . . . . . . . . . . . . . . . . . . . . . . (12,278) (10,697)
Net borrowings under the credit agreements . . . . . . . . 64,586 37,968 50,000
Increase in accrued interest . . . . . . . . . . . . . . . . 939 50 702
-------- -------- --------
Net cash flows from financing activities . . . . . . . . . 53,247 27,321 50,702
-------- -------- --------
Net increase (decrease) in cash . . . . . . . . . . . . . . . (642) (351) 2,775
Cash and cash equivalents at beginning of year. . . . . . . . . 5,937 6,288 3,513
-------- -------- --------
Cash and cash equivalents at end of year. . . . . . . . . . . . $ 5,295 $ 5,937 $ 6,288
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
23
<PAGE> 28
IDEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share amounts)
1. SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
IDEX Corporation ("IDEX" or the "Company") is a manufacturer of a wide
array of proprietary, engineered industrial products sold to a diverse
customer base in a variety of industries in the U.S. and internationally. Its
products include industrial pumps and controls; fire-fighting pumps and rescue
equipment; dispensing and mixing equipment; stainless steel banding, clamping
and sign-mounting devices; sheet metal fabricating equipment and tooling;
automatic lubrication systems; small-horsepower compressors; and energy
absorption equipment. These activities are grouped into two business segments:
Fluid Handling and Industrial Products.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the Company and its
subsidiaries. Significant intercompany transactions and accounts have been
eliminated.
CASH EQUIVALENTS
For purposes of the Statements of Consolidated Cash Flows, the Company
considers all highly liquid debt instruments purchased with a maturity of three
or fewer months to be cash equivalents.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost, which
includes labor, material and factory overhead, is determined on the first-in,
first-out ("FIFO") basis or the last-in, first-out ("LIFO")basis, as described
in Note 3.
DEBT EXPENSES
Expenses incurred in securing and issuing long-term debt are amortized
over the life of the related debt.
EARNINGS PER COMMON SHARE
Earnings per common share are computed by dividing net income by the
weighted average number of shares of common stock and common stock equivalents
outstanding during the year. Common stock equivalents, in the form of stock
options, have been included in the calculation of weighted average shares
outstanding using the treasury stock method. All share and per share data have
been restated for the three-for-two stock split effected in the form of a stock
dividend in January 1997.
DEPRECIATION AND AMORTIZATION
Depreciation is recorded using the straight-line method. The estimated
useful lives used in computation of depreciation generally are as follows:
Land improvements.....................................10 to 12 years
Buildings and improvements............................ 3 to 30 years
Machinery and equipment, tooling
and engineering drawings............................. 3 to 12 years
Office equipment, mobile
equipment and motor vehicles......................... 3 to 10 years
Identifiable intangible assets are amortized over their estimated
useful lives using the straight-line method. The cost in excess of net assets
acquired is amortized on a straight-line basis over a period of 30 to 40 years.
The carrying amount of all long-lived assets is evaluated annually to
determine if adjustment to the depreciation and amortization period or to the
unamortized balance is warranted.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities, and reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
2. SUPPLEMENTAL CASH FLOW INFORMATION
A summary of supplemental cash flow information follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash paid for -
Interest.................................... $ 17,363 $ 15,303 $ 12,007
Income taxes................................ 23,857 21,793 16,608
Noncash investing activities -
Liabilities assumed in
connection with acquisition
of businesses:
Fair value of assets acquired.............. $ 51,055 $ 50,218 $ 47,187
Cost in excess of
net assets acquired....................... 101,473 34,386 63,069
Cash paid.................................. (132,584) (69,760) (91,558)
Common stock issued
in connection with
acquisitions.............................. (2,271)
------- ------- -------
Liabilities assumed........................... $ 17,673 $ 14,844 $ 18,698
======= ======= =======
</TABLE>
3. BALANCE SHEET COMPONENTS
The components of inventories as of December 31, 1996 and 1995 were:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Raw materials..................................... $16,946 $ 13,978
Work in process................................... 14,909 15,434
Finished goods.................................... 65,661 71,640
------- --------
Total.......................................... $97,516 $101,052
======= ========
</TABLE>
Those inventories which were carried on a LIFO basis amounted to
$62,068 and $57,409 at December 31, 1996 and 1995, respectively. The excess of
current cost over LIFO inventory value and the impact on earnings of using the
LIFO method are not material.
24
<PAGE> 29
[IDEX LOGO]
The components of certain other balance sheet accounts as of December
31, 1996 and 1995 were:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Receivables
Customers.................................. $ 88,838 $ 71,424
Other...................................... 4,749 1,073
-------- --------
Total..................................... 93,587 72,497
Less allowance for doubtful accounts....... 2,387 2,159
-------- --------
Receivables - net......................... $ 91,200 $ 70,338
======== ========
Property, plant and equipment, at cost
Land and improvements...................... $ 8,090 $ 8,836
Buildings and improvements................. 55,988 51,708
Machinery and equipment.................... 139,769 130,518
Engineering drawings....................... 9,592 9,383
Office equipment........................... 21,857 16,074
Mobile equipment and motor vehicles 2,294 2,353
Construction in progress................... 1,058 2,386
-------- --------
Total..................................... 238,648 221,258
Less accumulated depreciation
and amortization.......................... 136,265 129,980
-------- --------
Property, plant and equipment - net....... $102,383 $ 91,278
======== ========
Intangible assets
Cost in excess of net assets acquired...... $282,972 $186,928
Other...................................... 28,904 26,283
-------- --------
Total..................................... 311,876 213,211
Less accumulated amortization.............. 37,365 28,994
-------- --------
Intangible assets - net................... $274,511 $184,217
======== ========
Accrued expenses
Accrued payroll and related items.......... $ 22,088 $ 20,229
Accrued taxes.............................. 6,308 7,537
Accrued insurance.......................... 2,959 2,555
Other accrued liabilities.................. 17,361 12,580
-------- --------
Total..................................... $ 48,716 $ 42,901
======== ========
Other noncurrent liabilities
Pension and retiree medical reserves....... $ 15,182 $ 15,078
Lease obligations.......................... 2,265 2,328
Other noncurrent liabilities............... 6,251 8,779
-------- --------
Total..................................... $ 23,698 $ 26,185
======== ========
</TABLE>
4. LEASE COMMITMENTS
At December 31, 1996, total minimum rental payments under noncancelable
operating leases, primarily for office facilities, warehouses and data
processing equipment, were $20.4 million. The future minimum rental
commitments for each of the next five years are as follows: 1997 -- $4.8
million; 1998 -- $3.7 million; 1999 -- $2.9 million; 2000 -- $2.3 million; 2001
- -- $1.6 million; threafter -- $5.1 million.
Rental expense totaled $5.9 million, $4.8 million and $4.4 million for
the years ended December 31, 1996, 1995 and 1994, respectively.
5. RETIREMENT BENEFITS
The Company has a number of noncontributory defined benefit and defined
contribution pension plans covering substantially all employees, other than
certain bargaining unit employees who participate in a multiemployer pension
plan. The defined benefit plans covering salaried employees provide pension
benefits that are based on compensation over an employee's full career. The
defined benefit plans covering hourly employees and bargaining unit members
generally provide benefits of stated amounts for each year of service. The
Company's funding policy for these plans is to fund benefits as accrued within
the minimum and maximum limitations of the Internal Revenue Code. The defined
contribution plans provide for annual contributions to individuals' accounts.
The level of the contribution is generally a percent of salary based on age and
years of service.
Pension costs for the years ended December 31, 1996, 1995 and 1994
included the following components:
<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Service cost -- benefits earned
during the period................ $ 3,200 $ 2,214 $ 2,382
Interest cost on projected
benefit obligation............... 4,112 2,908 2,874
Actual return on assets........... (8,509) (8,172) 1,621
Net amortization and deferral..... 4,997 5,407 (4,177)
------- ------- -------
Net periodic pension cost........ 3,800 2,357 2,700
Contributions to multiemployer
plan, defined contribution
plans and other.................. 3,538 2,780 2,495
------- ------- -------
Total pension costs............. $ 7,338 $ 5,137 $ 5,195
======= ======= =======
Assumptions used in accounting for pension costs at
December 31, were:
Assumed discount rate ............ 7.50% 7.25% 8.50%
Assumed rate of
compensation increase
for salaried plans............... 4.0 % 4.0 % 4.0 %
Expected rate of return on
plan assets...................... 9.0 % 8.0 % 8.0 %
</TABLE>
25
<PAGE> 30
The funded status of the defined benefit plans and amounts recognized
in the Company's consolidated balance sheets at December 31, 1996 and 1995 are
presented below:
<TABLE>
<CAPTION>
U.S. PLANS NON-U.S.
------------ --------
ASSETS ACCUMULATED ACCUMULATED
EXCEED BENEFITS BENEFITS
ACCUMULATED EXCEED EXCEED
BENEFITS ASSETS ASSETS
----------- ------- -------
<S> <C> <C> <C>
DECEMBER 31, 1996
Actuarial present value of benefit obligations
Vested benefit obligation......................... $34,543 $ 9,722 $ 8,471
======= ======= =======
Accumulated benefit obligation.................... $37,871 $10,395 $ 8,504
======= ======= =======
Projected benefit obligation....................... $44,433 $10,522 $ 8,892
Plan assets at fair value (1)...................... 43,807 4,816 4,196
------- ------- -------
Projected benefit obligation
in excess of plan assets.......................... (626) (5,706) (4,696)
Prior service cost not yet recognized.............. 3,217 572
Unrecognized net obligaton at
date of transition (2)............................ (1,071) 691
Unrecognized net (gain) loss....................... (1,741) 1,594 (365)
------- ------- -------
Pension liability................................. $ (221) $(2,849) $(5,061)
======= ======= =======
DECEMBER 31, 1995
Actuarial present value of benefit obligations
Vested benefit obligation......................... $24,539 $ 8,685 $ 8,017
======= ======= =======
Accumulated benefit obligation.................... $26,279 $ 9,407 $ 8,017
======= ======= =======
Projected benefit obligation....................... $37,413 $ 9,719 $ 8,315
Plan assets at fair value (1)...................... 37,967 3,644 3,286
------- ------- -------
Projected benefit obligation less than
(in excess of) plan assets........................ 554 (6,075) (5,029)
Prior service cost not yet recognized.............. 2,101 433
Unrecognized net obligaton at
date of transition (2)............................ (1,292) 720
Unrecognized net (gain) loss....................... (659) 2,253 (326)
------- ------- -------
Pension liability................................. $ 704 $(2,669) $(5,355)
======= ======= =======
</TABLE>
(1) Primarily listed stocks and publicly traded fixed income securities.
(2) Amortized by plan over the greater of the average remaining service period
of the employee workforce of 15 years.
6. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
The Company provides health care and life insurance benefits to certain
retired employees, their covered dependents and beneficiaries. The Company
provides for the estimated cost of such retiree benefit payments during the
employee's active service period.
Net periodic postretirement expense for 1996, 1995 and 1994 includes the
following components:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Service cost -- benefits earned
during the period..................... $ 310 $ 264 $341
Interest cost on accumulated
postretirement benefit obligation 528 582 655
Net amortization and deferral.......... (272) (260) (66)
----- ----- ----
Total cost............................ (566) $ 586 $930
===== ===== ====
</TABLE>
The Company's postretirement benefit plans are not funded. The
accumulated postretirement benefit obligation (APBO) of the plans at December
31, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Retirees............................... $ 2,595 $ 3,069
Fully eligible active participants..... 651 797
Other active participants.............. 5,123 4,974
------- -------
Total APBO............................ 8,369 8,840
Unrecognized gain...................... 1,838 1,149
------- -------
Accrued postretirement
health care costs.................... $10,207 $ 9,989
======= =======
</TABLE>
For measurement purposes, a 12% annual rate of increase in the cost of
covered health care benefits was assumed for 1996, gradually declining to 6% by
the year 2008 and remaining at that level thereafter. The health care trend
rate assumption has a significant effect on the amount of the obligation and the
net periodic cost reported. An increase or decrease of the trend rate of 1%
would change the accumulated postretirement benefit obligation as of December
31, 1996 by $1.2 million and the net periodic cost for this year by $.1
million. The assumed discount rate used in determining the accumulated
postretirement benefit obligation was 7.5% in 1996 and 7.25% in 1995.
7. LONG-TERM DEBT
Long-term debt at December 31, 1996 and 1995 consisted of the
following:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Bank revolving credit facilities,
including accrued interest........ $196,709 $131,184
9-3/4% Senior Subordinated Notes.... 75,000 75,000
-------- --------
Long-term debt.................... $271,709 $206,184
======== ========
</TABLE>
In July 1996 the Company entered into a multicurrency amended and
restated domestic bank revolving credit facility (the "U.S. Agreement")
increasing the maximum availability to $250 million and improving the interest
rate structure. The availability under the U.S. Agreement declines in stages
commencing July 1, 1999, to $200 million at July 1, 2000. Any amount
outstanding at July 1, 2001, becomes due at that date. At December 31, 1996,
$160.1 million of the maximum availability was being used, including a
Netherlands guilder borrowing of 82.0 million ($47.1 million). Interest on the
outstanding borrowings under the U.S. Agreement is payable quarterly at a rate
based on the bank agent's reference rate or, at the Company's election, at a
rate based on LIBOR plus 50 basis points per annum. The weighted average
interest rate on outstanding borrowings under the U.S. Agreement was 6.0% at
December 31, 1996. A facility fee equal to 15 basis points per annum is payable
quarterly on the entire $250 million available under the U.S. Agreement. In
July 1996 IDEX borrowed $133 million under the U.S. Agreement to finance the
acquisition of the Fluid Management (see Note 13). In September 1996 the
Company entered into a $10 million demand line of credit expiring on June 1,
1997, for short-term borrowing requirements at the bank agent's reference rate,
or at an optional rate based on the bank's cost of funds. At December 31, 1996,
there were no borrowings under this short-term line of credit.
26
<PAGE> 31
[IDEX LOGO]
A DM 52.5 million ($34.1 million) credit facility (the "German
Agreement"), entered into by Lukas Hydraulik GmbH KG and guaranteed by IDEX,
declines in stages commencing November 1, 1997, to DM 31.3 million at November
1, 2000. Any amount outstanding at November 1, 2001, becomes due at the date.
At December 31, 1996, DM 50.0 million ($32.5 million) was being used. Interest
is payable quarterly on the outstanding balance at LIBOR plus 100 basis points
per annum.
Total long-term debt outstanding at December 31, 1996 and 1995 includes
$4.2 million and $3.2 million, respectively, of accrued interest as interest is
generally paid through borrowings under the U.S. Agreement.
Borrowings under the U.S. Agreement are guaranteed jointly and
severally by certain of the Company's subsidiaries and secured by a pledge of
their stock and intercompany notes.
The Company's $75 million of Senior Subordinated Notes ("Notes") due
2002 are jointly and severally guaranteed by certain of the Company's
subsidiaries and are subordinated to the U.S. Agreement. Interest is payable
semiannually at the rate of 9-3/4% per annum. The Notes are payable in annual
installments of $18.75 million commencing in 2000 and are redeemable at various
premiums by the Company commencing in 1997. At December 31, 1996, the fair
market value of the Notes is approximately $78 million based on the quoted
market price.
The U.S. Agreement and the Indenture for the Notes permit the payment
of cash dividends only to the extent that no default exists under such
agreements and limit the amount of such dividends in accordance with specified
formulas. At December 31, 1996, cash available for dividends on common stock
for 1997 is limited to approximately $54.3 million under the most restrictive
of these provisions.
8. CONTINGENCIES
The Company is involved in certain litigation arising in the ordinary
course of business. None of these matters is expected to have a material
adverse effect on the Company's financial position or results of operations.
However, the ultimate resolution of these matters could result in a change in
the Company's estimates of its liability for these matters.
9. COMMON AND PREFERRED STOCK
On December 19, 1996, the Company's Board of Directors authorized a
three-for-two common stock split to be effected in the form of a 50% stock
dividend payable on January 31 1997, to shareholders of record on January 15,
1997. Par value of common stock remained at $.01 per share. Shareholders'
equity has been restated to give retroactive recognition to the stock split for
all periods presented by reclassifying from additional paid-in capital to
common stock the par value for the additional shares arising from the split.
All references in the financial statements to number of shares, per share
amounts and market prices of the Company's common stock have been restated.
At December 31, 1996 and 1995, the Company had five million shares of
preferred stock authorized but unissued.
10. STOCK OPTIONS
The Company has stock option plans providing for the grant of options
to purchase common shares to outside directors, executives and certain key
employees using the intrinsic value method. Accordingly, no compensation cost
has been recognized. In October 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" which the Company adopted in 1996. The Company
retained the intrinsic value method of accounting for stock based compensation
expense with certain additional disclosures as allowed by the statement. Had
compensation cost been determined using the fair value method the Company's net
income and earnings per common share (EPS) would have been as follows:
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C> <C>
Net income As reported $50,198 $45,325
Pro forma 49,312 45,022
Primary EPS As reported 1.69 1.53
Pro forma 1.66 1.52
</TABLE>
The fair value of each option grant was estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions for
1996 and 1995, respectively: dividend yield of 1.7% and 1.86%; volatility of
28.6% and 29.7%; risk-free interest rates of 6.2% and 6.9%; and expected lives
of 5-1/2 years.
The Compensation Committee of the Board of Directors administers the
plans and approves stock option grants. The Company may grant options for up to
five million shares. Stock options granted under the plans are exercisable at a
price equal to the market value of the stock at the date of grant. The options
become exercisable from one to five years from the date of grant and generally
expire 10 years from the date of grant. The following table summarizes option
activity under the plans:
<TABLE>
<CAPTION>
Weighted
Number Average
of Option Price
Options Per Share
--------- ----------
<S> <C> <C>
Outstanding at December 31,1993 1,316,280 $ 7.18
Granted........................................ 437,738 16.57
Exercised...................................... (39,434) 3.37
Forfeited ..................................... (87,120) 12.40
---------
Outstanding at December 31, 1994 1,627,464 9.52
Granted........................................ 336,600 20.08
Exercised...................................... (77,461) 10.45
Forfeited ..................................... (31,995) 14.51
---------
Outstanding at December 31, 1995 1,854,608 11.27
Granted........................................ 442,875 25.56
Exercised...................................... (116,891) 6.32
Forfeited ..................................... (45,900) 20.63
---------
Outstanding at December 31, 1996................ 2,134,692 14.27
==========
Exercisable at December 31, 1994................ 625,606 3.50
==========
Exercisable at December 31, 1995................ 786,576 5.59
==========
Exercisable at December 31, 1996................ 953,482 8.38
==========
</TABLE>
27
<PAGE> 32
The following table summarizes information about options outstanding at
December 31, 1996:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
---------------------------------- ----------------------
Weighted
Average Weighted Weighted
Range of Remaining Average Average
Exercise Number Life of Exercise Number Exercise
Prices Outstanding Contract Price Exercisable Price
- --------- ----------- --------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
$ 0 to 7 447,014 1.7 years $ 1.26 447,014 $ 1.26
8 to 19 962,835 6.6 years 13.56 437,978 13.75
20 to 28 724,843 8.9 years 23.25 68,490 20.50
--------- -------
$ 0 to 28 2,134,692 6.4 years $14.27 953,482 $ 8.38
========= =======
</TABLE>
11. BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
IDEX consists of two business segments: Fluid Handling and Industrial
Products. No single customer accounted for more than 2% of consolidated sales.
Segment information for the years ended December 31, 1996, 1995 and 1994
is presented under "Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Information about the Company's operations in different geographical
regions for the years ended December 31, 1996, 1995 and 1994 is shown below. The
Company's primary areas of operation outside the U.S. include North America,
Europe and the Far East.
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Sales
North America................ $426,747 $401,654 $342,695
Europe....................... 130,042 80,415 52,323
Other........................ 5,762 5,267 4,484
-------- -------- --------
Total...................... $562,551 $487,336 $399,502
======== ======== ========
Income from operations
North America................ $ 77,134 $ 73,724 $ 57,125
Europe....................... 20,296 11,528 7,434
Other........................ 875 986 979
-------- -------- --------
Total...................... $ 98,305 $ 86,238 $ 65,538
======== ======== ========
Identifiable assets
North America................ $415,854 $357,393 $315,219
Europe....................... 160,161 106,457 53,580
Other........................ 7,758 2,272 2,297
-------- -------- --------
Total...................... $583,773 $466,122 $371,096
======== ======== ========
</TABLE>
Export sales from the U.S. for the years ended December 31, 1996, 1995
and 1994 were to the following geographical areas:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
North America....... $ 22,055 $ 20,537 $ 21,911
South America....... 13,627 8,947 6,009
Europe.............. 12,358 10,339 8,068
Far East............ 21,928 21,952 12,347
Other............... 17,950 15,247 15,413
-------- -------- --------
Total............. $ 87,918 $ 72,022 $ 63,748
======== ======== ========
</TABLE>
12. INCOME TAXES
Pretax income for the years ended December 31, 1996, 1995 and 1994 was taxed
under the following jurisdictions:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Domestic............... $ 59,104 $ 56,969 $ 45,263
Foreign................ 19,750 14,074 7,253
-------- -------- --------
Total................ $ 78,854 $ 71,043 $ 52,516
======== ======== ========
</TABLE>
The provision for income taxes for the years ended December 31, 1996,
1995 and 1994 was as follows:
<TABLE>
<S> <C> <C> <C>
Current
U.S. ................ $ 17,657 $ 19,369 $ 13,007
State and local...... 1,398 1,326 841
Foreign.............. 4,127 2,726 2,550
-------- -------- --------
Total current....... 23,182 23,421 16,398
-------- -------- --------
Deferred
U.S. ................ 2,884 438 2,579
State and local...... 125 (189) 537
Foreign.............. 2,465 2,048 (608)
-------- -------- --------
Total deferred...... 5,474 2,297 2,508
-------- -------- --------
Total provision for
income taxes...... $ 28,656 $ 25,718 $ 18,906
======== ======== ========
</TABLE>
Deferred (prepaid) income taxes result from the following:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Employee and retiree
benefit plans......... $ 147 $ 228 $ 61
Depreciation and
amortization.......... 1,195 474 1,284
Inventories............ 699 (607) 636
Allowances and accruals 4,053 1,785 (262)
Financing.............. (100) (86) 1,041
Other.................. (520) 503 (252)
-------- -------- --------
Total deferred
tax provision $5,474 $ 2,297 $ 2,508
======== ======== ========
</TABLE>
28
<PAGE> 33
[IDEX LOGO]
Deferred tax assets (liabilities) comprise the following at December 31,
1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
------- --------
<S> <C> <C>
Employee and retiree
benefit plans........................ $ 6,769 $ 6,839
Depreciation and amortization.......... (10,284) (9,089)
Inventories............................ (536) (170)
Allowances and accruals................ 5,970 8,898
Financing.............................. (312) (412)
Other.................................. (330) (832)
-------- --------
Total................................ $ 1,277 $ 5,234
======== ========
</TABLE>
The consolidated balance sheets at December 31, 1996
and 1995 include current deferred tax assets of $4,835
and $7,045, respectively, classified as "Deferred taxes" and
noncurrent deferred tax liabilities of $3,558 and $1,811,
respectively, included in "Other noncurrent liabilities."
The total income tax provision differs from the amount
computed by applying the statutory federal income tax
rate to pretax income. The computed amount and the
differences for the years ended December 31, 1996,
1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------ ------- ------
<S> <C> <C> <C>
Pretax income....................... $78,854 $71,043 $52,516
======= ======= =======
Income tax provision:
Computed amount
at statutory rate
of 35%........................... $27,599 $24,865 $18,381
Foreign sales
corporation....................... (1,091) (918) (657)
Amortization of cost
in excess of net
assets acquired................... 932 904 670
State and local
income tax........................ 1,523 1,137 1,378
Other-net .......................... (307) (270) (866)
------- ------- -------
Total income tax
provision........................ $28,656 $25,718 $18,906
======= ======= =======
</TABLE>
No provision has been made for U.S. or additional
foreign taxes on $12.8 million of undistributed earnings of
foreign subsidiaries which are permanently reinvested. It is
not practical to estimate the amount of additional tax which
might be payable if these earnings were repatriated. However,
the Company believes that U.S. foreign tax credits would,
for the most part, eliminate any aditional U.S. tax and
offset any additional foreign tax.
13. ACQUISITION OF FLUID MANAGEMENT LIMITED PARTNERSHIP
On July 29, 1996, IDEX purchased substantially all of the
net operating assets of Fluid Management Limited Partnership
("FMLP"), a leading worldwide manufacturer of dispensing
and mixing equipment for paints, coatings, inks, colorants and
dyes. The $135 million purchase price was financed through
a borrowing under the U.S. Agreement and the issuance of
113,550 shares of IDEX common stock. The excess of the
purchase price over the fair market value of net assets acquired
of approximately $101.5 million is being amortized over 30 years.
The acquisition has been accounted for by the purchase method
of accounting.
The unaudited pro forma consolidated results of operations
for the years ended December 31, 1996 and 1995, reflecting
the allocation of the purchase price an related financing of the
transactions would have been as follows, assuming that the
FMLP acquisition had occurred at the beginning of each of the
respective periods.
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Net sales..................... $610,862 $572,954
Net income.................... 51,048 47,235
Primary EPS................... 1.71 1.59
</TABLE>
FMLP's financial performance for the period January 1 to
July 29, 1996, prior to the acquisition was adversely affected
by volume-related profit declines in Europe and startup costs
associated with major new product introductions.
14. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the unaudited quarterly results
of operations for the years ended ecember 31, 1996 and 1995:
<TABLE>
<CAPTION>
QUARTER
------------------------------------------------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
<S> <C> <C> <C> <C>
DECEMBER 31, 1996
Net Sales........................... $133,886 $131,169 $140,864 $156,632
Gross profit........................ 51,664 51,053 54,368 59,069
Income from
operations........................ 23,416 23,737 23,746 27,406
Net income.......................... 12,214 12,662 11,829 13,494
Earnings per
common share...................... $ .41 $ .43 $ .40 $ .45
Weighted average
shares outstanding................ 29,726 29,735 29,735 29,711
DECEMBER 31, 1995
Net Sales........................... $116,580 $127,203 $116,807 $126,746
Gross profit........................ 45,073 49,173 44,897 48,878
Income from
operations........................ 20,474 23,147 20,369 22,248
Net income.......................... 10,762 12,319 10,681 11,563
Earnings per
common share...................... $ .37 $ .42 $ .36 $ .39
Weighted average
shares outstanding................ 29,436 29,552 29,762 29,750
</TABLE>
29
<PAGE> 34
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of IDEX Corporation
We have audited the accompanying consolidated balance sheets of IDEX
Corporation and its subsidiaries as of December 31, 1996 and 1995 and the
related statements of consolidated operations, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company and its subsidiaries
at December 31, 1996 and 1995 and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
[SIGNATURE OF Deloitte & Touche LLP]
Deloitte & Touche LLP
Chicago, Illinois
January 21, 1997
MANAGEMENT REPORT
IDEX Corporation's management is responsible for the fair presentation
and consistency of all financial data included in this Annual Report in
accordance with generally accepted accounting principles. Where necessary, the
data reflect management's best estimates and judgments.
Management also is responsible for maintaining a system of internal
accounting controls with the objectives of providing reasonable assurance that
IDEX's assets are safeguarded against material loss from unauthorized use or
disposition and that authorized transactions are properly recorded to permit
the preparation of accurate financial data. Cost benefit judgments are an
important consideration in this regard. The effectiveness of internal controls
is maintained by personnel selection and training, division of
responsibilities, establishment and communication of policies, and ongoing
internal review programs and audits. Management believes that IDEX's system of
internal controls as of December 31, 1996 is effective and adequate to
accomplish the above described objectives.
[SIGNATURE OF Donald N. Boyce]
Donald N. Boyce
Chairman of the Board, President and Chief Executive Officer
[SIGNATURE OF Frank J. Hansen]
Frank J. Hansen
Senior Vice President--Operations and Chief Operating Officer
[SIGNATURE OF Wayne P. Sayatovic]
Wayne P. Sayatovic
Senior Vice President--Finance, Chief Financial Officer and Secretary
Northbrook, Illinois
January 21, 1997
30
<PAGE> 35
BUSINESS UNITS [IDEX LOGO]
[PHOTO] BAND-IT-IDEX, INC.
4799 Dahlia St.
Denver, CO 80216
(303) 320-4555
P. PETER MERKEL, JR.
President
Age: 63
Years of Service: 24
[PHOTO] CORKEN, INC.
3805 N.W. 36th St.
Oklahoma City,
OK 73112
(405) 946-5576
JEFFREY L. HOHMAN
President
Age: 43
Years of Service: 6
[PHOTO] FLUID MANAGEMENT, INC.
1023 South Wheeling Rd.
Wheeling, IL 60090
(847) 537-0880
DAVID T. WINDMULLER
President
Age: 39
Years of Service: 16
[PHOTO] FLUID MANAGEMENT
EUROPE B.V.
Hub Van Doorneweg 31
2171 KZ Sassenheim
Netherlands
31-252-230604
LEENDERT HELLENBERG
President-
Europe & Asia
Age: 51
Years of Service: 12
[PHOTO] HALE PRODUCTS, INC.
700 Spring Mill Ave.
Conshohocken, PA 19428
(610) 825-6300
WADE H. ROBERTS, JR.
President
Age: 50
Years of Service: 6
- --------------------------------------------------------------------------------
[PHOTO] LUBRIQUIP, INC.
18901 Cranwood Pkwy.
Warrensville Heights,
OH 44128
(216) 581-2000
MARK W. BAKER
President
Age: 48
Years of Service: 18
[PHOTO] MICROPUMP, INC.
1402 N.E. 136th Ave.
Vancouver, WA 98684
(306) 253-2008
JAMES R. FLUHARTY
President
Age: 53
Years of Service: 6
[PHOTO] PULSAFEEDER, INC.
2883 Brighton-
Henrietta Town Line Rd.
Rochester, NY 14623
(716) 292-8000
RODNEY L. USHER
President
Age: 51
Years of Service: 16
[PHOTO] SIGNFIX LIMITED
Bath Rd., Upper Langford
Bristol BS18 7DJ
England
44(0)1934 852888
ROGER N. GIBBINS
Managing Director
Age: 51
Years of Service: 12
- --------------------------------------------------------------------------------
[PHOTO] STRIPPIT, INC.
12975 Clarence
Center Rd.
Akron, NY 14001
(716) 542-4511
JOHN P. SNOW
President
Age: 52
Years of Service: 20
[PHOTO] VIBRATECH, INC.
11980 Walden Ave.
Alden, NY 14004
(716) 937-6600
RALPH N. YORIO
President
Age: 50
Years of Service: 10
[PHOTO] VIKING PUMP, INC.
406 State St.
Cedar Falls, IA 50613
(319) 266-1741
JOHN L. MCMURRAY
President
Age: 46
Years of Service: 4
[PHOTO] WARREN RUPP, INC.
800 North Main St.
Mansfield, OH 44902
(419) 524-8388
JEFFREY F. FEHR
President
Age: 45
Years of Service: 5
NOTE: Years of service includes periods prior to acquisition by IDEX.
31
<PAGE> 36
CORPORATE OFFICERS AND DIRECTORS
[PHOTO]
From Left to Right: Wade H. Roberts, Jr., Douglas C. Lennox, P. Peter Merkel,
Jr., Mark W. Baker, Donald N. Boyce, Frank J. Hansen, Wayne P. Sayatovic,
Clinton L. Kooman, Jerry N. Derck
CORPORATE OFFICERS
DONALD N. BOYCE
Chairman of the Board,
President and Chief
Executive Officer
Age: 58
Years of Service: 27
FRANK J. HANSEN
Senior Vice President -
Operations and Chief
Operating Officer
Age: 55
Years of Service: 21
WAYNE P. SAYATOVIC
Senior Vice President -
Finance,Chief Financial
Officer and Secretary
Age: 50
Years of Service: 24
MARK W. BAKER
Vice President -
Group Executive
Age: 48
Years of Service: 18
JERRY N. DERCK
Vice President -
Human Resources
Age: 49
Years of Service: 4
P. PETER MERKEL, Jr.
Vice President -
Group Executive
Age: 63
Years of Service: 24
WADE H. ROBERTS, JR.
Vice President -
Group Executive
Age: 50
Years of Service: 6
CLINTON L. KOOMAN
Controller
Age: 53
Years of Service: 32
DOUGLAS C. LENNOX
Treasurer
Age: 44
Years of Service: 17
Member of:
+ Executive Committee
* Audit Committee
# Compensation Committee
NOTE: Years of service for
corporate officers includes
periods prior to acquisition.
DIRECTORS
DONALD N. BOYCE +
Chairman of the Board,
President and Chief
Executive Officer
IDEX Corporation
Northbrook, Illinois
Age: 58
Years of Service: 9
RICHARD E. HEATH
Partner
Hodgson, Russ, Andrews,
Woods & Goodyear
Buffalo, New York
Age: 66
Years of Service: 8
HENRY R. KRAVIS
General Partner
Kohlberg Kravis Roberts & Co.
New York, New York
Age: 52
Years of Service: 9
WILLIAM H. LUERS *#
President
Metropolitan Museum of Art
New York, New York
Age: 67
Years of Service: 8
PAUL E. RAETHER
General Partner
Kohlberg Kravis Roberts & Co.
New York, New York
Age: 50
Years of Service: 9
CLIFTON S. ROBBINS +
General Partner
Kohlberg Kravis Roberts & Co.
New York, New York
Age: 38
Years of Service: 9
GEORGE R. ROBERTS
General Partner
Kohlberg Kravis Roberts & Co.
San Francisco, California
Age: 53
Years of Service: 9
NEIL A. SPRINGER *#
Managing Director
Springer Souder & Assoc. L.L.C.
Chicago, Illinois
Age: 58
Years of Service: 7
MICHAEL T. TOKARZ +
General Partner
Kohlberg Kravis Roberts & Co.
New York, New York
Age: 47
Years of Service: 9
32
<PAGE> 37
[IDEX LOGO]
SHAREHOLDER INFORMATION
CORPORATE EXECUTIVE
OFFICES
IDEX Corporation
630 Dundee Road
Northbrook, Illinois 60062
(847) 498-7070
INVESTOR INFORMATION
Shareholders and prospective investors are welcome to call or write with
questions or requests for additional information. Please direct inquiries to:
Wayne P. Sayatovic, Senior Vice President - Finance, Chief Financial Officer
and Secretary. News releases and other background information are available at
no charge by calling 1-800-758-5804, ext. 110769 for fax service, or under
http://www.prnewswire.com on the Internet.
REGISTRAR AND TRANSFER AGENT
Inquiries about stock transfers or address changes should be directed to:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60690
(312) 461-2288
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two Prudential Plaza
180 North Stetson Avenue
Chicago, Illinois 60601
DIVIDEND POLICY
IDEX increased the quarterly dividend on its common stock beginning January 31,
1997 to $.12 per post-split share per calendar quarter, up 12.5% from last
year's dividend. The declaration of future dividends is within the discretion
of the Board of Directors and will depend upon, among other things, business
conditions, earnings, and IDEX's financial condition. See Notes 7 and 9 of
the Notes to Consolidated Financial Statements.
STOCK MARKET INFORMATION
IDEX common stock was held by 1,305 shareholders at December 31, 1996,
and is traded on the New York Stock Exchange and the Chicago Stock Exchange
under the ticker symbol IEX.
FORM 10-K
Shareholders may obtain a copy of the Form 10-K filed with the Securities and
Exchange Commission by directing a request to IDEX.
ANNUAL MEETING
The Annual Meeting of IDEX Shareholders will be held on Tuesday, March 25, 1997
at 10:00 a.m. in the Shareholders Room of Bank of America Illinois, 231 South
LaSalle Street, Chicago, Illinois 60697.
STOCK HISTORY
QUARTERLY CLOSING PRICES
[BAR GRAPH]
1989 7.5
1990 4.75
1991 7.5
1992 10.5
1993 15.88
1994 18.75
1995 27.13
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTERLY STOCK PRICE QUARTER QUARTER QUARTER QUARTER
<S> <C> <C> <C> <C>
1996 High 27 5/8 27 3/8 26 1/8 26 3/4
Low 24 1/4 25 19 7/8 22
Close 25 7/8 25 3/8 22 1/8 26 5/8
1995 High 20 5/8 23 1/8 29 1/2 28 7/8
Low 18 3/8 19 1/8 22 3/8 24 3/8
Close 19 7/8 22 3/8 23 7/8 27 1/8
</TABLE>
33
<PAGE> 38
[IDEX LOGO]
IDEX CORPORATION
630 Dundee Road
Northbrook, Illinois 60062
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF IDEX CORPORATION
December 31, 1996
<TABLE>
<CAPTION>
OTHER NAME
JURISDICTION OF WHICH DOING BUSINESS
SUBSIDIARY INCORPORATION IF ANY
- ---------- --------------- --------------------
<S> <C> <C>
BAND-IT-IDEX, INC. DELAWARE
BAND-IT COMPANY LTD. UNITED KINGDOM
BAND-IT CLAMPS (ASIA) PTE. LTD. SINGAPORE
CORKEN, INC. DELAWARE
FMI MANAGEMENT COMPANY DELAWARE
FLUID MANAGEMENT, INC. DELAWARE
FLUID MANAGEMENT EUROPE B.V. NETHERLANDS
FLUID MANAGEMENT U.K. LTD. UNITED KINGDOM
FLUID MANAGEMENT FRANCE SARL FRANCE
FLUID MANAGEMENT ESPNANA SLU SPAIN
FLUID MANAGEMENT SCANDINAVIA AB SWEDEN
FLUID MANAGEMENT GmbH GERMANY
FLUID MANAGEMENT AUSTRALIA PTY.LTD. AUSTRALIA
FLUID MANAGEMENT SERVICES, INC.
FLUID MANAGEMENT CANADA CANADA
FLUID MANAGEMENT SERVICOS e VENDES BRAZIL
HALE PRODUCTS, INC. PENNSYLVANIA
HALE PRODUCTS EUROPE GmbH GERMANY
GODIVA PRODUCTS LTD. UNITED KINGDOM
SEITHAL LIMITED UNITED KINGDOM
GODIVA GROUP LTD. UNITED KINGDOM
GINSWAT LTD. HONG KONG
DUNJA GERMANY
LUKAS HYDRAULIK GmbH GERMANY
LUBRIQUIP, INC. DELAWARE
KLS LUBRIQUIP, INC. WISCONSIN
MICROPUMP, INC. DELAWARE
MM HOLDING CO. DELAWARE
CONSIS, LLC WASHINGTON
MICROPUMP LIMITED UNITED KINGDOM
PULSAFEEDER, INC. DELAWARE
PULSAFEEDER PTE. LTD. SINGAPORE
SIGNFIX HOLDINGS LIMITED UNITED KINGDOM
SIGNFIX LIMITED UNITED KINGDOM
TESPA FRANCE SARL FRANCE
TESPA GmbH GERMANY
STRIPPIT, INC. DELAWARE BURGMASTER
STRIPPIT LIMITED UNITED KINGDOM
STRIPPIT S.A. FRANCE
VIBRATECH, INC. DELAWARE
</TABLE>
<PAGE> 2
SUBSIDIARIES OF IDEX CORPORATION
December 31, 1996
<TABLE>
<CAPTION>
OTHER NAME
JURISDICTION OF WHICH DOING BUSINESS
SUBSIDIARY INCORPORATION IF ANY
- ---------- --------------- --------------------
<S> <C> <C>
VIKING PUMP, INC. DELAWARE
VIKING PUMP INTERNATIONAL, INC. DELAWARE
VIKING PUMP (EUROPE) LTD. IRELAND
JOHNSON PUMP (UK) LTD. UNITED KINGDOM
VIKING PUMP OF CANADA, INC. ONTARIO
WARREN RUPP, INC. DELAWARE MARATHON PUMP COMPANY
WARREN RUPP (EUROPE) LTD. IRELAND
IDEX FOREIGN SALES CORP. BARBADOS
</TABLE>
<PAGE> 1
EXHIBIT 24
INDEPENDENT AUDITORS' CONSENT
IDEX Corporation:
We consent to the incorporation by reference in the Registration Statements
(File Numbers 33-47678, 33-56586, 33-67688 and 333-18643) of IDEX Corporation
on Form S-8 of our reports dated January 21, 1997, appearing in and
incorporated by reference in the Annual Report on Form 10-K of IDEX Corporation
for the year ended December 31, 1996.
/S/Deloitte & Touche LLP
- -----------------------------
Deloitte & Touche LLP
Chicago, Illinois
January 21, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,295
<SECURITIES> 0
<RECEIVABLES> 93,587
<ALLOWANCES> 2,387
<INVENTORY> 97,516
<CURRENT-ASSETS> 201,170
<PP&E> 238,648
<DEPRECIATION> 136,265
<TOTAL-ASSETS> 583,773
<CURRENT-LIABILITIES> 92,857
<BONDS> 271,709
0
0
<COMMON> 289
<OTHER-SE> 195,220
<TOTAL-LIABILITY-AND-EQUITY> 583,773
<SALES> 562,551
<TOTAL-REVENUES> 562,551
<CGS> 346,397
<TOTAL-COSTS> 464,246
<OTHER-EXPENSES> (509)
<LOSS-PROVISION> 1,623
<INTEREST-EXPENSE> 18,942
<INCOME-PRETAX> 78,854
<INCOME-TAX> 28,656
<INCOME-CONTINUING> 50,198
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50,198
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 0
</TABLE>
