IDEX Corporation Annual Meeting: CEO Discusses Current Business Environment; Shareholders Elect Tokarz As A Director
IDEX Corporation (NYSE: IEX) Chairman, President and Chief Executive Officer Dennis K. Williams told shareholders at the company's annual meeting, "Due to weakness in the economy, we saw no significant recovery in our markets throughout the 2002 year.
While business was clearly better last year than it was in the second half of 2001, our level of orders for the last four quarters has remained flat. Our focus on operational excellence has driven improvements in all businesses and is rapidly becoming part of the IDEX culture. This allowed us to expand gross margins by 1.6 percentage points year-over-year and produce another record year in cash flow, while providing the freedom to invest in new products and markets."
On January 23, the company reported sales for 2002 increased 2 percent to $742.0 million from $726.9 million in 2001. Acquisitions accounted for 3 percent of the improvement and foreign currency translation added another 1 percent, which was partially offset by a 2 percent decline in the base businesses. Operating margins were 13.5 percent in 2002. Compared with 2001 on the same accounting basis - excluding goodwill and trademark amortization (in accordance with new accounting rules effective January 1, 2002) and restructuring charges - 2002 margins were slightly lower. Net income was $54.1 million, or $1.67 per diluted share. In 2001, net income on an as reported basis was $32.7 million, or $1.05 per diluted share. While the 2002 performance represented a 65 percent improvement in net income, 2001 net income was unfavorably affected by two items on an after-tax basis - $11.4 million in goodwill and trademark amortization, and $7.1 million of restructuring charges.
2003 Financial Performance Depends on Pace of New Orders and Strength of the Economy
Looking ahead, Williams said, "Last year's results reflected the sluggishness in the U.S. and the other worldwide end-markets we serve. Unfortunately, we are not in the position to project how the economy will perform in the next few quarters. As a short-cycle business, our financial performance depends on the current pace of incoming orders, and we have very limited visibility of future business conditions. However, we believe IDEX is well positioned for earnings improvement as the economy strengthens. This is based on our lower cost structures resulting from restructuring actions; our operational excellence initiatives of Lean, Kaizen, Six Sigma, global sourcing and eBusiness; and using our strong cash flow to cut debt and interest expense. In addition, we continue to pursue acquisitions such as Rheodyne, Halox and Wrightech - the three acquisitions completed in 2002 - to drive the company's longer term profitable growth."
Results of Shareholder Voting
At the meeting, shareholders elected Michael T. Tokarz as a continuing director of the corporation whose term now will expire in 2006. They also approved adoption of the Third Amended and Restated 1996 Stock Option Plan for Non-Officer Key Employees and the selection of Deloitte & Touche LLP as the company's auditor for 2003.
About IDEX
IDEX Corporation is a manufacturer of proprietary pumps and metering products, dispensing equipment, and other engineered products. Its products are sold to a wide range of industries throughout the world. IDEX shares are traded on the New York Stock Exchange and Chicago Stock Exchange under the symbol "IEX."
Source: IDEX Corporation
