Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and related notes in this quarterly report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Company’s actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Item 1A, “Risk Factors” in the Company’s most recent annual report on Form 10-K and under the heading “Cautionary Statement Under the Private Securities Litigation Reform Act” discussed elsewhere in this quarterly report.

This discussion also includes certain non-GAAP financial measures that have been defined and reconciled to their most directly comparable U.S. GAAP measures later in this Item under the headings “Non-GAAP Disclosures” and “Free Cash Flow.” This discussion also includes Operating working capital, which has been defined later in this Item under the heading “Cash Flow Summary.” The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. The financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.

Overview

IDEX is an applied solutions company specializing in the manufacture of fluid and metering technologies, health and science technologies and fire, safety and other diversified products built to customers’ specifications. IDEX’s products are sold in niche markets across a wide range of industries throughout the world. Accordingly, IDEX’s businesses are affected by levels of industrial activity and economic conditions in the U.S. and in other countries where it does business and by the relationship of the U.S. dollar to other currencies. Levels of capacity utilization and capital spending in certain industries and overall industrial activity are important factors that influence the demand for IDEX’s products.

During the three months ended March 31, 2022, the Company achieved a record quarter in sales, operating margin and earnings per share driven by robust demand and strong operating performance. Teams successfully navigated the challenging economic environment arising primarily from material availability and logistical challenges and also continued to deliver for customers. The Company expanded operating margin as its highly differentiated product portfolio enabled strong price capture amid inflation pressures and its focus on operational productivity yielded positive results. Finally, the Company deployed additional capital, both within its existing portfolio and with the acquisition of Nexsight to the IDEX family of businesses as well as through share repurchases.

Select key financial results for the three months ended March 31, 2022 when compared to the same period in the prior year are as follows:

• Sales of $751.1 million increased 15%; organic sales (which excludes acquisitions/divestitures and foreign currency translation) were up 12%.

• Operating income of $187.6 million increased 21%. Adjusted operating income increased 18% to $187.6 million.

• Operating margin of 25.0% was up 110 basis points. Adjusted operating margin increased 70 basis points to 25.0%.

• Net income attributable to IDEX of $140.0 million increased 24%. Adjusted net income attributable to IDEX increased 21% to $149.8 million.

• Adjusted EBITDA of $214.7 million was 29% of sales.

• Diluted EPS attributable to IDEX of $1.83 increased $0.35, or 24%. Adjusted EPS attributable to IDEX of $1.96 increased $0.34, or 21%.

• Cash flows provided by operating activities of $79.7 million were down due to increases in working capital, partially offset by higher earnings. Free cash flow of $63.6 million was 42% of adjusted net income attributable to IDEX.

Results of Operations

The following is a discussion and analysis of the Company’s results of operations for the three months ended March 31, 2022 compared with the three months ended March 31, 2021.

Performance for the Three Months Ended March 31, 2022 Compared with the Same Period in 2021

									Three Months Ended March 31,												Change
(Dollars in millions, except per share amounts)																					2022						2021						$						% / bps
Net sales																					$	751.1					$	652.0					$	99.1					15		%
Cost of sales																					408.6						359.4						49.2						14		%
Gross profit																					342.5						292.6						49.9						17		%
Gross margin																					45.6		%				44.9		%				n/a						70 bps
Selling, general and administrative expenses																					154.3						134.9						19.4						14		%
Restructuring expenses and asset impairments																					0.6						2.2						(1.6)						(73		%)
Operating income																					187.6						155.5						32.1						21		%
Operating margin																					25.0		%				23.9		%				n/a						110 bps
Other income - net																					(2.3)						(0.8)						(1.5)						188		%
Interest expense																					9.5						10.7						(1.2)						(11		%)
Income before income taxes																					180.4						145.6						34.8						24		%
Provision for income taxes																					40.5						32.9						7.6						23		%
Effective tax rate																					22.4		%				22.6		%				n/a						(20) bps
Net income attributable to IDEX																					$	140.0					$	112.7					$	27.3					24		%
Diluted earnings per common share attributable to IDEX																					$	1.83					$	1.48					$	0.35					24		%

Sales increased 15%, reflecting a 12% increase in organic sales, a 5% increase from acquisitions (Airtech - June 2021 and ABEL - March 2021) and a 2% unfavorable impact from foreign currency translation. Sales increased 26% domestically and 6% internationally, and sales to customers outside the U.S. were approximately 50% of total sales in the first quarter of 2022 compared to 54% during the same period in 2021.

Cost of sales increased due to higher sales volume, inflation and acquisitions. Both gross profit and gross margin increased primarily due to higher volume leverage and strong operational productivity together with favorable price/cost, partially offset by higher employee-related costs. Additionally, gross profit increased as a result of acquisitions.

Selling, general and administrative (“SG&A) expenses increased primarily due to higher employee-related costs, amortization from acquisitions, discretionary spending and resource investments compared with the same period in 2021.

Restructuring expenses and asset impairments decreased due to severance benefits and asset impairments related to the consolidation of certain facilities in 2021 that did not reoccur in 2022.

Operating income increased 21%, reflecting an 18% increase in organic operating income, a 3% increase from acquisitions (Airtech - June 2021 and ABEL - March 2021) and a 2% favorable impact from lower restructuring costs, partially offset by a 2% unfavorable impact from foreign currency translation. The increase in operating income is attributable to the operating margin drivers discussed below.

Operating margin increased 110 basis points, reflecting a 130 basis point increase in organic operating margin and a 30 basis point favorable impact from lower restructuring costs, partially offset by a 40 basis point decrease due to acquisitions primarily driven by higher amortization and a 10 basis point unfavorable impact from foreign currency translation. The increase in organic operating margin is primarily due to the gross margin drivers discussed above, partially offset by higher discretionary spending and resource investments.

Other income - net increased primarily due to higher gains on asset sales, partially offset by a decrease in the fair market value of marketable securities.

Interest expense decreased primarily due to lower interest rates on the Company’s indebtedness, partially offset by an increase in the amount of debt outstanding compared with 2021.

The Company’s provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The provision for income taxes increased compared with the same period in 2021 primarily due to higher earnings while the effective tax rate slightly decreased compared with the same period in 2021 due to the mix of global pre-tax income across jurisdictions.

Results of Reportable Business Segments

The Company has three reportable segments: Fluid & Metering Technologies (“FMT”), Health & Science Technologies (“HST”) and Fire & Safety/Diversified Products (“FSDP”).

• The FMT segment designs, produces and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors and other fluid-handling pump modules and systems and provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agriculture and energy industries.

*•*The HST segment designs, produces and distributes a wide range of precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, precision photonic solutions and precision gear and peristaltic pump technologies. HST serves a variety of end markets, including food and beverage, pharmaceutical and biopharmaceutical, cosmetics, marine, chemical, wastewater and water treatment, life sciences, research and defense markets.

• The FSDP segment designs, produces and distributes firefighting pumps, valves and controls, rescue tools, lifting bags, other components and systems for the fire and rescue industry, engineered stainless steel banding and clamping devices used in a variety of industrial and commercial applications and precision equipment for dispensing, metering and mixing colorants and paints used in a variety of retail and commercial businesses around the world.

Within its three reportable segments, the Company maintains 13 reporting units where the Company focuses on organic growth and strategic acquisitions. Management’s primary measurements of segment performance are sales, operating income and operating margin. The table below illustrates the three reportable segments and the reporting units within each segment.

FMT						HST						FSDP
Pumps						Scientific Fluidics & Optics						Fire & Safety
Water						Sealing Solutions						Dispensing
Energy						Performance Pneumatic Technologies						BAND-IT
Valves						Material Processing Technologies
Agriculture						Micropump

The table below illustrates the percentages of the share of sales and operating income contributed by each segment on the basis of total segments (not total Company) for the three months ended March 31, 2022.

									Three Months Ended March 31, 2022
																											FMT						HST						FSDP						IDEX
Sales																											36		%				42		%				22		%				100		%
Operating Income(1)																											39		%				41		%				20		%				100		%

(1) Segment operating income excludes unallocated corporate operating expenses of $16.9 million for the three months ended March 31, 2022.

Fluid & Metering Technologies Segment

			Three Months Ended March 31,																		Components of Change
(Dollars in millions)			2022						2021						Change						Organic						Acq/Div**(1)**						Restructuring						Foreign Currency						Total
Net sales			$	272.0					$	243.3					12%						11%						2%						—						(1%)						12%
Operating income			80.4						62.9						28%						27%						—						2%						(1%)						28%
Operating margin			29.5		%				25.8		%				370 bps						380 bps						(40) bps						30 bps						—						370 bps

(1) Based on the timing of its acquisition, ABEL results for the first two months of 2022 are reflected in the acquisitions/divestitures column.

• The change in organic sales was attributed to increases in the Pumps reporting unit due to strong demand in the industrial and energy markets, in the Agriculture reporting unit due to favorable commodity prices and global demand for crops and in the Water reporting unit due to strong demand in the municipal and industrial water markets as well as water saving growth projects.

• Sales increased 15% domestically and 9% internationally. Sales to customers outside the U.S. were approximately 45% of total segment sales in the first quarter of 2022 compared with 46% during the same period in 2021.

• Operating margin of 29.5% increased 370 basis points compared with 25.8% during the same period in 2021. The change in operating margin was attributed to the following:

◦Organic operating margin increased 380 basis points due to higher volume leverage and strong operational productivity together with favorable price/cost, partially offset by increases in employee-related costs and resource investments. Additionally, the prior year period was unfavorably impacted by increases in inventory reserves associated with COVID-19 new product development opportunities not materializing and the fair value inventory step-up charge related to the ABEL acquisition.

◦Lower restructuring costs favorably impacted operating margin by 30 basis points.

◦Acquisitions negatively impacted operating margin by 40 basis points due to:

▪Incremental intangible asset amortization from the ABEL acquisition of $0.6 million, which negatively impacted operating margin by 20 basis points; and

▪The dilutive impact from the ABEL acquisition on overall FMT operating margin.

Health & Science Technologies Segment

			Three Months Ended March 31,																		Components of Change
(Dollars in millions)			2022						2021						Change						Organic						Acq/Div**(1)**						Restructuring						Foreign Currency						Total
Net sales			$	315.2					$	250.4					26%						16%						11%						—						(1%)						26%
Operating income			83.6						66.6						26%						19%						7%						1%						(1%)						26%
Operating margin			26.5		%				26.6		%				(10) bps						50 bps						(80) bps						20 bps						—						(10) bps

(1) Acquisitions included Airtech in June 2021.

• The change in organic sales was attributed to increases in the Scientific Fluidics & Optics reporting unit due to strong market demand across analytical instrumentation, life science and semiconductor markets as well as targeted growth initiatives tied to next generation sequencing and satellite broadband. Additionally, increases in the Sealing Solutions reporting unit were driven by strong demand in the semiconductor and industrial markets and increases in the Performance Pneumatics Technologies reporting unit were driven by strength in the industrial market.

• Sales increased 62% domestically and 4% internationally. Sales to customers outside the U.S. were approximately 52% of total segment sales in the first quarter of 2022 compared with 63% during the same period in 2021.

• Operating margin of 26.5% decreased 10 basis points compared with 26.6% during the same period in 2021. The change in operating margin was attributed to the following:

◦Organic operating margin increased 50 basis points due to higher volume leverage and favorable price/cost which were more than offset by the dilutive impact of amortization related to Airtech as well as higher employee-related costs, discretionary spending and resource investments.

◦Lower restructuring costs favorably impacted operating margin by 20 basis points.

◦Acquisitions negatively impacted operating margin by 80 basis points as the contributions of the Airtech business were more than offset by incremental intangible asset amortization of $3.9 million, which negatively impacted operating margin by 130 basis points.

Fire & Safety/Diversified Products Segment

			Three Months Ended March 31,																		Components of Change
(Dollars in millions)			2022						2021						Change						Organic						Acq/Div						Restructuring						Foreign Currency						Total
Net sales			$	164.7					$	159.5					3%						5%						—						—						(2%)						3%
Operating income			40.5						44.6						(9%)						(6)						—						—						(3%)						(9%)
Operating margin			24.6		%				27.9		%				(330) bps						(320) bps						—						10 bps						(20) bps						(330) bps

• The change in organic sales was driven by an increase in the Dispensing reporting unit due to North American project volume and strong demand in the paint market. Additionally, increases in the BAND-IT reporting unit were due to strong performance in the energy and industrial markets, as the automotive market continued to be challenged by supply-chain related customer delays.

• Sales increased 1% domestically and 5% internationally. Sales to customers outside the U.S. were approximately 54% of total segment sales in the first quarter of 2022 compared with 53% during the same period in 2021.

• Operating margin of 24.6% decreased 330 basis points compared with 27.9% during the same period in 2021. The change in organic operating margin was attributed to higher employee-related costs and discretionary spending as well as compressed price/cost due to long-term original equipment manufacturer contracts, partially offset by higher volume.

Liquidity and Capital Resources

Liquidity

Although the COVID-19 pandemic (including the emergence of variant strains) has impacted and may continue to impact the Company’s operating cash flows, based on management’s current expectations and currently available information, the Company believes current cash, cash from operations and cash available under the Revolving Facility will be sufficient to meet its operating cash requirements, planned capital expenditures, interest and principal payments on all borrowings, pension and postretirement funding requirements, share repurchases and quarterly dividend payments to holders of the Company’s common stock for the foreseeable future. Additionally, in the event that suitable businesses are available for acquisition upon acceptable terms, the Company may obtain all or a portion of the financing for these acquisitions through the incurrence of additional borrowings.

At March 31, 2022, working capital was $1,213.0 million and the Company’s current ratio was 3.6 to 1. At March 31, 2022, the Company’s cash and cash equivalents totaled $733.2 million, of which $467.7 million was held outside of the United States. As of March 31, 2022, there was no balance outstanding under the Revolving Facility and $7.1 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of $792.9 million. The Company believes that additional borrowings through various financing alternatives remain available, if required.

Cash Flow Summary

The following table is derived from the Condensed Consolidated Statements of Cash Flows:

						Three Months Ended March 31,
(In millions)						2022						2021
Net cash flows provided by (used in):
Operating activities						$	79.7					$	109.3
Investing activities						(124.4)						(119.5)
Financing activities						(71.3)						(40.4)

Operating Activities

Cash flows provided by operating activities decreased $29.6 million to $79.7 million, primarily due to increases in working capital discussed below, partially offset by higher earnings.

Operating working capital, calculated as accounts receivable plus inventory minus accounts payable, is used by management as a measurement of operational results as well as the short-term liquidity of the Company. The following table details operating working capital as of March 31, 2022 and December 31, 2021:

(In millions)						March 31, 2022						December 31, 2021
Receivables - net						$	411.2					$	356.4
Inventories						428.5						370.4
Less: Trade accounts payable						210.2						178.8
Operating working capital						$	629.5					$	548.0

Operating working capital increased $81.5 million to $629.5 million at March 31, 2022, with acquisition, divestiture and foreign currency translation impacts primarily driving a net $13.0 million of the increase. Excluding these impacts, accounts receivable increased $45.6 million as a result of higher volume; inventories increased $46.9 million to support production amid supply chain difficulties; and trade accounts payable increased $24.0 million due to higher inventory purchases.

Investing Activities

Cash flows used in investing activities increased $4.9 million to $124.4 million, primarily due to higher cash outflows for acquisitions with the addition of Nexsight in 2022 compared to ABEL in 2021 and for capital expenditures as the Company continues the expansion of its China and India facilities, partially offset by higher proceeds from asset sales.

Financing Activities

Cash flows used in financing activities increased by $30.9 million to $71.3 million. During 2022, the Company repurchased 147,500 shares at a cost of $28.3 million, of which $2.0 million did not settle until April, and paid $41.4 million in dividends. During 2021, the Company did not repurchase any shares and paid $38.1 million in dividends.

Free Cash Flow

The Company believes free cash flow, a non-GAAP measure, is an important measure of performance because it provides a measurement of cash generated from operations that is available for payment obligations such as planned capital expenditures, interest and principal payments on all borrowings and quarterly dividend payments to holders of the Company’s common stock as well as for funding acquisitions. Free cash flow is calculated as cash flows provided by operating activities less capital expenditures.

The following table reconciles free cash flow to cash flows provided by operating activities:

						Three Months Ended March 31,
(Dollars in millions)						2022						2021
Cash flows provided by operating activities						$	79.7					$	109.3
Less: Capital expenditures						(16.1)						(14.6)
Free cash flow						$	63.6					$	94.7
Free cash flow as a percent of adjusted net income attributable to IDEX(1)						42.5		%				76.7		%

(1) Free cash flow as a percent of adjusted net income attributable to IDEX now reflects the impact of excluding acquisition-related intangible asset amortization, net of related taxes, from adjusted net income attributable to IDEX.

The decrease in free cash flow as compared to 2021 is due to the increases in working capital discussed above, which more than offset higher earnings.

Cash Requirements

Pending Acquisitions

On March 30, 2022, the Company entered into a definitive agreement to acquire KZValve for cash consideration of $120.0 million. The Company expects to close the transaction by the end of the second quarter of 2022, subject to regulatory approval and customary closing conditions.

Capital Expenditures

Capital expenditures are generally expenditures for machinery and equipment that support growth and improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. Cash flows from operations were more than adequate to fund capital expenditures of $16.1 million and $14.6 million in the first quarters of 2022 and 2021, respectively. The Company believes it has sufficient operating cash flow to continue to meet current obligations and invest in planned capital expenditures.

Share Repurchases

During the three months ended March 31, 2022, the Company repurchased 147,500 shares at a cost of $28.3 million, of which $2.0 million did not settle until April. There were no share repurchases during the three months ended March 31, 2021. As of March 31, 2022, the amount of share repurchase authorization remaining was $683.7 million. For additional information regarding the Company’s share repurchase program, refer to Note 15 in the Notes to Condensed Consolidated Financial Statements.

Subsequent to March 31, 2022 and through April 22, 2022, the Company has repurchased 60,362 shares at a cost of $11.7 million.

Covenants

There are two key financial covenants that the Company is required to maintain in connection with the Revolving Facility, the 3.20% Senior Notes and the 3.37% Senior Notes, a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At March 31, 2022, the Company was in compliance with both of these financial covenants, as the Company’s interest coverage ratio was 21.68 to 1 for covenant calculation purposes and the leverage ratio was 1.46 to 1. There are no financial covenants relating to the 2.625% Senior Notes or the 3.00% Senior Notes; however, both are subject to cross-default provisions.

Credit Ratings

The Company’s credit ratings, which were independently developed by the following credit agencies, are detailed below:

• S&P Global Ratings affirmed the Company’s corporate credit rating of BBB (stable outlook) in June 2021.

• Moody’s Investors Service affirmed the Company’s corporate credit rating of Baa2 (stable outlook) in December 2021.

• Fitch Ratings reaffirmed the Company’s corporate credit rating of BBB+ (stable outlook) in March 2022.

Critical Accounting Estimates

As discussed in the Annual Report on Form 10-K for the year ended December 31, 2021, the preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. There have been no changes to the Company’s critical accounting estimates described in the Annual Report on Form 10-K for the year ended December 31, 2021.

Non-GAAP Disclosures

Set forth below are reconciliations of each of Organic sales, Adjusted gross profit (and adjusted gross margin), Adjusted operating income (and adjusted operating margin), Adjusted net income attributable to IDEX, Adjusted diluted earnings per share (“EPS”) attributable to IDEX, Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA to its respective most directly comparable U.S. GAAP measure. Management uses these metrics to measure performance of the Company since they exclude items that are not reflective of ongoing operations, such as fair value inventory step-up charges, restructuring expenses and asset impairments and gains on sales of assets. Adjusted net income attributable to IDEX and Adjusted diluted EPS attributable to IDEX also exclude acquisition-related intangible asset amortization. Management also supplements its U.S. GAAP financial statements with adjusted information to provide investors with greater insight, transparency and a more comprehensive understanding of the information used by management in its financial and operational decision making. The reconciliation of segment EBITDA and Adjusted segment EBITDA to net income was performed on a consolidated basis due to the fact that the Company does not allocate consolidated interest expense or the consolidated provision for income taxes to its segments.

This report references organic sales and organic operating income, non-GAAP measures, that exclude (1) the impact of foreign currency translation and (2) sales and operating income, respectively, from acquired or divested businesses during the first 12 months of ownership or prior to divestiture. The portion of sales and operating income attributable to foreign currency translation is calculated as the difference between (a) the period-to-period change in organic sales and organic operating

income, respectively, and (b) the period-to-period change in organic sales and organic operating income, respectively, after applying prior period foreign exchange rates to the current year period. Management believes that reporting organic sales and organic operating income provides useful information to investors by helping to identify underlying growth trends in the Company’s business and facilitating easier comparisons of the Company’s revenue and operating performance with prior and future periods and to its peers. The Company excludes the effect of foreign currency translation from organic sales and organic operating income because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestitures because they can obscure underlying business trends and make comparisons of long-term performance difficult due to the varying nature, size and number of transactions from period to period and between the Company and its peers.

Given the acquisitive nature of the Company, which results in a higher level of amortization expense from recently acquired businesses, management uses EBITDA as an internal operating metric to provide another representation of the businesses’ performance across the Company’s three segments and for enterprise valuation purposes. Management believes that EBITDA is useful to investors as an indicator of the strength and performance of the Company and a way to evaluate and compare operating performance and value companies within the Company’s industry. Management believes that EBITDA margin is useful for the same reason as EBITDA. EBITDA is also used to calculate certain financial covenants such as EBITDA interest coverage, which is EBITDA divided by consolidated interest expense. In addition, this report presents Adjusted EBITDA, which is EBITDA adjusted for items that are not reflective of ongoing operations as discussed above and Adjusted EBITDA interest coverage, which is Adjusted EBITDA divided by consolidated interest expense. Management believes that Adjusted EBITDA is useful as a performance indicator of ongoing operations. The Company believes that Adjusted EBITDA is also useful to some investors as an indicator of the strength and performance of the Company and its segments’ ongoing business operations and a way to evaluate and compare operating performance and value companies within the Company’s industry. The definition of Adjusted EBITDA used here may differ from that used by other companies.

This report also references free cash flow. This non-GAAP measure is discussed and reconciled to its most directly comparable U.S. GAAP measure in the section above titled “Cash Flow Summary.”

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. The financial results prepared in accordance with U.S. GAAP and the reconciliations from these results should be carefully evaluated.

1. Reconciliations of the Change in Net Sales to Organic Net Sales
			Three Months Ended March 31, 2022
			FMT						HST						FSDP						IDEX
Change in net sales			12		%				26		%				3		%				15		%
- Net impact from acquisitions/divestitures			2		%				11		%				—		%				5		%
- Impact from foreign currency			(1		%)				(1		%)				(2		%)				(2		%)
Change in organic net sales			11		%				16		%				5		%				12		%

2. Reconciliations of Reported-to-Adjusted Gross Profit and Margin
									Three Months Ended March 31,
															2022						2021
Gross profit															$	342.5					$	292.6
+ Fair value inventory step-up charge															—						0.7
Adjusted gross profit															$	342.5					$	293.3
Net sales															$	751.1					$	652.0
Gross margin															45.6		%				44.9		%
Adjusted gross margin															45.6		%				45.0		%

3. Reconciliations Reported-to-Adjusted Operating Income and Margin
			Three Months Ended March 31,
			2022																														2021
			FMT						HST						FSDP						Corporate						IDEX						FMT						HST						FSDP						Corporate						IDEX
Reported operating income (loss)			$	80.4					$	83.6					$	40.5					$	(16.9)					$	187.6					$	62.9					$	66.6					$	44.6					$	(18.6)					$	155.5
+ Restructuring expenses and asset impairments			—						—						—						—						—						0.9						0.6						0.1						0.6						2.2
+ Fair value inventory step-up charge			—						—						—						—						—						0.7						—						—						—						0.7
Adjusted operating income (loss)			$	80.4					$	83.6					$	40.5					$	(16.9)					$	187.6					$	64.5					$	67.2					$	44.7					$	(18.0)					$	158.4
Net sales (eliminations)			$	272.0					$	315.2					$	164.7					$	(0.8)					$	751.1					$	243.3					$	250.4					$	159.5					$	(1.2)					$	652.0
Reported operating margin			29.5		%				26.5		%				24.6		%				n/m						25.0		%				25.8		%				26.6		%				27.9		%				n/m						23.9		%
Adjusted operating margin			29.5		%				26.5		%				24.6		%				n/m						25.0		%				26.5		%				26.9		%				28.0		%				n/m						24.3		%

4. Reconciliations of Reported-to-Adjusted Net Income and Diluted EPS
									Three Months Ended March 31,
															2022						2021
Reported net income attributable to IDEX															$	140.0					$	112.7
+ Restructuring expenses and asset impairments															—						2.2
+ Tax impact on restructuring expenses and asset impairments															—						(0.5)
+ Fair value inventory step-up charge															—						0.7
+ Tax impact on fair value inventory step-up charge															—						(0.2)
- Gains on sales of assets															(2.7)						—
+ Tax impact on gains on sales of assets															0.6						—
+ Acquisition-related intangible asset amortization															15.3						11.0
+ Tax impact on acquisition-related intangible asset amortization															(3.4)						(2.5)
Adjusted net income attributable to IDEX															$	149.8					$	123.4

									Three Months Ended March 31,
															2022						2021
Reported diluted EPS attributable to IDEX															$	1.83					$	1.48
+ Restructuring expenses and asset impairments															—						0.03
+ Tax impact on restructuring expenses and asset impairments															—						(0.01)
+ Fair value inventory step-up charge															—						0.01
+ Tax impact on fair value inventory step-up charge															—						—
- Gains on sales of assets															(0.03)						—
+ Tax impact on gains on sales of assets															0.01						—
+ Acquisition-related intangible asset amortization															0.20						0.14
+ Tax impact on acquisition-related intangible asset amortization															(0.05)						(0.03)
Adjusted diluted EPS attributable to IDEX															$	1.96					$	1.62
Diluted weighted average shares outstanding															76.4						76.3

5. Reconciliations of EBITDA to Net Income
			Three Months Ended March 31,
			2022																														2021
			FMT						HST						FSDP						Corporate						IDEX						FMT						HST						FSDP						Corporate						IDEX
Reported operating income (loss)			$	80.4					$	83.6					$	40.5					$	(16.9)					$	187.6					$	62.9					$	66.6					$	44.6					$	(18.6)					$	155.5
+ Other income (expense), net			1.6						0.2						1.6						(1.1)						2.3						—						0.4						0.3						0.1						0.8
+ Depreciation and amortization			7.6						16.0						3.8						0.1						27.5						7.1						10.5						3.9						0.1						21.6
EBITDA			89.6						99.8			1.0			45.9			2.0			(17.9)						217.4						70.0						77.5						48.8						(18.4)						177.9
- Interest expense																											9.5																														10.7
- Provision for income taxes																											40.5																														32.9
- Depreciation and amortization																											27.5																														21.6
Reported net income																											$	139.9																													$	112.7
Net sales (eliminations)			$	272.0					$	315.2					$	164.7					$	(0.8)					$	751.1					$	243.3					$	250.4					$	159.5					$	(1.2)					$	652.0
Reported operating margin			29.5		%				26.5		%				24.6		%				n/m						25.0		%				25.8		%				26.6		%				27.9		%				n/m						23.9		%
EBITDA margin			32.9		%				31.7		%				27.9		%				n/m						28.9		%				28.7		%				31.0		%				30.5		%				n/m						27.3		%
EBITDA interest coverage																											22.9																														16.5

6. Reconciliations of EBITDA to Adjusted EBITDA
			Three Months Ended March 31,
			2022																														2021
			FMT						HST						FSDP						Corporate						IDEX						FMT						HST						FSDP						Corporate						IDEX
EBITDA**(1)**			$	89.6					$	99.8					$	45.9					$	(17.9)					$	217.4					$	70.0					$	77.5					$	48.8					$	(18.4)					$	177.9
+ Restructuring expenses and asset impairments			—						—						—						—						—						0.9						0.6						0.1						0.6						2.2
+ Fair value inventory step-up charge			—						—						—						—						—						0.7						—						—						—						0.7
- Gains on sales of assets			(1.2)						—						(1.5)						—						(2.7)						—						—						—						—						—
Adjusted EBITDA			$	88.4					$	99.8					$	44.4					$	(17.9)					$	214.7					$	71.6					$	78.1					$	48.9					$	(17.8)					$	180.8
Adjusted EBITDA margin			32.5		%				31.7		%				26.9		%				n/m						28.6		%				29.4		%				31.2		%				30.6		%				n/m						27.7		%
Adjusted EBITDA interest coverage																											22.6																														16.8

(1) EBITDA, a non-GAAP financial measure, is reconciled to net income, its most directly comparable U.S. GAAP financial measure, immediately above in Table 5.

Cautionary Statement Under the Private Securities Litigation Reform Act

This quarterly report on Form 10-Q, including the “Overview,” “Results of Operations” and “Liquidity and Capital Resources” sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, the Company’s expected organic sales growth and expected earnings per share, and the assumptions underlying these expectations, plant and equipment capacity for future growth and the anticipated timing and effects of planned facility expansion, the duration of supply chain challenges, anticipated future acquisition behavior and capital deployment, availability of cash and financing alternatives, the anticipated timing of the closing of the Company's acquisition of KZValve and the anticipated benefits of the Company’s acquisitions of Airtech, Nexsight and KZValve, and are indicated by words or phrases such as “anticipates,” “estimates,” “plans,” “guidance,” “expects,” “projects,” “forecasts,” “should,” “could,” “will,” “management believes,” “the Company believes,” “the Company intends” and similar words or phrases. These statements are subject to inherent uncertainties and risks that could cause actual results to differ materially from those anticipated at the date of this report. The risks and uncertainties include, but are not limited to, the following: the impact of health epidemics and pandemics, including the COVID-19 pandemic, and the impact of related governmental actions, on the Company’s ability to operate its business and facilities, on its customers, on supply chains and on the U.S. and global economy generally; economic and political consequences resulting from terrorist attacks and wars, including Russia’s invasion of Ukraine and the global response to this invasion, which, along with the ongoing effects of the COVID-19 pandemic, could have an adverse impact on the Company’s business by creating disruptions in the global supply chain and by potentially having an adverse impact on the global economy; levels of industrial activity and economic conditions in the U.S. and other countries around the world; pricing pressures and other competitive factors and levels of capital spending in certain industries, all of which could have a material impact on order rates and the Company’s results; the Company’s ability to make acquisitions and to integrate and operate acquired businesses on a profitable basis; the relationship of the U.S. dollar to other currencies and its impact on pricing and cost competitiveness; political and economic conditions in foreign countries in which the Company operates; developments with respect to trade policy and tariffs; interest rates; capacity utilization and the effect this has on costs; labor markets; supply chain backlogs, including risks affecting component availability, labor inefficiencies and freight logistical challenges; market conditions and material costs; and developments with respect to contingencies, such as litigation and environmental matters. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included in the Company’s most recent annual report on Form 10-K and the Company’s subsequent quarterly reports filed with the Securities and Exchange Commission (“SEC”) and the other risks discussed in the Company’s filings with the SEC. The forward-looking statements included here are only made as of the date of this report, and management undertakes no obligation to publicly update them to reflect subsequent events or circumstances, except as may be required by law. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented here.