IDEX Corporation

Greetings and welcome to IDEX Corporation second quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Allison Losses, Vice President and Chief Accounting Officer. Thank you. You may begin.

Good morning, everyone. This is Allison Lawsus, Vice President and Chief Accounting Officer for IDEX Corporation. Thank you for joining us for our discussion of the IDEX second quarter 2022 financial highlights. Last night, we issued a press release outlining our company's financial and operating performance for the three months ended June 30th, 2022. The press release, along with the presentation slides to be used during today's webcast, can be accessed on our company website at idexcorp.com. Joining me today are Eric Ashleman, our Chief Executive Officer and President, and Bill Grogan, our Chief Financial Officer. The format for our call today is as follows. We will begin with Eric providing an overview of the state of IDEX's business. Then, Bill will discuss IDEX second quarter financial results an update on segment performance in the markets they serve, and our outlook for the third quarter and full year 2022. Following our prepared remarks, we will open the call for your questions. If you should need to exit the call for any reason, you may access a complete replay beginning approximately two hours after the call concludes by dialing the toll-free number, 877-660-6853, and entering conference ID or simply log on to our company homepage for the webcast replay. Before we begin, a brief reminder. This call may contain certain forward-looking statements that are subject to Safe Harbor language in last night's press release and in IDEXX's filings with the Securities and Exchange Commission. With that, I'll now turn this call over to our CEO and President, Eric Ashleman.

Thank you, Alison, and good morning, everyone. I'm on slide six. IDEX delivered outstanding results in the second quarter. We achieved record sales levels, 12 percent organic growth supported by double-digit contributions from each of our operating segments. Our backlog grew by 43 million, and we now sit at record levels to continue momentum into Q3. Core profitability continues to be strong, even as we return to more normal discretionary spend levels, allowing us to fully invest in our best growth investments. We delivered record adjusted EPS of $2.02, an increase of 15% over the prior year's second quarter. Last quarter, I described how our IDEXX teams leveraged 80-20 to accelerate throughput within a challenging supply chain environment. That positive momentum continued into the second quarter as our teams improved their ability to execute and deliver for our customers. Our decentralized operating model, which aligns decision-making at the point of impact close to the customer, drives the speed and agility required for us to outperform. Our lead times were a competitive advantage and enabled share gain in pockets across the company. Inflationary pressures remain, but the rate of increase decelerated while we continue to capture price equivalent with our differentiation. Gross price capture increased, and we expanded our price-cost spread, trending back towards historic levels. We remain committed to our capital deployment strategy and M&A remains a top priority for us. This quarter we closed on the acquisition of KZ Valve, a complement to our agriculture business within FMT. Our pipeline is strong and we continue to evaluate opportunities in higher growth markets that support our style of competition. We have a healthy balance sheet and are confident that we can continue to put our capital to work. We're also deploying capital organically across our portfolio to drive operational efficiencies and increase capacity to support our growth. We continue to make investments in commercial engineering and M&A resources that enable us to execute on our strategy. During the quarter, we increased our share repurchases and deployed $88 million to buy back 475,000 shares of IDEXX stock. We remain disciplined with our methodology to create long-term value for shareholders when we see a disconnect between our intrinsic assessment of IDEX enterprise value and our public valuation. Lastly, in the second quarter, our board approved an 11 percent increase in our dividend. Rising interest rates, continued inflation, and geopolitical dynamics all present some uncertainty for us as we consider and head into the second half of the year, but we're not yet seeing any major signals of near-term slowing within our commercial environments. We have good line of sight to the next 90 days, and we continue to see strength in almost all our end markets. As we look across the industries we serve and our portfolio of differentiated technologies, we're confident that IDEX is well-positioned to outperform during any short-term market volatility. It's been a really strong first half of the year, and our teams have a lot to be proud of, but it's not easy to over-deliver in this environment. I'd like to thank our IDEX employees around the globe for their hard work, diligence, and agility as they execute for all our stakeholders. With that, let me turn it over to Bill to discuss our financial results.