IDEX Corporation

Greetings. Welcome to the fourth quarter 2022 IDEX Corporation earnings conference call. At this time, all participants are in 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. Please note this conference is being recorded. I would now like to turn the conference over to Allison Losses, Vice President and Chief Accounting Officer. Thank you. You may begin.

Good morning, everyone. This is Allison Losses, Vice President and Chief Accounting Officer for IDEX Corporation. Thank you for joining us for our discussion of the IDEX fourth quarter and full year 2022 financial highlights. Last night, we issued a press release outlining our company's financial and operating performance for the three months and full year ending December 31st, 2022. The press release along with the presentation slides to be used during today's webcast can be accessed on our company website at IDEXXCorp.com. Joining me today are Eric Ashleman, our Chief Executive Officer and President, and Bill Grogan, our Chief Financial Officer. We will begin with Eric providing an overview of the state of IDEXX's business, including a recap of our recent performance. Bill will then provide a segment outlook for 2023 and discuss our fourth quarter and full year 2022 financial results, as well as our guidance for the first quarter and full year 2023. Eric will then close the call with our key priorities for 2023. 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 13734461, 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 the 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. 2022 was a record year for IDEX. We experienced double-digit organic growth every quarter, driving all three of our segments to record sales levels and achieved strong record profitability driven by solid execution. This year was not without its challenges. We experienced unprecedented inflation as well as a difficult supply chain environment. Despite these obstacles, we achieved some of the strongest financial results we've ever posted. I'd like to thank our IDEX employees around the globe for their efforts and hard work. We also deployed more capital than ever before, investing in our businesses, acquiring new ones, and returning capital to our shareholders. We deployed a record $950 million for the acquisitions of NexSight, KZ Valve, and most recently, the Muon Group. We reinvested back into our core business, to increase capacity to support growth and drive productivity, and made investments in the commercial engineering and M&A resources that enabled us to execute on our best opportunities. We also repurchased 795,000 shares of IDEXX stock for $148 million as we followed our opportunistic, disciplined approach to buybacks. As we turn to 2023, we are prepared to build upon a very solid foundation. We have strong backlog positions overall, and we continue to leverage innovative technologies to drive targeted growth opportunities. We have healthy price carryover in addition to new price actions to capture the value our products bring to our customers. Finally, we have an opportunity to drive strong productivity as we bring process-driven normalcy back to our operations through the application of the IDEXX operating model. However, we're a short-cycle business, and with that comes limited visibility. The broad-based supply chain constraints experienced last year have created some new dynamics around order patterns and customer delivery timing, and we predict that 2023 will be an uncertain period of transition as we dynamically calibrate with our customers. Additionally, there are likely to be pockets of demand softness due to a variety of intersecting economic and geopolitical factors. Regardless of these challenges, we will execute and deliver growth above market entitlements. The short cycle and decentralized nature of our business supports quick adaptation and alignment to shifting conditions. And we will course correct quickly and effectively when needed. Our balance sheet has ample capacity to support our M&A strategy as well as organic reinvestment. Our extended M&A and strategy team continues to build conviction around our best opportunities, and our funnel is strong and of high quality. We've also identified areas where we will deploy capital organically to expand capacity, capture market share, and drive operational productivity. IDEX had a strong finish to an outstanding year in 2022. Our agility, resiliency, and our fundamental ability to execute has IDEX exceptionally well positioned to outperform as we move forward. With that, I'll turn it over to Bill to discuss the outlook for our segments on page seven.