Q3 2024 IDEX Corp Earnings Call
Speaker Change: Greetings and welcome to the third quarter 2024 I-DX 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.
Speaker Change: If anyone should acquire operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Wendy Palacios, my president of FPNA and investor relations. Thank you, Wendy. You may begin.
Speaker Change: and Ronnie Everyone, this is Wendy Palacios, Vice President of Uptina and Industrial Relations for Addicts Corporation.
Speaker Change: Thank you for joining us for our discussion of the I-DX 3rd Quarter 2020-4 financial highlights.
Speaker Change: Black Knight, we issued a press release outlining our company's financial and operating performance for its three months ending September 30th of 2024.
Speaker Change: The press release along with the presentation to be used during the X-Wetcast can be accessed on our investor website at investors.idxcorp.com.
Speaker Change: Joining me today are Eric Ashleman, our Chief Executive Officer and President.
Speaker Change: and Abhi Khandelwal, our Senior Vice President and Chief Financial Officer.
Speaker Change: Following up the Teardom marks, we will open the call for up for your questions.
Speaker Change: Training to fly through.
Speaker Change: Please note that during today's call, you will present certain non-gap financial measures. We will also make forward looking statements within the meeting of the federal security laws, including statements regarding events or developments that we expect on anticipate will.
Speaker Change: Forming, Accurate, and the Future. These four of us can stay in our subject to the risks and uncertainties. Actual results might differ materially from any four of us in the statements that we made today.
Speaker Change: We do notice if any application to update that.
Speaker Change: and Federation regarding these factors that make cause actual results to differ materially for these floors of these students, these available on our website and MRCC filings. With that, I'll now turn this call over to our CEO and President Eric Ashleman.
Eric Ashleman: Thanks Wendy and good morning everyone. I'm on slide three.
Eric Ashleman: Our I-DX team drove strong Q3 results in an uncertain environment. Here are the highlights. We delivered nice organic growth, supported by excellent margins in our fluid and metering technology and fire safety and diversified product segments.
Eric Ashleman: A free cash flow across I-DX of $192 million was $133% of adjusted net income. Execution through operational excellence was really strong overall.
Eric Ashleman: We're pleased to see orders growth within our health and science technology segment, and our teams are digging into the mod acquisition with focus and energy as we align around our best long-term growth prospects across all of our recent HST acquisitions.
Eric Ashleman: We have some important projects to deliver in Q4 and all segments that set us up well for next year.
Eric Ashleman: You know from the start of Q2 to the end of Q3 we really haven't seen a noticeable change in the macro environment. The recent interest rate dropped by the Fed and China stimulus announcements has yet to create positive ripple effects through improved certainty.
Eric Ashleman: and extremely close US November election with Polaroid Dow comes also within helping in the near term.
Eric Ashleman: Take all of that together and we continue to see an environment where day-to-day order rates remain stable, with an absence of larger long-term project commitments. This dynamic really holds true in the more fragmented industrial markets of FMT.
Eric Ashleman: We're encouraged by an increase in quoting activity as we move from summer to fall, and we don't see projects moving from delayed to canceled.
Eric Ashleman: will watch for signs either way as many customers move more formally, consider their capital and optics deployment within calendar budget cycles.
Eric Ashleman: We continue to see strength within our intelligent water markets and I'll talk more about our focused efforts there on the next slide.
Eric Ashleman: Within the Health and Science Technology segment, we saw a robust Q3 organic orders increase, partially driven by blanket orders, many of them landing within our idics health and science business.
Eric Ashleman: Admittedly, we're comparing to the low point of last year, but we drove year-over-year orders increases in all of our major HST reporting areas. We booked a bit of backlog over all this quarter and we posted a nice sequential uptick to our highest order point in 2024.
Eric Ashleman: We are encouraged by these trends with NHST, but remain cautious as we consider the trajectory of recovery within our most important markets.
Eric Ashleman: Our defense aerospace and satellite communication markets are strong. They experience double digit growth within the quarter. However, most major semi-conductor customers are pushing out the next industry inflection point into at least the midpoint of 2025.
Eric Ashleman: Life Sciences and Analytical Instrumentation Customers are more positive than they have been. They're innovating at a rapid clip and launching a lot of new gear, but they too are pretty non-committal to the timing of next level growth rates.
Eric Ashleman: Our teens continue to deploy resources toward their best long-term growth prospects with an eye towards applied material science technology synergies is we integrate a lot alongside our recent HST acquisitions.
Eric Ashleman: Fire Safety and diversified products had a solid quarter exceeding expectations, achieving record sales performance.
Eric Ashleman: Our fire business continues to grow share and scale production to meet North American OEM, Altair Backlugs. Bandit, Experience Strong Growth from Aerospace Demand.
Eric Ashleman: Finally, recall our dispensing business was impacted by top line headwinds of 40 million from the end of a large 2023 North American large retailer replenishment cycle. But our teams continue to work to offset that pressure by delivering strong growth within emerging markets.
Eric Ashleman: They've closed that year-over-year gap considerably, delivering over 15,000 units from our new facility in India, just opened in April of last year.
Eric Ashleman: As an aside, I want to thank our team members from IDEX Fire and Safety who chipped in to help people in North Carolina following the devastation from the remnants of Hurricane Helene.
Eric Ashleman: Finally, we're thrilled to formally close on the Mott Acquisition this quarter. Things are really exciting there. We'll share more details on the progress of the integration activities and some of the benefits we are experiencing early on in a slide to follow.
Eric Ashleman: Turning to slide four.
Eric Ashleman: Our Intelligent Water Platform continues to be a bright spot for us. We see significant opportunities now and in the future as municipalities and industries around the world cope.
Eric Ashleman: Water management is a sector that has classically been slow to change. Those days are over.
Eric Ashleman: Our aging and neglected infrastructure just can't handle the demands of expanding populations and increasingly severe weather events. What was once underground and out of sight is now impossible to ignore. What was once analog and manual is now increasingly digital and automated.
Eric Ashleman: And federal regulatory and funding support is stepping in to drive growth from above within a typically bottoms-up local and regional landscape.
Eric Ashleman: And our teams are ready to meet the challenge. Below ground, IDEX Intelligent Water aims to be the collection system experts, monitoring flow of stormwater and identifying small issues before they become big ones. Above ground, our teams help protect the environment with solutions that treat water and reduce the amount being used in critical processes.
Eric Ashleman: You see some examples here on the slide. The EnviroSight VeriSight Ultra Camera Inspection System gives teams better capabilities for remote inspection of sewers in more challenging environments than before.
Eric Ashleman: The most recent addition to the platform is Subterra, which we acquired about three months ago. This rapid sewer screening solution complements our core inspection technologies with an EPEC, EnviroSight, and WinCan.
Eric Ashleman: Subterra's sewer scout floats untethered downstream capturing three-dimensional data along the way.
Eric Ashleman: The market needs a simple condition assessment tool in their wastewater collection systems, specifically for large pipes that are rarely inspected. Subterra Technologies, performing within an integrated digital analytics suite, addresses that need and expands our overall IDEX expertise in this space.
Eric Ashleman: And yet another example of IDEX serving semiconductor manufacturers, the Quantum XNT, ultra-pure water heater and pump from Trevor, continues to save billions of liters of ultra-pure water.
Eric Ashleman: In this market, Trevor's innovation displaced an established heater pump manufacturer that didn't recognize or address quickly enough the semiconductor industry's needs to reduce water consumption.
Eric Ashleman: Now turning to slide five in an update on our acquisition of Mott Corporation.
Eric Ashleman: Less than two months since completing our acquisition of Mott, the partnership is off to a fast start. A few high-potential IDEX team members have formally joined the Mott leadership team in the earliest days of acquisition integration.
Eric Ashleman: This gives the Mott team a living key into the rest of IDEX to drive collaborative efficiency.
Eric Ashleman: In one instance, a combined team has rapidly developed a customer-ready prototype in the first 90 days of Mott being part of IDEX. Frankly, it's been tremendous to see.
Eric Ashleman: As you can see in the photo on the right of slide five, earlier this month, Mott opened its third manufacturing facility in Connecticut. This plant quadruples Mott's production capacity for custom-designed, ultra-thin, porous metal sheets.
Eric Ashleman: which are a critical component in the generation of green hydrogen, a low-emission fuel essential for the world's energy transition.
Eric Ashleman: The picture on the left shows Mott's high-purity operations where point-of-use gas filters used in the semiconductor industry are laser-marked, pressure and helium leak tested, inspected, and then pulse cleaned before bagging.
Eric Ashleman: As a reminder, Mott is a leader in the design and manufacturing of sintered porous material structures and flow control solutions.
Eric Ashleman: The MOT team has deep material science knowledge and process control capabilities. Their business is complementary to our broader applied material science technology businesses within HST, including MUON, STC material solutions, and optical technologies.
Speaker Change: We're excited about Mott's history of execution and the robust backlog funnel it has built to date with key project deliveries as we close out 2024. With that, I'll turn it over to Abhi to discuss our financial results.
Abhi Khandelwal: Thanks, Eric. Turning to the consolidated financial results on slide six.
Abhi Khandelwal: Please note that all comparisons are against the prior year period unless stated otherwise.
Abhi Khandelwal: Also, the acquisition of MA is reflected in IDEX Consolidated and XST Segment Financials as of the close of the transaction on September 5th.
Abhi Khandelwal: Third quarter orders of $781 million were up approximately 10% on a reported basis and up 8% organically.
Abhi Khandelwal: We saw orders growth across the portfolio, with HST seeing 20% organic growth in the quarter, half of which was partially driven by blanket order activity that will ship in 2025.
Abhi Khandelwal: FHDP had low single-digit organic growth while FMT was essentially flat.
Abhi Khandelwal: Third Quota Sales of $798 million were up 1% reported and flat organically compared to the prior year. We experienced organic growth of 4% in FSDP.
Abhi Khandelwal: and 2% in FMT.
Speaker Change: HST had a 5% organic decline driven by continued headwinds that I will cover in the upcoming slides.
Speaker Change: Third quarter gross margin was 44.3% and adjusted gross margin was 44.6%, an expansion of 20 basis points and 40 basis points respectively.
Speaker Change: Gross Margin Expansion was driven by strong price cost partially offset by higher employee related cost.
Speaker Change: Third quarter adjusted EBITDA margin was 26.9% down 150 basis points.
Speaker Change: With the acquisition of Mott, our biggest acquisition to date, we had higher than typical M&A spending, which negatively impacted our margins by approximately 40 basis points.
Speaker Change: We are accelerating the integration of MOT and are excited to see the realization of the expected commercial synergies.
Speaker Change: We continue to leverage AB20 across IDEX to deploy resources to growth.
Speaker Change: and Reduce Complexity.
Speaker Change: I will discuss the drivers of third quarter adjusted EBITDA on the next slide in a moment.
Speaker Change: On a gap basis, our Q3 effective tax rate was 22.9% versus 20.2% in the prior year period.
Speaker Change: The prior year rate included certain one-time benefits, which contributed 11 cents of adjusted EPS in the prior year period.
Speaker Change: Third quarter net income was $119 million resulting in GAAP EPS of $1.57.
Speaker Change: Adjusted net income was $144 million with an adjusted EPS of $1.90 down $0.22 or 10%.
Speaker Change: We achieved the higher end of our guide and while our guidance did not include contributions from MOT or its related financing costs, these amounts essentially offset one another during the quarter.
Speaker Change: Pre-cash flow for the quarter was $192 million, a decrease of 7%. We achieved a conversion rate of 133% of adjusted net income, a 400 basis point improvement on a year-over-year basis.
Speaker Change: We have a strong balance sheet and this quarter we paid over $50 million in cash dividends.
Speaker Change: We also funded the acquisition of Mott through the combination of approximately $212 million of cash, $279 million of borrowings from our revolving credit facility, and $495 million net proceeds from the issuance of senior notes.
Speaker Change: We maintain a strong investment grade rating with a 2.4 gross leverage ratio at the close of September.
Speaker Change: Moving on to slide 7, which details the adjusted EBITDA drivers.
Speaker Change: For the third quarter, suggested EBITDA decreased by $11 million.
Speaker Change: Our organic sales volume declined approximately 3%, unfavorably impacted adjusted EBITDA by $9 million, slowing through at prior year adjusted gross margin rate.
Speaker Change: The negative volume flow-through was partially offset by strong price-cost spread of 100 basis points and operational productivity, resulting in a $10 million benefit over the prior year.
Speaker Change: In the court, we saw unfavorable mix primarily in our industrial businesses and our dispensing businesses.
Speaker Change: We had higher employee-related costs and higher transaction-related expenses in connection with the acquisition amount.
Speaker Change: All these factors combined resulted in an unfavorable organic flow-through.
Speaker Change: The impact of FX slightly increased adjusted EBITDA by $1 million, and acquisitions net of divestitures added $2 million on a quarter-over-quarter basis, as the benefits from our acquisitions more than offset the impact on adjusted EBITDA from divested companies.
Speaker Change: I will now review segment-level performance.
Speaker Change: Turning to slide 8, an FMT segment.
Speaker Change: In Q3, we experienced sequential and mid-single-digit plus organic year-over-year growth in orders across the majority of our businesses.
Speaker Change: This growth was muted by continued ag cycle headwinds and push out in chemical project activity, resulting in total flat organic orders growth, or FMT.
Speaker Change: Net sales were up 2% organically.
Speaker Change: We had strong price capture across the segment and experienced high single-digit growth in our industrial and intelligent water businesses.
Speaker Change: Total segment growth was unfavorably impacted by demand softness in our ag OEM and energy businesses.
Speaker Change: Our industrial day rates remain steady from Q2, with no change in overall market conditions.
Speaker Change: A strength in year-over-year organic growth in our industrial business was partially due to prior year comps.
Speaker Change: Our Intelligent Water Portfolio continues to see strength in the North American municipal market with strong governmental funding to support ongoing investments.
Speaker Change: Our energy business are seeing headwinds from weather-related North America, slowdown in propane truck bills and distributor destocking, and decreased demand for propane in Europe.
Speaker Change: Our Ag OEM business remains challenged by the market slowdown.
Speaker Change: Despite this downturn, our teams remain focused, tackling the market headwinds and leveraging AD20 to redeploy resources.
Speaker Change: Adjusted EBITDA margin decreased to 160 basis points due to higher employee-related costs, higher discretionary spending, and unfavorable mix, partially offset by price cost.
Speaker Change: Thank you.
Speaker Change: Moving on to slide 9 in our HSP segment.
Speaker Change: Borders grew sequentially and experienced a year-over-year organic growth of 20%.
Speaker Change: Growth was partially driven by blanket orders in life science and performance pneumatic businesses.
Speaker Change: Year-over-year comps were also a factor as life sciences, analytical instrumentation, and semiconductor markets bottomed the same period last year.
Speaker Change: Our Innovation Funnel in Life Sciences remains active while there is no change in our outlook.
Speaker Change: Net sales were down 5% organically.
Speaker Change: Although, we had strong price capture, it did not entirely offset the volume declines driven by continued challenges in the end markets we serve.
Speaker Change: Our life sciences and analytical instrumentation businesses demand or study sequentially from Q2 to Q3.
Speaker Change: Defense, Aerospace, and Satellite Communication and Markets remain strong.
Speaker Change: We saw double-digit growth in the quarter. Within Semicon, what we are seeing is a push-up in the end-market recovery to the second half of next year.
Speaker Change: Our HST industrial-like businesses continue to experience project delays.
Speaker Change: As I commented earlier, the acquisition of MAAT is reflected in HST's segment financials as of the close of the transaction on September 5th.
Speaker Change: The integration of MOT is moving at a brisk pace.
Speaker Change: Q3 adjusted EBITDA margin for HST declined 40 basis points year-over-year primarily due to lower volume and higher employee related cost partially offset by price cost
Speaker Change: favorable operational productivity, cost of work the teams have done to align with the current environment, and the net accretive impact of acquisitions and divestitures.
Speaker Change: Now turning to slide 10.
Speaker Change: I'd like to take a moment to recognize our FSDP team's performance delivering record sales and adjusted EBITDA in the quarter.
Speaker Change: Driven by fire and safety, low double-digit growth, partially offset by declines in dispensing and bandit.
Speaker Change: Net sales were up 4% organically.
Speaker Change: We have strong price capture and higher volumes mainly driven by fire and safety and wind.
Speaker Change: Our fire and safety businesses continue to see growth in North America fire OEMs, and we are ramping production to meet their needs.
Speaker Change: Bendit, Experienced growth driven by strong aerospace demand. Offsetting, declines in industrial and auto.
Speaker Change: Our dispensing business experienced declines as expected, driven by headwinds from the North American big box retailer refresh cycle.
Speaker Change: Growth from the India market had been an offset to this had been to the first half of this year due to timing of projects in the emerging markets landing in the first half of 2024.
Speaker Change: Q3 adjusted EBITDA margin declined 20 basis points year-over-year primarily due to unfavorable mix with positive price cost offsetting higher employee related cost
Speaker Change: With that, I would like to provide an update on our outlook for the fourth quarter and full year on slide 11.
Speaker Change: For the fourth quarter, we project organic sales to increase 3 to 4 percent compared to the prior year.
Speaker Change: On a year-over-year basis, we expect mid to high single-digit organic growth in FMT and FSDB.
Speaker Change: In HST, we expect flat sales growth.
Speaker Change: Our full year adjusted EPS outlook remains unchanged and we expect organic revenues to decline 1-2% with an adjusted EBITDA margin of approximately 27%.
Speaker Change: We project GAAP diluted EPS to range from $6.65 to $6.70.
Speaker Change: and adjusted EPS to range from $7.85 to $7.90.
Speaker Change: in line with our prior guidance.
Speaker Change: The full-year revenue guidance implies high single-digit organic sales decline in HST and low single-digit growth in FMT and FSTP. With that, I'll turn it over to Eric for closing remarks.
Eric Ashleman: Thanks, Abhi. I'm on slide 12.
Eric Ashleman: Look, it's easy to get caught up in the economic uncertainties that play out quarter to quarter. It's been a frustrating last couple of years as we've seen the last echoes of the pandemic play out against an uncertain geopolitical environment, an environment made more uncertain globally by the unprecedented number of 2024 national elections.
Eric Ashleman: We've managed well throughout this period. We've improved the long-term growth prospects of IDEX significantly through incredibly focused work within a proprietary M&A funnel. We have some outstanding people and technologies at our disposal to develop trusted solutions to our customers' most difficult problems.
Eric Ashleman: We're building relative and absolute scale across business units to support advantaged markets like water, which we discussed today, advanced semiconductor wafer fabrication, life sciences and analytical instrumentation, and space and defense.
Eric Ashleman: We're rapidly digitizing traditionally analog applications throughout IDEX as we transform everything from customer acquisition and support to core product functionality.
Eric Ashleman: And we continue to grow through our jump-off points within Asia-Pacific as these developing markets reach economic trigger points to adopt IDEX advanced technologies.
Eric Ashleman: We sometimes take our abilities to execute for granted. We shouldn't. 80-20 isn't a tool at IDEX. It's evolved into an intuitive headset. We can size up the critical few quicker than others and swing our best people to our biggest challenges and opportunities without the need for time-wasting decision loops.
Eric Ashleman: Finally we're talking about collaboration across business boundaries to build scale more than we have in the past.
Eric Ashleman: We live our purpose every day through our commitment to our core values of trust, team, and excellence.
Eric Ashleman: Thanks again to our IDEX employees and partners around the world for all that you do to make IDEX a great company. With that, I'll turn it over to the operator for your questions.
Speaker Change: Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing your star keys.
Speaker Change: Our first question is from Dean Dre with RBC Capital Markets. Please proceed with your question.
Dean Dre: Thank you. Good morning, everyone.
Dean Dre: Hey, maybe we'd start with the tone of business, the day rates.
Dean Dre: Eric, you already kind of gave us the good news that the small project delays, you know, didn't escalate. So that was good. And you gave us some color on Bandit. But just, you know, the progression of the quarter and your read on the day rates, that'd be a great place to start. Thanks.
Eric Ashleman: Yeah, as I said kind of in the opening comments, I mean they've been stable for a while without really a lot of inflection So, you know, you know, you don't really see anything different through the summer months You know month to month Is it played out in a quarter a lot of it looks pretty similar to where we were in Q2
Eric Ashleman: And, of course, we've got the, you know, the businesses that are closest to Consumption. We track those all the time. You know, they've been steady with a little bit of lift in them, and we see that playing out in the numbers that we posted in kind of our core industrial units here.
Eric Ashleman: And so I think, you know, good shape on the, those indicators that the kind of industrial system continues and it's, we're still making things in plants all across the country and we're maintaining it. That's kind of what a lot of that indicates.
Eric Ashleman: You know, the project and the longer term commitments, I think that's in about the same place to the uncertainty and the overhang of obviously the election coming up next week, where that's going to take us those kind of things.
Eric Ashleman: I think it's still sort of out there in the way.
Eric Ashleman: We're always looking to see if any of those projects start to suddenly move into a category of either delayed or canceled instead of delayed or just not talked about any longer. We don't see that. I actually made a comment about the fact that quoting activity, in fact, is picking up a little bit.
Eric Ashleman: which I think is a good sign. And then I'm sure we'll get to it at a certain point. We've got a little bit of a revenue ramp here in Q4, and almost all of that is project related, you know, with a couple of key things that
Eric Ashleman: are in the backlog now. Some of them are, you know, underway and near completion, and I think are also good signs of confidence of, you know, the time out ahead of us.
Speaker Change: Hey Dean, just to build on Eric's narrative a little bit, so if you just kind of think about Q3 and just...
Dean Dre: You know, we're going to go to 2% if you will, but if you kind of take a step back and go a step deeper, within the FMT business, pumps and water, you know, grew high single digit.
Dean Dre: You saw valves grow high single-digit on an organic basis, you know, which was offset by heroin or sorry offset by ag and Energy, so even within HST the core industrial franchise was up high single-digit
Speaker Change: That's really helpful and I appreciate all that that color. And just as a follow-up, I love the fact that you put the spotlight on your intelligent water portfolio. We met with the team and got to visit each one of these businesses at the WEFTEC trade show in New Orleans recently.
Speaker Change: And we had to point to one that probably the fastest growing sector in the water infrastructure is this whole stormwater management. So it's you guys, it looks like you get some first mover advantage there. You just talk about critical mass.
Speaker Change: for the Intelligent Water Group. Do you need to add more capabilities? What kind of is the funnel like? And just kind of where and how does this business grow from here?
Speaker Change: Yeah, well, thanks. Thanks. We appreciate talking to you and others at that show. And yet, you mentioned a key word, you know, we in our in our commentary about kind of the our businesses in that area, we pointed to becoming the collection experts, you know, that that's really the work we do here.
Speaker Change: And that's a lot of focus right there, obviously, through things like stormwater and, you know, significant weather events that that's where you see that play out. And so I think, you know, we've got the assets.
Speaker Change: positioned in the right place. They're really, really focused, and as you saw, they work together. They work together in a way where the hardware and the analytics help to give you this predictive insight into not just what's going on in your system in front of you, but what's likely to occur in the future.
Speaker Change: And I think one of the reasons we're winning is when we think about our end customers, it's certainly operating professionals who are trying to run the system. We have a significant customer base that are specification engineers and project engineers within municipalities and industries.
Speaker Change: And what they're trying to do is understand the analytics of the system, the way that kind of the water circuit works, if you will.
Speaker Change: And then they're trying to put that together to, you know, to obtain capital project approval.
Speaker Change: And so, at this particular phase of the cycle, a cycle that's got more positive funding support with longer duration, being able to understand your system so that you can position yourselves to get that funding.
Speaker Change: You know, for your municipality or business is really, really important and it kind of points right back to the core work that we do.
Speaker Change: That's sometimes underappreciated, everybody thinks of kind of day-to-day monitoring, but this very specific engineering kind of partnership that helps people understand their system better actually allows them to go grab funding that is more available now than it has been.
Speaker Change: Sorry, you also asked about other pieces and things and kind of where we are. I mean, there's...
Speaker Change: Subterra is a good example. That's sort of probably an under-the-radar, under-appreciated technology that we very much appreciate. We've been working with that company before.
Speaker Change: and it really helps kind of complete capabilities for us. There are other things we would like to do here within kind of this ecosystem of collection.
Speaker Change: And so, you know, we continue to work the funnel, we continue to look at things, and we're very much, it is an 80s for us in terms of an area that we would like to make larger, both organically and inorganically over time.
Speaker Change: Great to hear. Thank you. Thank you.
Speaker Change: Our next question is from Nathan Jones with Stiefel. Please proceed with your question.
Speaker Change: Good morning everyone. Good morning Nathan.
Nathan Jones: I'm going to follow up on Dane's question there a bit.
Speaker Change: At Westpac, you could see the intelligent water businesses, you know, all together, kind of united front, showing customers, you know, what the combined business is.
Speaker Change: capabilities were.
Speaker Change: I'm just thinking about how you run those businesses and potentially how you run some of the businesses in HST to collaborate together and Eric, that was one of your closing comments was collaboration across the business units without you losing the decentralized structure.
Speaker Change: How do you kind of manage that process with these businesses? Do you need some kind of integration with the commercial organization, you know, cross trading for sales? And how do you manage those business so that you drive the collaboration that you want to see without actually going and integrating the businesses?
Speaker Change: Yeah, that's a good it's a great question. And that's a that's a great spot to talk about it. I mean
Speaker Change: As nimbly and agilely as we do, it's...
Speaker Change: a super flat organizational structure.
Speaker Change: So we have a leader of the water business and between kind of, you know, that leader and the leaders of individual pieces of water, I mean, there's not a lot of stacking. So think of this as kind of wide and horizontal more than vertical. That's one of the keys here.
Speaker Change: And, you know, the quality of the people, the quality of the system and the operating model allows you to take that span a little bit wider. And so you've already got something working for you in terms of being close to the point of impact with all leaders. So that's a key ingredient, doesn't change. It's always been part of IDEX and is as we do this work.
Speaker Change: And so in every one of these points, you know, we know the difference between an area where there is collaboration and people are working together because a customer cares about it versus other areas where life goes on in individual pieces and specialized segments.
Speaker Change: Which is, you know, that's where I think a lot of customer or companies get caught. They over-rotate one way or the other. We're actually very comfortable living in a kind of a hybrid world because we we have ever since I've worked at IDEX. We're just becoming a bit more focused to putting some of this scale to work.
Speaker Change: because the solution set demands it. The problems are harder, they're evolving, they're at earlier stages of evolution, so you need more power in the system.
Speaker Change: So it really does lever everything we've ever thought about in terms of 80-20, everything we do culturally, which celebrates flat organizations and a lack of bureaucracy. And probably the secret sauce for all of it is the talent and development that we do internally.
Speaker Change: to make sure that leaders are built in a certain way that they can operate with all of that autonomy.
Speaker Change: Thanks for that. I guess my follow-up question is going to be around the HST order number. 20% organic growth, I think Abhishek said half of that was from blanket orders. Is the kind of right way to think about, without the blanket orders, the order number would have been something like about 305, which is...
Speaker Change: kind of an average of where it's been settled in over the last few quarters, you know, since the bottom in 2023.
Speaker Change: So it's, you know, kind of no change sequentially, still waiting and seeing, not really getting any better and not getting any worse. Are these blanket orders indicative of some kind of improvement in some of those markets?
Speaker Change: Yes, Nathan, let me let me try and answer your question. So if you kind of think about it sequentially from 3 to 4 or 2Q to 3Q and look at HST, HST was up about 20 million dollars. I'd say about, you know, about half of that was blanket order activity that we saw from Q2 to Q3 and the other half was just trade demand between different businesses.
Speaker Change: And then if you think about year-over-year, HST posted about a $51 million organic change in orders on a year-over-year basis, that's again the same kind of amount for blanket and half of that was demand.
Nathan Jones: Thank you. Thank you.
Speaker Change: so you do see you are actually saying
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: Life Sciences continues to be stable if you look at it sequentially but there are markets like we've said again Semicon is not at a point where it's you know inflecting but we are seeing improvement even in our Semicon in markets sequentially.
Speaker Change: And then remind, thanks for taking my questions. Yeah, just just to finish, I mean, we, you know, we have half of this segment that kind of is in other high tech areas that are not in the usual suspects of semiconductor and life science and analytical instrumentation.
Speaker Change: And those, I mean, they're performing a lot like the industrial businesses that we see elsewhere. So we've got some growth and lift there. We've had that from before.
Speaker Change: I just think, look, at the end of the day, we feel good about the position we see here because, you know, we've obviously got a big comp number against a low point last year, but we've seen kind of nice progression away from that.
Speaker Change: And we've just now posted the highest order number for the year in the segment, built a little bit of backlog, and we have a really good comparison, and some signs of optimism in just the conversations we're having with customers.
Speaker Change: It doesn't say when the next inflection comes, it doesn't really talk about the magnitude of it, but having people leaning in the same direction here, that is one of the signs we wanted to see as we started to move away from just baseline stability.
Speaker Change: Thanks for taking my questions. Thanks, Ned.
Speaker Change: Our next question is from Mike Halloran with Baird. Please proceed with your question.
Speaker Change: Good morning, everyone. Hi Mike.
Mike Halloran: So first question kind of ties into a couple of answers that you already had, but.
Mike Halloran: Maybe talk about how you're thinking about the sequentials in the fourth quarter. I know Eric, I think you briefly mentioned There's some incremental project activity coming in there
Mike Halloran: But maybe talk about, it doesn't seem like there's a change in your day rate, choppy, kind of stable, but choppy month to month, week to week kind of expectations.
Speaker Change: Relatively normal sequentials. Is that how you're thinking about things in the fourth quarter? Is that a fair assumption to start next year until we see a change in the backdrop? You know, kind of any thoughts on how you're thinking about how the next few quarters here play out?
Speaker Change: Yeah, so let me let me take the Q3 to Q4 sequential and I'll let Eric jump in. So if you kind of think about Q3 to Q4...
Speaker Change: and think about the guide that we've laid out. It's really, you know, there are a few different places where we have projects that are in the backlog.
Speaker Change: that, you know, that we've done a lot of work on that are supposed to ship in Q4. So, forest is around Abel.
Speaker Change: you know, the ship big, you know, big pumps, and that's in the backlog that the teams are working on executing and getting out the door. Second place you see it is in pharma, in our MPT business where there's a backlog that's booked that we're working on, it's pretty late stage that's going to get out.
Speaker Change: A few different projects that I just laid out, and that's how we think about the RAM from Q3 to Q4.
Speaker Change: And then, you know, look, past that, I think it's going to, it's going to depend on what we sort of see play out here in the fourth quarter. I do think this is a period where, you know, everybody like us is kind of forced to come in and consider their next calendar year if they're on that cycle.
Speaker Change: in terms of what bets they're going to make, how they're going to make them. They kind of need to talk to critical suppliers like us as they do it. That would be an interesting source that would inflect it other way. But, you know, I think a continuation of stability.
Speaker Change: That seems reasonable as we go forward. And then it's really a question of what layers in on top of it. What are the state of health of commitments and the ability to make them?
Speaker Change: Kind of where are we sitting at that point with backlog of other projects, including any that might be there for Mott?
Speaker Change: We'll layer those in and then we'll have, you know, those up-to-the-minute conversations, see what happened here, of course, in the election and whether or not that triggered anything. So there's the usual number of suspects that would come in there, but it has been kind of a period of...
Speaker Change: It's now two quarters of kind of base level stability. It at least allows you to then kind of see the pieces that rise above it with pretty good clarity or at least the fact that you need to keep digging for it.
Speaker Change: Done an iterative reshaping of the portfolio here. You've centralized some resources or added central resources to support the decentralized model.
Speaker Change: The Revenue Synergy piece, could you maybe help on the growth algorithm and then break it down by what the drivers or components of that growth look like from market to synergies to outperformance or however else you want to.
Speaker Change: Categorize it.
Speaker Change: Look, we now have a portfolio that is increasingly starting to weight itself to more faster growing markets, all the ones that we've acquired into here in HST, and so that's becoming the biggest segment. It's going to carry more of the load as we go forward in periods like the ones you're describing, certainly somewhere else in the future.
Speaker Change: So we would see kind of organic rates. We'd always want to outperform our core market entitlements, but we're moving that entitlement to the north.
Speaker Change: And so we'd like to start to dial IDEX into a kind of mid-single-digit grower plus.
Speaker Change: As we start to navigate that, we'll continue to deploy capital on the bottom line that would say you put a point or two of, you know, inorganic growth on top of it, kind of take us to the higher single-digit range when you put the two together.
Speaker Change: That should allow a beautiful flow-through, because these are high-margin businesses and high-margin differentiated markets, and we're still going to practice 80-20 in productivity. We're going to do a lot of it on the acquisitions that we acquire.
Speaker Change: So you'd get nice double-digit earnings expansion through all of that.
Speaker Change: Thanks, Eric. Thanks, Abhishek. Thank you.
Speaker Change: and many more. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question is from Vlad Bystriky with Citigroup. Please proceed with your question.
Vlad Bystriky: Morning, guys. Thanks for taking my call this morning. Morning, Glenn.
Vlad Bystriky: So I just wanted to dig in on FMT a bit.
Vlad Bystriky: Just in terms of your commentary and outlook around energy there, which I think you moved from stable to market softness So you just talk a little bit more about the dynamics you're seeing in energy in particular and how you're thinking about whether you know how much election impacts might be having an impact on those end markets or Anything else that you're seeing is sort of an overhang in those
Speaker Change: Yeah, I mean, there's a, you know, first, there's two things here. One, I'd always kind of step back a little bit and remind people of the job we do here. We do a lot of downstream work around custody transfer. So, as
Speaker Change: Energy Moves Around the System. That's kind of where we do a lot of our work.
Speaker Change: Frankly, a lot of that's driven by things like people building trucks and, you know, laying in some infrastructure within that transportation system. We got some overhang there from a really, really warm winter that's probably spread over that sector throughout.
Speaker Change: We got a little bit of an artificial bump here to the downside because this was one of the businesses, you might remember, we had a consolidation, a large-scale consolidation here a couple of years ago.
Speaker Change: This is one that if you go back in time about a year ago, we were still processing quite a bit of backlog in that business. It was one of the last that we had that were kind of eating backlog that had accumulated.
Speaker Change: And so we got a bit of a comparison issue because we're now at very standard IDEX levels of lead time and replenishment, so there's always going to be a little bit of a calibration issue, particularly on a year-over-year basis. So I'd actually take this energy story and say it's probably half of it that's us.
Speaker Change: And then just on the question of go forward, you know, obviously, it's sort of an indirect relationship, but health of the energy sector overall will tend to promote CapEx deployment and all the things that eventually find their way downstream to the places where we do business. So we would prefer to have it rather than not.
Speaker Change: Okay, that's helpful, Eric, appreciate it. And then maybe just sticking with FMT.
Speaker Change: Just in terms of the stability you've seen in sort of the day rate orders, any color or commentary you can give on what you're seeing by geography and whether you're seeing any meaningful differences in domestic versus international trends?
Eric: probably as you suspect I mean North America leading the way that's been the case now for a while not just by a little but by a lot
Speaker Change: I think reasonable stability in Europe, not a lot of inflection, it moves around a little bit, it's not the bigger piece for us in this particular part of the business, I mean we're more North American centric anyways.
Speaker Change: And then I would say, you know, and when when you go on the other side of the globe, that is a different story. I mean, almost anything we're doing in India right now is really, really good. I would say China is well, that story overall, of course, has some sobering characteristics. We've always been super surgical there.
Speaker Change: And so it's probably trailing the pack because of where it is and what it's a part of, but we're more than holding our own because we just, we choose to wait, you know, make certain bets in certain places that are.
Speaker Change: Honestly, they're very small representative of the entirety of that economy. So if you're going to put them in order, probably would say India first, but it's a smallish piece of IDEX, North America strong, and that's driving a lot of it, Europe stable and lagging a little bit behind. I'd probably put China at the back.
Speaker Change: but still positive for us.
Speaker Change: Okay, I appreciate that. Thanks.
Speaker Change: Our next question is from Jeff Sprague with Vertical Research Partners. Please proceed with your question.
Jeff Sprague: Hey, thank you. Good morning, everyone.
Jeff Sprague: Hey, hi. I wanted to come back just to the HST orders again.
Jeff Sprague: and sort of blanket orders starting to come in.
Jeff Sprague: Eric, is there anything there in
Jeff Sprague: actually, you know, helps, you know, kind of firm up a view into 2025. Obviously, there's got to be some normalization going on here. So just your context, right, is, you know, maybe apparently the channel inventory liquidations have run their course, and maybe we're getting to some sort of normalization here.
Jeff Sprague: Again, the rate of advancement, the rate of inflection, still pretty vague and not really determined yet.
Jeff Sprague: I'd hold that up in that particular space. If you just listen to comments that our teams are having with customers and the ones that are out there in the public, you hear optimism a little bit more, you hear people, some people talking about fleet aging and where we are in that side of the cycle.
Jeff Sprague: some things around consumables, which often lead the way for instruments at some point. And so there's like little general pieces, but there is a preponderance of them on the right side of the page as opposed to the left.
Jeff Sprague: And it doesn't really say what the slope is going to be at this point yet, but it's important.
Jeff Sprague: The inventory dynamic that you talked about, you know, that's that's out there too for HST. And reminder, again, some of these are not life sciences or semi spaces, there are other ones, but those are areas of OEM centric businesses and
Jeff Sprague: a little higher customer concentration. And they have been some areas where those customers have had some inventory that we've been working around. And so the extent there's order patterns like this, it does suggest there, too, that you're further and further away from that.
Jeff Sprague: And then the fact that, you know, that all of the reporting areas that we have have got some level of organic health in the order side, and it's uniform across the segment. Those are the kind of things, again, that just...
Jeff Sprague: Again, they're sort of rough and generalized, but they're important and they're additively on the positive side of the ledger versus not.
Speaker Change: Understood. Thanks for that color. And then maybe just coming back to China, I think your prior comments on China just a moment ago were just on, related to FMT, I apologize if they weren't, but you just give us kind of the big picture view on China, how it performed in the quarter and...
Speaker Change: Does any context on total IDEX price in the quarter also would be helpful, thank you. Yeah, on the first part, they're not far off FMT versus full company because we have a lot of FMT presence there. It's really, that's kind of a lead segment with some.
Speaker Change: and some things that we have in FHIR as well. And I would say put the two together, it's basically the same commentary.
Speaker Change: It's a tiny piece of a giant geography and it's kind of product line based and so.
Speaker Change: And we kind of move in and out, depending on which way the wind is blowing. And so when we think we've got technical advantage, we go a little heavier with something that holds up better. And we generally, all of it stays in at least a positive category. And in otherwise,
Speaker Change: maybe not quite as positive story.
Speaker Change: Again, which is still a small piece for the company to be, yeah, and then on the pricing question that you had, we saw about 2.3% price in the quarter and 100 basis points spread that we had talked about as part of the guidance in Q2. So that's where we landed for the quarter. And that's, that's been holding steady both sides of the equation.
Speaker Change: Thank you for that. Have a good day. Appreciate it. Thank you.
Speaker Change: Our next question is from Andrew Buscaglia with BNP Paribas. Please proceed with your question.
Speaker Change: Hey, good morning, everyone. Morning.
Andrew Buscaglia: I wanted to ask on HST, you know, you're talking about this delay pickup and that means
Andrew Buscaglia: You know, maybe two questions there, just what, you know, what are the customers saying is, is, you know, giving you insight into that comment, you know, why we wouldn't see that pick up sooner than mid year next year. And then have you guys discussed the margin differential across those four sub segments within HST? And how would that impact?
Andrew Buscaglia: You know, the recovery, you know, for margins going from here.
Speaker Change: All right, well, I'll take the first part and I'll let Abhi chime in on the second. I mean, I think from a semi, you know perspective, again, we do pretty narrow focus work there. We're involved in wafer manufacturing and fabrication and metrology, principally on really, really advanced solutions.
Speaker Change: That's where almost all of the IDEX pieces that do business do it.
Speaker Change: It just doesn't drive kind of big ticket items at a level yet that takes it up to another level.
Speaker Change: There's been a series of pretty public announcements in that regard. I think a lot of people pointing to probably the lack of any singular big catalyst beyond obviously the things that are happening in AI, but that really doesn't present itself at this point in massive volume.
Speaker Change: It's more specialized and so I think whether it's you know That's some kind of consumer gear or a return to lots of PCs that are more advanced than ever Those are the kind of things I think you'd be looking for
Speaker Change: to take and push the upper limits of those utilization rates to a point where you'd want to then get in line for some still pretty long lead time gear.
Speaker Change: And so, you know, given that nobody orders this kind of stuff today for delivery tomorrow, it does allow you to probably see into the future a little bit and make a projection like that. So, it doesn't mean, again, that that's a, you know...
Speaker Change: Yeah, so I'll take a stab at your margin question, so kind of just think about where XSD is.
Speaker Change: So I'd say it's a true testament to the work that our teams have done in right-sizing our businesses, frankly, because if you're down 5% organically...
Speaker Change: and the teams didn't do the work they did to take out costs, you'd see a much higher decline on a year-over-year basis.
Speaker Change: Kudos to our team for right sizing the size, couple with driving productivity, couple with the price, price cost spread that we saw in the segment, right? So as you sit here today and look at a 26.5% EBITDA profile, and then, you know, moving forward, what does that look like? So, you know, we announced the acquisition of Mott. We said it was a low 20% EBITDA out of the gates.
Speaker Change: Then we laid out a very clear plan that demonstrates that we're going to generate four to six hundred basis points of margin improvement at Mott in the next 12 to 18 months. So when you put it all together, coupled with the organic growth coming back in the future, there's no reason for HST not to be a low 30% EBITDA business.
Speaker Change: Okay, got it, that's helpful. You know, maybe sticking with margins, your price cost has been good, but you know...
Speaker Change: I feel like every few years you guys have to navigate some sort of supply chain calamity and with the election coming up, tariffs are now back in the news.
Speaker Change: Can you remind us like where you are with
Speaker Change: with your positioning if a deed tariff come back into the picture and how you're you know getting ready for that
Speaker Change: Well, I mean, you know, like I think whether it's.
Speaker Change: supply chain pressure that we experienced in a pandemic, or it's an item like that. Thinking about supply chain resilience, every company should be, and we're doing that too.
Speaker Change: I will remind people, I mean, we saw this to our advantage in the pandemic.
Speaker Change: probably would be an advantage in this environment as well. We're much more localized in terms of, you know, ideating and orders placed within the same geography where we actually produce and sell.
Speaker Change: It doesn't mean there aren't cross-border shipments on the supply and input side. There are at certain levels and certain kind of base level commodities. We do an awful lot of work within country. So
Speaker Change: You know as we think of tackling it and we're of course running scenarios and talking about critical critical inputs like anybody else We are appreciative that kind of we built the company around a model that tends to be more localized anyways
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question is from Brett Lindsey with Mizuho. Please proceed with your question.
Brett Lindsey: Hey, good morning, all.
Brett Lindsey: Hey, I wanted to come back to the EBITDA bridge and specifically the resource investment slash discretionary that $12 million, fairly big step up sequentially in verse Q1. I was hoping you could just unbundle those. Is the resource investment offset by lower discretionary or is this discretionary going up too? And then if you could maybe speak to some of those targeted investments and the paybacks. Yeah, let me take the bridge item first. So if you look at the bridge that we put out there on a year-over-year basis,
Speaker Change: tied to the question you're asking. So I'd say a third of that is tied to hire, I mean, it's been on a year-over-year basis, given the fact that we just did our largest transaction with Mac. So that's about a third of it. The other third is tied to...
Speaker Change: StockComps and the timing of StockComps last year and the tailwind that we saw compared to this year. And then there is some discretionary spend in here tied to customer facing T&E and the investments that we are making tied to growth initiatives on a year-over-year basis.
Speaker Change: In the acquisition, we're working the plans, we're partnering with the local teams, our teams and the mock teams are partnering together and laying out a plan over the next 12 months. So it's early days, so it's hard to pinpoint to what 25 versus 26 is going to do.
Speaker Change: You know you always think you're going to get a certain business and meet it and then you pass the line you close it And of course reality is there this reality is every bit as good as what we thought coming in
Speaker Change: and the fact that we were able to integrate some teams as fast as we are. It's an 80s acquisition for us that we're all playing in.
Speaker Change: and we see as many possibilities reduce. It's just a real testament to that's the early read, the early excitement, there's still an awful lot of work to do. The world's got to play out, but we at least want to make sure we got that out in front of you that at this point couldn't be happier with.
Speaker Change: You know, what we acquire.
Speaker Change: Appreciate the detail. Best of luck. Thank you.
Speaker Change: Our next question is from Joe Giordano with TD Cowan. Please proceed with your question.
Joe Giordano: Hey, good morning, guys.
Joe Giordano: I wanted to touch on some of the other more recent M&A. So,
Joe Giordano: For EA, you guys lowered your expectations last quarter. Just curious how that's tracking. And then also curious on Muon, just given the semi-push, as you talked about, and one of your large customers gave some disappointing orders. So just curious what the latest is on those two businesses.
Speaker Change: I'm sorry, can you tell me what EA means? I'm not sure I followed you. Apologies.
Joe Giordano: Sorry, sorry.
Speaker Change: focus on move on. That was my mistake there. Just move on, given like the the the weakness that in orders at one of your large customers. Yeah, I mean, look, that's, that's a that's a piece of that business. It's not by no means is it all of it, or even the majority of it. So and even there, I mean, we're, we're like that business is doing a portion of it is doing some pretty advanced work that's
Joe Giordano: Actually well ahead of machines that are being delivered today. So it's it's not a one-for-one kind of corollary
Joe Giordano: So there's a few things there that help out on that side of it and ultimately at the end long cycle super well positioned
Joe Giordano: It's got some presence in medtech markets that are are doing are doing well because it's exiting some inventory positions It's got another one. That's actually in a very different adjacency as well. So it's
Joe Giordano: It's not an entirely semi-driven business. That is a decent component of it, but it's well-positioned and at times a little different than you might suspect in terms of the production cycle, and the other two components I think pretty good.
Joe Giordano: and holding up. And it is it is a piece that we're now considering with other applied materials science business technology businesses we have in terms of how all of it works together including Mott. You know so we'll be doing some of that work and and in some ways you know kind of rescaling recasting all of it together.
Speaker Change: Okay, and then just curious on the
Speaker Change: The sequential growth in HST, you said half of it was.
Speaker Change: Bioprocessing or is it more lab just kind of what's which cohort of customers is really driving that? Well for us it kind of almost has to be in the analytical instrumentation kind of course. Yeah, yeah Just because of our presence. We're not as pronounced in the bio areas
Speaker Change: Perfect. Thanks, guys.
Speaker Change: Thank you.
Our next question is from Rob Wertheimer with Mellius Research. Please proceed with your question.
Howdy, I know it's late in the call, but Eric, I was listening to your prepared remarks on the conversion of
smaller pieces of IDEX, but as we started to assemble scale more purposefully, actually, this is one of the areas that we are applying it. And so I'll give you a couple of examples that kind of rise to the next level, doing a lot of work on the front end of a lot of these outstanding FMT franchises. Unknown Speaker
Speaker Change: You know, which are more fragmented, more industrial in nature, but the nature of the interactions between ourselves and end customers is more digital than ever.
Speaker Change: is a leader in those spaces. I mean, the market's looking for us to kind of lead the way of how this work is going to be done. How does knowledge transfer happen if somebody calls in and they're
Looking for information. How many people have to manually intervene there versus some automated things that we can do? So we've got we've had for a while now But we're starting to scale it more some very focused Initiatives to make sure that we are leading the way there Like you would think a market leader would do and you see a lot of that playing out at FMT
Speaker Change: On the solution side, you know, this is not a ubiquitous solution, but you see it playing out in FHIR. We've talked about the automation there. That's a decent part of the growth and the strong numbers that they've put up.
You know, that's a slower to change industry, but it's starting to take and get some real traction there. And that's all about digital functionality and automation, helping solve this problem of crew size.
Speaker Change: We talked about our water businesses. At the core, all that hardware ultimately presents information that is shown digitally and is now more seamless and more integrated than it was before.
Speaker Change: Thank you.
Unknown Executive, Eric Ashleman, Abhishek Khandelwal, Wendy Palacios, Abhishek Khandelwal, Wendy Palacios,
Thank you. There are no further questions at this time. I would like to hand the floor back over to Eric Ashleman for any closing comments.
Hey, thanks so much. Thanks for everybody for joining today. I really appreciate the questions and the interest. And look, I think the bottom line here, still a choppy and uncertain world, no doubt, but we're in a good spot at IDEX. You know, we're not out of the woods yet at HST, but it's really great to see the strong year-over-year orders comp, the modest backlog build, and the sequential orders uptick to the high point.
Speaker Change: We'll have to wait a bit, see how that recovery plays out from here. But look, I think we've strengthened our portfolio a lot as we prepare ourselves for a cycle of sunnier days ahead. No doubt through the acquisitions and Mott here at the end is a really good indicator of that.
Speaker Change: Our two other segments are doing really, really well with some nice pockets of growth and execution as always at IDEX is strong across the board.
We think the second half of the decade which by the way is only two months away from starting It's going to be a tremendous period of value creation overall for IDEX And I really look forward to talking with you about it in the quarters to come. Thanks. Have a great day. Thank you Thank you
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Thank you. Thank you. Thank you.