Edgar Filing: IDEX CORP /DE/

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2007
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 1-10235

IDEX CORPORATION
(Exact Name of Registrant as Specified in its Charter)

DELAWARE 36-3555336
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

630 DUNDEE ROAD, NORTHBROOK, ILLINOIS 60062
(Address of principal executive offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER: (847) 498-7070

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer or a non-accelerated filer.
Large accelerated filer [X] Accelerated filer [ ] Non-accelerated
filer [ ]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

Number of shares of common stock of IDEX Corporation outstanding as of July
31, 2007: 81,387,088 (net of treasury shares).

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements............................................... 1
Condensed Consolidated Balance Sheets.............................. 1
Condensed Consolidated Statements of Operations.................... 2
Condensed Consolidated Statements of Shareholders' Equity.......... 3
Condensed Consolidated Statements of Cash Flows.................... 4
Notes to Condensed Consolidated Financial Statements............... 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.............................................. 14
Cautionary Statement Under the Private Securities Litigation Reform
Act................................................................ 14
Historical Overview and Outlook.................................... 14
Results of Operations.............................................. 15
Liquidity and Capital Resources.................................... 20
Item 3. Quantitative and Qualitative Disclosures About Market Risk......... 20
Item 4. Controls and Procedures............................................ 21

PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................. 21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds........ 22
Item 4. Submission of Matters to a vote of Security Holders................ 22
Item 5. Other Information.................................................. 22
Item 6. Exhibits........................................................... 22
Signatures................................................................... 23
Exhibit Index................................................................ 24
Certifications...............................................................

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

IDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)

JUNE 30, 2007 DECEMBER 31, 2006
------------- -----------------

ASSETS
Current assets
Cash and cash equivalents............................ $ 52,025 $ 77,941
Receivables, less allowance for doubtful accounts of
$4,224 at June 30, 2007 and $3,545 at December 31,
2006.............................................. 199,320 166,485
Inventories.......................................... 174,054 160,687
Assets held for sale................................. 776 829
Other current assets................................. 20,093 11,966
---------- ----------
Total current assets.............................. 446,268 417,908
Property, plant and equipment -- net................... 169,513 165,949
Goodwill............................................... 937,624 912,600
Intangible assets -- net............................... 190,754 171,363
Other noncurrent assets................................ 4,953 3,001
---------- ----------
Total assets...................................... $1,749,112 $1,670,821
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable............................... $ 90,991 $ 75,444
Accrued expenses..................................... 89,354 95,170
Short-term borrowings................................ 158,240 8,210
Liabilities held for sale............................ 129 373
Dividends payable.................................... 9,758 8,055
---------- ----------
Total current liabilities......................... 348,472 187,252
Long-term borrowings................................... 170,404 353,770
Deferred income taxes.................................. 112,707 100,316
Other noncurrent liabilities........................... 50,669 50,211
---------- ----------
Total liabilities................................. 682,252 691,549
---------- ----------
Commitment and contingencies
Shareholders' equity
Preferred stock:
Authorized: 5,000,000 shares, $.01 per share par
value; Issued: None............................. -- --
Common stock:
Authorized: 150,000,000 shares, $.01 per share par
value Issued: 81,453,771 shares at June 30, 2007
and 80,669,121 shares at December 31, 2006...... 815 538
Additional paid-in capital........................... 350,036 326,968
Retained earnings.................................... 696,206 638,579
Treasury stock at cost: 138,177 shares at June 30,
2007 and 123,383 shares at December 31, 2006...... (3,768) (3,248)
Unearned compensation................................ (12,790) (9,551)
Accumulated other comprehensive income............... 36,361 25,986
---------- ----------
Total shareholders' equity........................ 1,066,860 979,272
---------- ----------
Total liabilities and shareholders' equity........ $1,749,112 $1,670,821
========== ==========

See Notes to Condensed Consolidated Financial Statements.

IDEX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

SECOND QUARTER SIX MONTHS ENDED
ENDED JUNE 30, JUNE 30,
------------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------

Net sales.................................... $344,482 $296,573 $677,750 $562,961
Cost of sales................................ 196,948 173,652 390,552 329,907
-------- -------- -------- --------
Gross profit................................. 147,534 122,921 287,198 233,054
Selling, general and administrative
expenses................................... 78,669 66,937 156,781 129,292
-------- -------- -------- --------
Operating income............................. 68,865 55,984 130,417 103,762
Other income -- net.......................... 521 258 1,094 269
Interest expense............................. 6,058 4,061 12,437 7,002
-------- -------- -------- --------
Income from continuing operations before
income taxes............................... 63,328 52,181 119,074 97,029
Provision for income taxes................... 21,493 17,562 40,408 32,829
-------- -------- -------- --------
Income from continuing operations............ 41,835 34,619 78,666 64,200
Income (loss) from discontinued operations,
net of tax................................. (205) 337 (369) 834
-------- -------- -------- --------
Net income................................... $ 41,630 $ 34,956 $ 78,297 $ 65,034
======== ======== ======== ========
Basic earnings per common share:
Continuing operations........................ $ .52 $ .44 $ .98 $ .81
Discontinued operations...................... -- -- (.01) .01
-------- -------- -------- --------
Net income................................... $ .52 $ .44 $ .97 $ .82
======== ======== ======== ========
Diluted earnings per common share:
Continuing operations........................ $ .51 $ .43 $ .96 $ .79
Discontinued operations...................... -- -- -- .01
-------- -------- -------- --------
Net income................................... $ .51 $ .43 $ 96 $ .80
======== ======== ======== ========
Share data:
Basic weighted average common shares
outstanding................................ 80,595 79,521 80,429 79,237
Diluted weighted average common shares
outstanding................................ 82,046 81,043 81,855 80,928

See Notes to Condensed Consolidated Financial Statements.

IDEX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)

COMMON STOCK & ACCUMULATED
ADDITIONAL OTHER TOTAL
PAID-IN RETAINED TREASURY UNEARNED COMPREHENSIVE SHAREHOLDERS'
CAPITAL EARNINGS STOCK COMPENSATION INCOME EQUITY
-------------- -------- -------- ------------ ------------- -------------

Balance, December 31, 2006.............. $327,506 $638,579 $(3,248) $ (9,551) $25,986 $ 979,272
Net income.............................. 78,297 78,297
Other comprehensive income, net of tax
Cumulative translation adjustment..... 9,157 9,157
Amortization of retirement
obligations........................ 1,218 1,218
------- ----------
Other comprehensive income............ 10,375 10,375
------- ----------
Comprehensive income.................. 88,672
----------
Issuance of 615,377 shares of common
stock from exercise of stock options
and deferred compensation plans....... 17,926 17,926
Issuance of 128,549 shares of restricted
common stock.......................... 5,419 (5,419) --
Amortization of restricted common stock
award................................. 2,180 2,180
Restricted shares surrendered for tax
withholdings.......................... (520) (520)
Cash dividends declared -- $.24 per
common share outstanding.............. (19,466) (19,466)
Cumulative effect of change in
accounting for uncertainties in income
taxes (FIN 48 -- See Note 15)......... (1,204) (1,204)
-------- -------- ------- -------- ------- ----------
Balance, June 30, 2007.................. $350,851 $696,206 $(3,768) $(12,790) $36,361 $1,066,860
======== ======== ======= ======== ======= ==========

See Notes to Condensed Consolidated Financial Statements.

IDEX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

SIX MONTHS
ENDED JUNE 30,
----------------
2007
----------------

Cash flows from operating activities of continuing operations
Net income.......................................................................................... $ 78,297
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (income) from discontinued operations........................................................ 369
Gain on sale of fixed assets...................................................................... --
Depreciation and amortization..................................................................... 14,079
Amortization of intangible assets................................................................. 4,400
Amortization of debt issuance expenses............................................................ 230
Stock-based compensation expense.................................................................. 6,721
Deferred income taxes............................................................................. 2,812
Excess tax benefit from stock-based compensation.................................................. (3,651)
Changes in (net of the effect from acquisitions):
Receivables....................................................................................... (20,203)
Inventories.................................................................................... (4,344)
Trade accounts payable......................................................................... 9,559
Accrued expenses............................................................................... (6,880)
Other -- net...................................................................................... (1,821)
--------
Net cash flows provided by operating activities of continuing operations..................... 79,568
Cash flows from investing activities of continuing operations
Purchases of property, plant and equipment........................................................ (12,830)
Acquisition of businesses, net of cash acquired................................................... (56,706)
Proceeds from fixed assets disposals.............................................................. --
Other............................................................................................. --
--------
Net cash flows used in investing activities of continuing operations......................... (69,536)
Cash flows from financing activities of continuing operations
Borrowings under credit facilities for acquisitions............................................... 24,177
Borrowings under credit facilities................................................................ 21,758
Payments under credit facilities.................................................................. (81,296)
Dividends paid.................................................................................... (17,763)
Distributions (to) from discontinued operations................................................... (560)
Proceeds from stock option exercises.............................................................. 9,535
Excess tax benefit from stock-based compensation.................................................. 3,651
Other -- net...................................................................................... 1,768
--------
Net cash flows (used in) provided by financing activities of continuing operations........... (38,730)
Cash flows from discontinued operations
Net cash (used in) provided by operating activities of discontinued operations.................... (561)
Net cash used in investing activities of discontinued operations.................................. --
Net cash provided by (used in) financing activities of discontinued operations.................... 560
--------
Net cash flows used in discontinued operations............................................... (1)
Effect of exchange rate changes on cash and cash equivalents........................................ 2,782
--------
Net decrease in cash................................................................................ (25,917)
Cash and cash equivalents at beginning of year...................................................... 77,943
--------
Cash and cash equivalents at end of period.......................................................... 52,026
--------
Less-cash, end of period-discontinued operations.................................................... 1
--------
Cash and cash equivalents at end of period-continuing operations.................................... $ 52,025
========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest.......................................................................................... $ 12,253
Income taxes...................................................................................... 40,364
Significant non-cash activities:
Issuance of restricted stock...................................................................... $ 5,419
Debt acquired with acquisition of business........................................................ 1,571
Capital expenditures included in accounts payable................................................. 300

SIX MONTHS
ENDED JUNE 30,
----------------
2006
----------------

Cash flows from operating activities of continuing operations
Net income.......................................................................................... $ 65,034
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (income) from discontinued operations........................................................ (834)
Gain on sale of fixed assets...................................................................... (810)
Depreciation and amortization..................................................................... 12,825
Amortization of intangible assets................................................................. 1,270
Amortization of debt issuance expenses............................................................ 228
Stock-based compensation expense.................................................................. 5,678
Deferred income taxes............................................................................. (20,263)
Excess tax benefit from stock-based compensation.................................................. (4,633)
Changes in (net of the effect from acquisitions):
Receivables....................................................................................... (13,052)
Inventories.................................................................................... (801)
Trade accounts payable......................................................................... 7,125
Accrued expenses............................................................................... 20,169
Other -- net...................................................................................... (3,189)
---------
Net cash flows provided by operating activities of continuing operations..................... 68,747
Cash flows from investing activities of continuing operations
Purchases of property, plant and equipment........................................................ (9,703)
Acquisition of businesses, net of cash acquired................................................... (120,186)
Proceeds from fixed assets disposals.............................................................. 1,048
Other............................................................................................. (800)
---------
Net cash flows used in investing activities of continuing operations......................... (129,641)
Cash flows from financing activities of continuing operations
Borrowings under credit facilities for acquisitions............................................... 44,000
Borrowings under credit facilities................................................................ 35,813
Payments under credit facilities.................................................................. (48,702)
Dividends paid.................................................................................... (14,330)
Distributions (to) from discontinued operations................................................... 15
Proceeds from stock option exercises.............................................................. 13,343
Excess tax benefit from stock-based compensation.................................................. 4,633
Other -- net...................................................................................... (504)
---------
Net cash flows (used in) provided by financing activities of continuing operations........... 34,268
Cash flows from discontinued operations
Net cash (used in) provided by operating activities of discontinued operations.................... 257
Net cash used in investing activities of discontinued operations.................................. (321)
Net cash provided by (used in) financing activities of discontinued operations.................... (15)
---------
Net cash flows used in discontinued operations............................................... (79)
Effect of exchange rate changes on cash and cash equivalents........................................ 476
---------
Net decrease in cash................................................................................ (26,229)
Cash and cash equivalents at beginning of year...................................................... 77,290
---------
Cash and cash equivalents at end of period.......................................................... 51,061
---------
Less-cash, end of period-discontinued operations.................................................... 10
---------
Cash and cash equivalents at end of period-continuing operations.................................... $ 51,051
=========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest.......................................................................................... $ 6,458
Income taxes...................................................................................... 31,419
Significant non-cash activities:
Issuance of restricted stock...................................................................... $ 3,531
Debt acquired with acquisition of business........................................................ 7,120
Capital expenditures included in accounts payable................................................. --

See Notes to Condensed Consolidated Financial Statements.

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of IDEX Corporation ("IDEX" or the
"Company") have been prepared in accordance with the instructions to Form 10-Q
under the Securities Exchange Act of 1934, as amended. The statements are
unaudited but include all adjustments, consisting only of recurring items,
except as noted, which the Company considers necessary for a fair presentation
of the information set forth herein. The results of operations for the three and
six months ended June 30, 2007 are not necessarily indicative of the results to
be expected for the entire year.

The consolidated financial statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations should be read in
conjunction with the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2006.

UNCERTAINTY IN INCOME TAXES

Effective January 1, 2007, the Company adopted Financial Accounting
Standards Board ("FASB") Interpretation ("FIN") No. 48, "Accounting for
Uncertainty in Income Taxes -- an interpretation of SFAS No. 109." This
interpretation clarifies the accounting and disclosure for uncertain income tax
positions relating to the uncertainty about whether a tax return position will
ultimately be sustained by the respective tax authorities. See note 14 for the
impact of FIN 48 on the Company's consolidated financial statements.

STOCK SPLIT

On April 4, 2007, the Company's Board of Directors authorized a three-for-
two common stock split effected in the form of a 50% dividend payable on May 21,
2007, to shareholders of record on May 7, 2007. Par value of common stock
remained at $.01 per share. All prior share and per share amounts have been
restated to reflect the stock split.

CASH FLOW PRESENTATION

In previously issued financial statements the Company incorrectly presented
borrowings and payments under credit facilities as net repayments in the
financing activities section of the Consolidated Statements of Cash Flows.
Accordingly, such presentation in the accompanying financial statements for the
six months ended June 30, 2006 has been restated to separate line items
borrowings and payments under credit facilities. This correction does not affect
net cash used in financing activities of continuing operations as previously
presented.

2. RESTATEMENT OF 2006 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

In December 2006, the Company adopted the provisions of Statement of
Financial Accounting Standard (SFAS) No. 158, "Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans." The transition adjustment
related to the adoption of SFAS No. 158 was $21.1 million. Subsequent to the
issuance of the Company's 2006 consolidated financial statements, the Company's
management determined that the Company had incorrectly included the transition
adjustment within Other comprehensive income and Comprehensive income for the
year ended December 31, 2006 in its Consolidated Statements of Shareholders'
Equity in the 2006 Annual Report on Form 10-K. The transition adjustment should
have been presented as an adjustment to the ending balance of Accumulated other
comprehensive income within the 2006 Consolidated Statement of Shareholders'
Equity.

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

The following is a summary of the effect of the adjustment on the Company's
2006 Consolidated Statement of Shareholders' Equity. The adjustment has no
impact on Consolidated Shareholders' Equity but rather only the components
listed below.

2006 2006
AS REPORTED ADJUSTMENT AS RESTATED
----------- ---------- -----------
(IN THOUSANDS)

Other comprehensive income................... $ 6,710 $21,132 $ 27,842
Comprehensive income......................... $153,381 $21,132 $174,513

It is the Company's intention to correct its presentation for the year
ended December 31, 2006 in its 2007 Annual Report on Form 10-K.

3. ACQUISITIONS

On February 14, 2007, the Company acquired Faure Herman SA ("Faure
Herman"), a leading provider of ultrasonic and helical turbine flow meters used
in the custody transfer and control of high value fluids and gases.
Headquartered in La Ferte Bernard, France, Faure Herman has sales offices in
Europe and North America, with annual revenues of approximately $22 million.
Faure Herman operates as part of the Company's Liquid Controls business within
its Fluid & Metering Technologies segment. IDEX acquired Faure Herman for an
aggregate purchase price of $25.8 million, consisting of $24.2 million in cash
and the assumption of approximately $1.6 million of debt. Approximately $12.9
million of the cash payment was financed by borrowings under the Company's
credit facility. Goodwill and intangible assets recognized as part of this
transaction were $13.3 million and $7.7 million, respectively. The $13.3 million
of goodwill is not deductible for tax purposes.

On June 12, 2007, the Company acquired Quadro Engineering ("Quadro"), a
leading provider of particle control solutions for the pharmaceutical and bio-
pharmaceutical markets. Quadro's core capabilities include fine milling,
emulsification and special handling of liquid and solid particulates for
laboratory, pilot phase and production scale processing within the
pharmaceutical and bio-pharmaceutical markets. Headquartered in Waterloo,
Ontario, Canada, Quadro operates as a standalone unit within the Company's Fluid
& Metering Technologies segment. IDEX acquired Quadro for a purchase price of
$32.1 million, consisting entirely of cash. Approximately $11.3 million of the
cash payment was financed by borrowings under the Company's credit facility.
Goodwill and intangible assets recognized as part of this transaction were $7.3
million and $15.7 million, respectively. Of the $7.3 million of goodwill,
approximately $5.3 million is expected to be deductible for tax purposes.

The purchase price for Faure Herman and Quadro, including transaction
costs, has been allocated to the assets acquired and liabilities assumed based
on estimated fair values at the date of the acquisitions. The purchase price
allocation is preliminary and further refinements may be necessary pending
finalization of asset valuations.

The results of operations for these acquisitions have been included within
the financial results from the date of the acquisition. The Company does not
consider these acquisitions to be material to its results of operations for any
of the periods presented.

4. DISCONTINUED OPERATIONS

On July 11, 2006, IDEX sold Lubriquip, its lubricant dispensing business
that operated as part of IDEX's Dispensing Equipment segment.

During the third quarter of 2006, the Company determined that Halox, its
chemical and electrochemical systems product line operating as a unit of
Pulsafeeder in IDEX's Fluid & Metering Technologies segment, met the criteria to
be classified as a discontinued operation. The Company is marketing the Halox
operation and conducting other actions with the intention to complete the sale
within one year.

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

Financial information for the three and six months ended June 30, 2006 have
been restated to present the operating results of Halox and Lubriquip as
discontinued operations.

Summarized results of the Company's discontinued operations are as follows:

SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------- ----------------
2007 2006 2007 2006
----- ------ ------ -------
(IN THOUSANDS)

Revenue...................................... $ 515 $7,842 $1,136 $16,525
===== ====== ====== =======
Income (loss) from discontinued operations
before income taxes........................ $(315) $ 484 $ (567) $ 1,209
Income tax benefit (provision)............... 110 (147) 198 (375)
----- ------ ------ -------
Income (loss) from discontinued operations... $(205) $ 337 $ (369) $ 834
===== ====== ====== =======

Total assets and liabilities expected to be transferred as part of the sale
of discontinued operations held for sale at June 30, 2007 and December 31, 2006
were as follows:

JUNE 30, DECEMBER 31,
2007 2006
-------- ------------
(IN THOUSANDS)

Cash and cash equivalents.............................. $ 1 $ 2
Receivables, net....................................... 303 424
Inventory.............................................. 342 272
Other current assets................................... 19 20
Property, plant and equipment, net equivalents......... 111 111
---- ----
Assets held for sale................................. $776 $829
==== ====
Accounts payable....................................... $ 12 $154
Other liabilities...................................... 117 219
---- ----
Liabilities held for sale......................... $129 $373
==== ====

5. BUSINESS SEGMENTS

Information on IDEX's business segments from continuing operations is
presented below, based on the nature of products and services offered. IDEX
evaluates performance based on several factors, of which operating income is the
primary financial measure. Intersegment sales are accounted for at fair value as
if the sales were to third parties.

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

SECOND QUARTER SIX MONTHS ENDED
ENDED JUNE 30, JUNE 30,
------------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------
(IN THOUSANDS)

Net sales
Fluid & Metering Technologies:
External customers................... $140,583 $107,387 $276,885 $209,025
Intersegment sales................... 511 453 915 735
-------- -------- -------- --------
Total group sales.................. 141,094 107,840 277,800 209,760
-------- -------- -------- --------
Health & Science Technologies:
External customers................... 81,232 80,219 161,110 142,346
Intersegment sales................... 1,138 1,080 1,980 1,974
-------- -------- -------- --------
Total group sales.................. 82,370 81,299 163,090 144,320
-------- -------- -------- --------
Dispensing Equipment:
External customers................... 49,859 44,415 97,752 85,823
Intersegment sales................... -- -- -- --
-------- -------- -------- --------
Total group sales.................. 49,859 44,415 97,752 85,823
-------- -------- -------- --------
Fire & Safety/Diversified Products:
External customers................... 72,808 64,552 142,003 125,767
Intersegment sales................... -- -- 1 1
-------- -------- -------- --------
Total group sales.................. 72,808 64,552 142,004 125,768
-------- -------- -------- --------
Intersegment elimination................ (1,649) (1,533) (2,896) (2,710)
-------- -------- -------- --------
Total net sales.................... $344,482 $296,573 $677,750 $562,961
======== ======== ======== ========
Operating income
Fluid & Metering Technologies........... $ 30,133 $ 21,646 $ 59,884 $ 41,405
Health & Science Technologies........... 15,167 14,513 29,030 26,793
Dispensing Equipment.................... 14,248 11,688 25,952 22,018
Fire & Safety/Diversified Products...... 18,117 16,267 33,475 29,922
Corporate office and other.............. (8,800) (8,130) (17,924) (16,376)
-------- -------- -------- --------
Total operating income.......... $ 68,865 $ 55,984 $130,417 $103,762
======== ======== ======== ========

6. EARNINGS PER COMMON SHARE

Earnings per common share ("EPS") are computed by dividing net income by
the weighted average number of shares of common stock (basic) plus common stock
equivalents outstanding (diluted) during the period. Common stock equivalents
consist of stock options, which have been included in the calculation of
weighted average shares outstanding using the treasury stock method, unvested
restricted shares, and shares issuable in connection with

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

certain deferred compensation agreements ("DCUs"). Basic weighted average shares
reconciles to diluted weighted average shares as follows:

SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
--------------- ---------------
2007 2006 2007 2006
------ ------ ------ ------
(IN THOUSANDS)

Basic weighted average common shares
outstanding................................ 80,595 79,521 80,429 79,237
Dilutive effect of stock options, unvested
restricted shares, and DCUs................ 1,451 1,522 1,426 1,691
------ ------ ------ ------
Diluted weighted average common shares
outstanding................................ 82,046 81,043 81,855 80,928
====== ====== ====== ======

Options to purchase approximately 1.7 million and 1.4 million shares of
common stock as of June 30, 2007 and 2006, respectively, were not included in
the computation of diluted EPS because the exercise price was greater than the
average market price of the Company's common stock and, therefore, the effect of
their inclusion would be antidilutive.

7. INVENTORIES

The components of inventories as of June 30, 2007 and December 31, 2006
were:

JUNE 30, 2007 DECEMBER 31, 2006
------------- -----------------
(IN THOUSANDS)

Raw materials.......................................... $ 62,668 $ 63,360
Work-in-process........................................ 19,944 16,420
Finished goods......................................... 91,442 80,907
-------- --------
Total................................................ $174,054 $160,687
======== ========

Inventories carried on a LIFO basis amounted to $144.2 million and $133.7
million at June 30, 2007 and December 31, 2006, respectively. The excess of
current cost over LIFO inventory value amounted to $3.8 million and $3.1 million
at June 30, 2007 and December 31, 2006 respectively.

8. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months ended
June 30, 2007, by business group, were as follows:

FLUID & METERING HEALTH & SCIENCE DISPENSING FIRE & SAFETY/
TECHNOLOGIES TECHNOLOGIES EQUIPMENT DIVERSIFIED PRODUCTS TOTAL
---------------- ---------------- ---------- -------------------- --------
(IN THOUSANDS)

Balance at December 31, 2006... $304,464 $333,801 $128,457 $145,878 $912,600
Foreign currency translation... 1,246 70 1,512 1,166 3,994
Acquisitions................... 20,585 -- -- -- 20,585
Acquisition adjustments........ 640 (195) -- -- 445
-------- -------- -------- -------- --------
Balance at June 30, 2007....... $326,935 $333,676 $129,969 $147,044 $937,624
======== ======== ======== ======== ========

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

The following table provides the gross carrying value and accumulated
amortization for each major class of intangible asset as of June 30, 2007 and
December 31, 2006:

AT JUNE 30, 2007 AT DECEMBER 31, 2006
----------------------- -----------------------
GROSS GROSS
CARRYING ACCUMULATED AVERAGE CARRYING ACCUMULATED
AMOUNT AMORTIZATION LIFE AMOUNT AMORTIZATION
-------- ------------ ------- -------- ------------
(IN THOUSANDS) (IN THOUSANDS)

Amortizable intangible assets:
Patents............................ $ 7,854 $ (4,706) 11 $ 8,508 $(5,171)
Trade names........................ 34,313 (2,139) 17 30,081 (1,224)
Customer relationships............. 72,104 (3,795) 17 64,796 (1,609)
Non-compete agreements............. 4,313 (1,523) 4 4,087 (702)
Unpatented technology.............. 17,215 (499) 15 4,727 (127)
Other.............................. 6,279 (762) 5 6,457 (560)
-------- -------- -------- -------
Total amortizable intangible
assets........................ 142,078 (13,424) 118,656 (9,393)
Banjo trade name..................... 62,100 -- 62,100 --
-------- -------- -------- -------
Balance at June 30, 2007............. $204,178 $(13,424) $180,756 $(9,393)
======== ======== ======== =======

9. ACCRUED EXPENSES

The components of accrued expenses as of June 30, 2007 and December 31,
2006 were:

JUNE 30, DECEMBER 31,
2007 2006
-------- ------------
(IN THOUSANDS)

Payroll and related items............................. $36,694 $32,897
Management incentive compensation..................... 5,424 15,279
Income taxes payable.................................. 4,763 10,897
Deferred income taxes................................. 1,262 1,359
Insurance............................................. 11,270 10,338
Other................................................. 29,941 24,400
------- -------
Total accrued expenses.............................. $89,354 $95,170
======= =======

10. BORROWINGS

Effective February 2007 the $150.0 million of 6.875% Senior Notes due
February 15, 2008 were reclassified from long-term borrowings to short-term
borrowings.

In addition to the $150.0 million of 6.875% Senior Notes due February 15,
2008, the Company also has a $600.0 million domestic multi-currency bank
revolving credit facility ("Credit Facility"), which expires December 21, 2011.
With $160.0 million outstanding under the facility at June 30, 2007, and
outstanding letters of credit totaling $5.7 million, the maximum amount
available under the Credit Facility was $434.3 million. Interest is payable
quarterly on the outstanding balance at the bank agent's reference rate or, at
the Company's election, at LIBOR plus an applicable margin payable at maturity.
The applicable margin is based on the credit rating of our Senior Notes, and can
range from 24 basis points to 50 basis points. Based on the Company's BBB rating
at June 30, 2007, the applicable margin was 40 basis points. We also pay an
annual fee of 10 basis points on the total Credit Facility.

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

There are two financial covenants that the Company is required to maintain.
As defined in the agreement, the minimum interest coverage ratio is 3.0 to 1 and
the maximum leverage ratio is 3.25 to 1. At June 30, 2007, the Company was in
compliance with both of these financial covenants.

We also have a one-year, renewable $30.0 million demand line of credit
("Short-Term Facility"), which expires on December 12, 2007. Borrowings under
the Short-Term Facility are at LIBOR plus the applicable margin in effect under
the Credit Facility. At June 30, 2007, there were no borrowings outstanding
under this facility.

11. PREFERRED STOCK

The Company had five million shares of preferred stock authorized but
unissued at June 30, 2007 and December 31, 2006.

12. SHARE-BASED COMPENSATION

Effective January 1, 2006, the Company adopted Statement of Financial
Accounting Standard (SFAS) No. 123R using the modified prospective method, and
thus did not restate any prior period amounts. Under this method, compensation
cost in the three and six months ending June 30, 2007 include the portion
vesting in the period for (1) all share-based payments granted prior to, but not
vested as of December 31, 2005, based on the grant date fair value estimated
using the Black-Scholes option-pricing model in accordance with the original
provisions of SFAS No. 123 and (2) all share-based payments granted subsequent
to December 31, 2005, based on the grant date fair value estimated using the
Binomial lattice option-pricing model.

On April 3, 2007, the Company granted approximately .9 million stock
options and .1 million restricted shares, respectively.

Total compensation cost for stock options is as follows:

SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------- -----------------
2007 2006 2007 2006
------- ------ ------- -------
(IN THOUSANDS)

General and administrative expenses............... $ 2,646 $2,032 $ 3,971 $ 3,547
Cost of goods sold................................ 355 310 571 533
------- ------ ------- -------
Total expense before income taxes................. 3,001 2,342 4,542 4,080
Income tax benefit................................ (1,093) (803) (1,654) (1,325)
------- ------ ------- -------
Total expense after income taxes.................. $ 1,908 $1,539 $ 2,888 $ 2,755
======= ====== ======= =======

Total compensation cost for restricted stock is as follows:

SECOND QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------- ---------------
2007 2006 2007 2006
------ ----- ------ ------
(IN THOUSANDS)

General and administrative expenses................. $1,268 $ 917 $2,167 $1,595
Cost of goods sold.................................. 8 3 12 3
------ ----- ------ ------
Total expense before income taxes................... 1,276 920 2,179 1,598
Income tax benefit.................................. (285) (190) (451) (270)
------ ----- ------ ------
Total expense after income taxes.................... $ 991 $ 730 $1,728 $1,328
====== ===== ====== ======

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

Recognition of compensation cost within the Consolidated Statements of
Operations is consistent with recognition of cash compensation for the same
employees, and compensation cost capitalized as part of inventory was
immaterial.

As of June 30, 2007, there was $16.6 million of total unrecognized
compensation cost related to stock options that is expected to be recognized
over a weighted-average period of 1.5 years, and $9.4 million of total
unrecognized compensation cost related to restricted stock that is expected to
be recognized over a weighted-average period of 1.4 years.

13. RETIREMENT BENEFITS

The Company sponsors several qualified and nonqualified defined benefit and
defined contribution pension plans and other postretirement plans for its
employees. The following tables provide the components of net periodic benefit
cost for its major defined benefit plans and its other postretirement plans.

PENSION BENEFITS
---------------------------------------
SECOND QUARTER ENDED JUNE 30,
---------------------------------------
2007 2006
------------------ ------------------
U.S. NON-U.S. U.S. NON-U.S.
------- -------- ------- --------
(IN THOUSANDS)

Service cost..................................... $ 426 $ 223 $ 789 $ 165
Interest cost.................................... 1,082 396 1,032 288
Expected return on plan assets................... (1,299) (267) (1,208) (183)
Net amortization................................. 699 188 742 130
------- ----- ------- -----
Net periodic benefit cost...................... $ 908 $ 540 $ 1,355 $ 400
======= ===== ======= =====

PENSION BENEFITS
---------------------------------------
SIX MONTHS ENDED JUNE 30,
---------------------------------------
2007 2006
------------------ ------------------
U.S. NON-U.S. U.S. NON-U.S.
------- -------- ------- --------
(IN THOUSANDS)

Service cost..................................... $ 938 $ 444 $ 1,533 $ 327
Interest cost.................................... 2,144 782 1,977 570
Expected return on plan assets................... (2,621) (528) (2,417) (365)
Net amortization................................. 1,365 373 1,367 256
------- ------ ------- -----
Net periodic benefit cost...................... $ 1,826 $1,071 $ 2,460 $ 788
======= ====== ======= =====

OTHER BENEFITS
-----------------------------
SECOND
QUARTER SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
----------- ---------------
2007 2006 2007 2006
---- ---- ------ ------
(IN
THOUSANDS)

Service cost......................................... $132 $127 $ 255 $ 237
Interest cost........................................ 330 373 655 692
Net amortization..................................... 90 66 173 123
---- ---- ------ ------
Net periodic benefit cost.......................... $552 $566 $1,083 $1,052
==== ==== ====== ======

IDEX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

The Company previously disclosed in its financial statements for the year
ended December 31, 2006, that it expected to contribute approximately $5.1
million to these pension plans and $1.3 million to its other postretirement
benefit plans in 2007. As of June 30, 2007, $3.3 million of contributions have
been made to the pension plans and $.5 million has been made to its other
postretirement benefit plans. The Company presently anticipates contributing up
to an additional $2.6 million in 2007 to fund these pension plans and other
postretirement benefit plans.

14. LEGAL PROCEEDINGS

IDEX is a party to various legal proceedings arising in the ordinary course
of business, none of which is expected to have a material adverse effect on its
business, financial condition, results of operations or cash flows.

15. INCOME TAXES

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 to $21.5 million in the second quarter of 2007 from
$17.6 million in the second quarter of 2006. The effective tax rate increased to
33.9% in the second quarter of 2007 from 33.7% in the second quarter of 2006.

The Company and it subsidiaries file income tax returns in the U.S. federal
jurisdiction, and various state and foreign jurisdictions. Effective January 1,
2007, the Company adopted FIN 48. In accordance with FIN 48, the Company
recognized a cumulative-effect adjustment of $1.2 million, increasing its
liability for unrecognized tax benefits, interest, and penalties and reducing
the January 1, 2007 balance of retained earnings.

At January 1, 2007, the Company had $6.6 million in unrecognized tax
benefits. If recognized, $5.8 million of our unrecognized tax benefits would
reduce our income tax expense and effective tax rate. Included in the balance of
unrecognized tax benefits at January 1, 2007, is $.5 million related to tax
positions for which it is reasonably possible that the total amounts could
significantly change during the next twelve months. This range represents a
decrease in unrecognized tax benefits and depends on the ultimate closure date
of various examinations.

The Company recognizes accrued interest and penalties related to
unrecognized tax benefits in income tax expense. At January 1, 2007, the Company
had accrued $.9 million and $.2 million for the potential payment of interest
and penalties, respectively.

The Company is subject to U.S. Federal income tax examinations for the tax
years 2000 through 2006, however the 2001 and 2002 tax years are limited to
adjustments to the research and development credit only. The Company is subject
to non-U.S. income tax examinations for the tax years 2002 through 2006. In
addition, the Company is subject to state and local income tax examinations for
the tax years 2002 through 2006 in jurisdictions for which tax returns have been
filed.

During the second quarter of 2007, unrecognized net tax benefits were
reduced by $0.7 million, of which $0.6 million reduced the effective tax rate
accordingly.

16. NEW ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements,"
which defines fair value, establishes a framework for measuring fair value in
accordance with generally accepted accounting principles and expands disclosures
about fair value measurements. This statement is effective for fiscal periods
beginning after November 15, 2007, and does not require any new fair value
measurements. Management is currently evaluating the requirements of SFAS No.
157, and has not yet determined the impact on the consolidated financial
statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities -- Including an Amendment of FASB
Statement No. 115". SFAS No. 159 permits entities to choose to measure many
financial instruments and certain other items at fair value. SFAS No. 159 is
effective for fiscal years beginning after November 15, 2007. The Company is in
the process of evaluating the impact this pronouncement may have on its results
of operations and financial condition.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT

The "Historical Overview and Outlook" and the "Liquidity and Capital
Resources" sections of this management's discussion and analysis of our
financial condition and operations contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Exchange Act of 1934, as amended. These statements may relate to,
among other things, capital expenditures, cost reductions, cash flow, and
operating improvements and are indicated by words or phrases such as
"anticipate," "estimate," "plans," "expects," "projects," "should," "will,"
"management believes," "the company believes," "we believe," "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 filing. The risks and uncertainties
include, but are not limited to, the following: economic and political
consequences resulting from terrorist attacks and wars; 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
our order rates and results, particularly in light of the low levels of order
backlogs we typically maintain; our 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 we operate; interest rates; capacity utilization and the effect this
has on costs; labor markets; market conditions and material costs; and
developments with respect to contingencies, such as litigation and environmental
matters. The forward-looking statements included here are only made as of the
date of this report, and we undertake no obligation to publicly update them to
reflect subsequent events or circumstances. Investors are cautioned not to rely
unduly on forward-looking statements when evaluating the information presented
here.

HISTORICAL OVERVIEW AND OUTLOOK

IDEX Corporation ("IDEX") or the ("Company") is an applied solutions
company specializing in fluid and metering technologies, health and science
technologies, dispensing equipment, and fire, safety and other diversified
products built to its customers' specifications. Our products are sold in niche
markets to a wide range of industries throughout the world. Accordingly, our
businesses are affected by levels of industrial activity and economic conditions
in the U.S. and in other countries where we do 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 among
the factors that influence the demand for our products.

IDEX consists of four reportable segments: Fluid & Metering Technologies,
Health & Science Technologies, Dispensing Equipment and Fire &
Safety/Diversified Products.

The Fluid & Metering Technologies Group produces pumps, compressors, flow
meters, and related controls for the movement of liquids and gases in a diverse
range of end markets from industrial infrastructure to food and beverage. The
Health & Science Technologies Group produces a wide variety of small scale,
highly accurate pumps, valves, fittings and medical devices, as well as
compressors used in medical, dental and industrial applications. The Dispensing
Equipment Group produces highly engineered equipment for dispensing, metering
and mixing colorants, paints, inks and dyes, hair colorants and other personal
care products, as well as refinishing equipment. The Fire &Safety/Diversified
Products Group produces firefighting pumps, rescue tools, lifting bags and other
components and systems for the fire and rescue industry; and engineered
stainless steel banding and clamping devices used in a variety of industrial and
commercial applications.

IDEX has a history of achieving above-average operating margins. Our
operating margins have exceeded the average operating margin for the companies
that comprise the Value Line Composite Index (VLCI) every year since 1988. We
view the VLCI operating performance statistics as a proxy for an average
industrial company. Our operating margins are influenced by, among other things,
utilization of facilities as sales volumes change and inclusion of newly
acquired businesses.

Some of our key 2007 financial highlights for the six months ended June 30,
2007 were as follows:

- Sales of $677.8 million rose 20%; base business sales -- excluding
acquisitions and foreign currency translation -- were up 7%.

- Gross margins improved 100 basis points to 42.4% of sales, while
operating margins at 19.2% were 80 basis points higher than a year ago.

- Income from continuing operations increased 23% to $78.7 million.

- Diluted EPS from continuing operations of $0.96 was 17 cents ahead of the
same period 2006.

- Net income increased 20% to $78.3 million.

- Diluted EPS of $0.96 was 16 cents ahead of the same period of 2006.

Our business units continue to deliver profitable sales growth as a result
of new product initiatives and market initiatives and our on-going commitment to
operational excellence. During the first six months of the year, organic sales
growth was 7 percent, reflecting particular strength in Fluid & Metering
Technologies at 7 percent and Fire & Safety/Diversified Products at 10 percent.
As we move forward, we believe we are well positioned in attractive product
segments buoyed by strong underlying industry fundamentals. We are leveraging
commercial and operational excellence to effectively serve our customers, expand
our market position and generate profitable growth.

The following forward-looking statements are qualified by the cautionary
statement under the Private Securities Litigation Reform Act set forth above.

As a short-cycle business, our performance is reliant upon the current pace
of incoming orders, and we have limited visibility on future business
conditions. We believe IDEX is well positioned for earnings expansion. This is
based on our favorable cost structure resulting from our operational excellence
discipline, our investment in new products, applications and global markets, and
our pursuit of strategic acquisitions to help drive IDEX's longer term
profitable growth.

RESULTS OF OPERATIONS

For purposes of this discussion and analysis section, reference is made to
the table on the following page and the Company's Consolidated Statements of
Operations included in Item 1. During the third quarter 2006, the Company
determined that Halox, its chemical and electrochemical systems business, met
the criteria to be classified as a discontinued operation. During the second
quarter, the Company determined that Lubriquip, its lubricant dispensing
business, met the criteria to be classified as a discontinued operation and was
subsequently sold July 11, 2006. Financial information for the three and six
months ended June 30, 2006 have been restated to present Halox and Lubriquip as
discontinued operations.

PERFORMANCE IN THE THREE MONTHS ENDED JUNE 30, 2007 COMPARED WITH THE SAME
PERIOD OF 2006

Sales in the three months ended June 30, 2007 were $344.5 million, a 16%
improvement from the comparable period last year. The increase was driven by
base business shipments of 6%, acquisitions accounted for 8% and foreign
currency translation contributed 2%. Sales to international customers from base
businesses represented approximately 47% of total sales in the current period
compared to 45% in the same period in 2006.

During the quarter, Fluid & Metering Technologies contributed 41% of sales
and 39% of operating income; Health & Science Technologies accounted for 24% of
sales and 20% of operating income; Dispensing Equipment accounted for 14% of
sales and 18% of operating income; and Fire & Safety/Diversified Products
represented 21% of sales and 23% of operating income.

Fluid & Metering Technologies Group sales of $141.1 million for the three
months ended June 30, 2007 rose $33.3 million, or 31% compared with 2006,
reflecting 7% base business growth, 23% for acquisitions and a 1% favorable
impact from foreign currency translation. In the second quarter of 2007, base
business sales grew

approximately 8% domestically and 6% internationally. Base business sales to
customers outside the U.S. were approximately 43% of total group sales during
the second quarter of both 2007 and 2006.

Health & Science Technologies Group sales of $82.4 million increased $1.1
million, or 1%, in the second quarter of 2007 compared with last year's second
quarter. The expected sales decline in specific OEM contracts resulted in more
than 200 basis points of lower sales growth in the 2007 quarter. In the second
quarter of 2007, base business sales decreased 5% domestically and increased 9%
internationally. Base business sales to customers outside the U.S. were
approximately 40% of total group sales in the second quarter of 2007, compared
to 37% in 2006.

Dispensing Equipment Group sales of $49.9 million increased $5.4 million,
or 12%, in the second quarter of 2007 compared with 2006. This increase reflects
a 7% increase in base business volume and 5% from favorable foreign currency
translation. In the second quarter of 2007, base business sales decreased 1%
domestically and increased 11% internationally. Base business sales to customers
outside the U.S. were approximately 69% of total group sales in the second
quarter of 2007, compared with 66% in the comparable quarter of 2006.

Fire & Safety/Diversified Products Group sales of $72.8 million increased
$8.3 million, or 13%, in the second quarter of 2007 compared with 2006. This
increase reflects a 10% increase in base business volume, with an additional 3%
of favorable foreign currency translation. In the first quarter of 2007, base
business sales increased 9% domestically and 10% internationally. Base business
sales to customers outside the U.S. were approximately 45% of total group sales
in the second quarter of both 2007 and 2006.

SECOND QUARTER SIX MONTHS
ENDED JUNE 30,(1) ENDED JUNE 30,(1)
------------------- -------------------
2007 2006 2007 2006
-------- -------- -------- --------

Fluid & Metering Technologies
Net sales.................................. $141,094 $107,840 $277,800 $209,760
Operating income(2)........................ 30,133 21,646 59,884 41,405
Operating margin........................... 21.4% 20.1% 21.6% 19.7%
Depreciation and amortization.............. $ 4,269 $ 2,507 $ 8,118 $ 4,740
Capital expenditures....................... 3,473 1,103 6,109 2,235
Health & Science Technologies
Net sales.................................. $ 82,370 $ 81,299 $163,090 $144,320
Operating income(2)........................ 15,167 14,513 29,030 26,793
Operating margin........................... 18.4% 17.9% 17.8% 18.6%
Depreciation and amortization.............. $ 2,277 $ 2,444 $ 4,846 $ 3,843
Capital expenditures....................... 1,129 1,506 2,780 2,383
Dispensing Equipment
Net sales.................................. $ 49,859 $ 44,415 $ 97,752 $ 85,823
Operating income(2)........................ 14,248 11,688 25,952 22,018
Operating margin........................... 28.6% 26.3% 26.5% 25.7%
Depreciation and amortization.............. $ 1,030 $ 1,052 $ 1,577 $ 2,065
Capital expenditures....................... 1,462 531 1,754 1,190
Fire & Safety/Diversified Products
Net sales.................................. $ 72,808 $ 64,552 $142,004 $125,768
Operating income(2)........................ 18,117 16,267 33,475 29,922
Operating margin........................... 24.9% 25.2% 23.6% 23.8%
Depreciation and amortization.............. $ 1,529 $ 1,540 $ 3,054 $ 3,078
Capital expenditures....................... 813 1,628 1,699 2,766
Company
Net sales.................................. $344,482 $296,573 $677,750 $562,961
Operating income(2)........................ 68,865 55,984 130,417 103,762
Operating margin........................... 20.0% 18.9% 19.2% 18.4%
Depreciation and amortization(3)........... $ 9,340 $ 7,802 $ 18,479 $ 14,095
Capital expenditures....................... 7,347 5,688 13,130 9,703

--------

(1) Second quarter data includes acquisition of Quadro (June 2007) in the
Fluid & Metering Technologies Group and EPI (May 2006) in the Health &
Science Technologies Group, while six month data includes acquisition of
Faure Herman (February 2007) and Quadro in the Fluid & Metering
Technologies Group, JUN-AIR (February 2006) and EPI in the Health &
Science Technologies Group and Airshore (January 2006) in the Fire &
Safety/Diversified Products Group from the dates of acquisition.

(2) Group operating income excludes unallocated corporate operating expenses.

(3) Excludes amortization of debt issuance expenses and unearned stock
compensation.

Gross profit of $147.5 million, in the second quarter of 2007, increased
$24.6 million, or 20%, from 2006. Gross profit as a percent of sales was 42.8%
in the second quarter of 2007 and 41.5% in 2006. The improved gross margins
primarily reflect volume leverage, the Company's strategic sourcing and other
operational excellence initiatives and acquisitions.

Selling, general and administrative (SG&A) expenses increased to $78.7
million in the second quarter of 2007 from $66.9 million in 2006. Higher total
SG&A expenses reflect acquisitions, volume-related expenses, and

reinvestment in the business to drive organic growth. As a percent of sales,
SG&A expenses were 22.8% for 2007 compared to 22.6% in 2006.

Operating income increased $12.9 million, or 23%, to $68.9 in the second
quarter of 2007 from $56.0 million in 2006, primarily reflecting higher volumes,
partially offset by increased SG&A expenses. Second quarter operating margins
were 20.0% of sales, 110 basis points higher than the second quarter of 2006.
The improvement from last year resulted from higher gross margins. In the Fluid
& Metering Technologies Group, operating income of $30.1 million and operating
margins of 21.4% in the second quarter of 2007 were up from the $21.6 million
and 20.1% recorded in 2006 principally due to strong global demand and
acquisitions. In the Health & Science Technologies Group, operating income of
$15.2 million and operating margins of 18.4% in the second quarter of 2007 were
up from the $14.5 million and 17.9% recorded in 2006 principally due to volume.
In the Dispensing Equipment Group, operating income of $14.2 million and
operating margins of 28.6% in the second quarter of 2007 were up from the $11.7
million and 26.3% recorded in 2006 principally due to improved market conditions
in Europe. Operating income in the Fire & Safety/Diversified Products Group of
$18.1 million was higher than the $16.3 recorded in 2006, due primarily to
increased volume. Operating margins within Fire & Safety/Diversified Products
Group of 24.9% in the current quarter were down from 25.2% in 2006, primarily
due to product mix.

IDEX'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 to $21.5 million in the second quarter of 2007 from $17.6
million in 2006. The effective tax rate increased slightly to 33.9% in the
current quarter from 33.7% in the second quarter of 2006.

Income from continuing operations for the current quarter was $41.8
million, 21% higher than the $34.6 million earned in the second quarter of 2006.
Diluted earnings per share from continuing operations in the second quarter of
2007 of $.51 increased $.08, or 19%, compared with the second quarter of 2006.

Net income for the current quarter of $41.6 million, which included a loss
from discontinued operations of $.2 million, increased from the $35.0 million
earned in the second quarter of 2006, which included income from discontinued
operations of $.3 million. Diluted earnings per share in the second quarter of
2007 of $.51 increased $.08, or 19%, compared with the second quarter of 2006.

PERFORMANCE IN THE SIX MONTHS ENDED JUNE 30 2007 COMPARED WITH THE SAME PERIOD
OF 2006

Sales in the six months ended June 30, 2007 were $677.8 million, a 20%
improvement from the comparable period last year. The increase was driven by
base business shipments of 7%, acquisitions accounted for 11% and foreign
currency translation contributed 2%. For the first six months of the year, base
business sales to international customers were approximately 45% of total sales
for both 2007 and 2006.

For the first six months, Fluid & Metering Technologies contributed 41% of
sales and 40% of operating income; Health & Science Technologies accounted for
24% of sales and 20% of operating income; Dispensing Equipment accounted for 14%
of sales and 17% of operating income; and Fire & Safety/Diversified Products
represented 21% of sales and 23% of operating income.

Fluid & Metering Technologies Group sales of $277.8 million for the six
months ended June 30, 2007 rose $68.0 million, or 32% compared with 2006,
reflecting 9% base business growth, 22% for acquisitions and a 1% favorable
impact from foreign currency translation. In the first six months of 2007, base
business sales grew approximately 8% domestically and 12% internationally. Base
business sales to customers outside the U.S. were approximately 43% of total
group sales during the first six months of 2007 compared with 42% in the
comparable period of 2006.

Health & Science Technologies Group sales of $163.1 million increased $18.8
million, or 13%, for the first six months of 2007 compared with 2006. This
increase was attributed to acquisitions which contributed 11%, an increase in
base business volume of 1% and favorable foreign currency translation of 1%. In
the first six months of 2007, base business sales were up slightly domestically
and increased 7% internationally. Base business sales to customers outside the
U.S. were approximately 37% of total group sales in 2007 and 35% in 2006.

Dispensing Equipment Group sales of $97.8 million increased $11.9 million,
or 14%, in the first six months of 2007 compared with 2006. This increase
reflects a 9% increase in base business volume and 5% from favorable foreign
currency translation. In the first six months of 2007, base business sales
increased 16% domestically and increased 5% internationally. Base business sales
to customers outside the U.S. were approximately 64% of total group sales in the
first six months of 2007 compared with 66% in the comparable period of 2006.

Fire & Safety/Diversified Products Group sales of $142.0 million increased
$16.2 million, or 13%, in the first six months of 2007 compared with 2006. This
increase reflects a 9% increase in base business volume, with an additional 4%
of favorable foreign currency translation. In the first six months of 2007, base
business sales increased 8% domestically and 10% internationally. Base business
sales to customers outside the U.S. were approximately 45% of total group sales
in the first six months of both 2007 and 2006.

Gross profit of $287.2 million, in the first six months of 2007, increased
$54.1 million, or 23%, from 2006. Gross profit as a percent of sales was 42.4%
in 2007 an increase from 41.4% in 2006. The improved gross margins primarily
reflect volume leverage and the Company's strategic sourcing and other
operational excellence initiatives.

SG&A expenses increased to $156.8 million in the first six months of 2007
from $129.3 million in 2006. Higher total SG&A expenses reflect acquisitions,
volume-related expenses, and reinvestment in the business to drive organic
growth. As a percent of sales, SG&A expenses were 23.2% for 2007 and 23.0% for
2006.

Operating income increased $26.7 million, or 26%, to $130.4 in the first
six months of 2007 from $103.8 million in 2006, primarily reflecting higher
volumes, partially offset by increased SG&A expenses. Operating margins for the
first six months of 2007 were 19.2% of sales, 80 basis points higher than the
first six months of 2006. The improvement from last year resulted from higher
gross margins. In the Fluid & Metering Technologies Group, operating income of
$59.9 million and operating margins of 21.6% in the first six months of 2007
were up from the $41.4 million and 19.7% recorded in 2006 principally due to
strong global demand and acquisitions. Operating income for the Health & Science
Technologies Group of $29.0 million was up from the $26.8 million recorded in
2006 principally due to volume. Operating margins within Health & Science
Technologies Group of 17.8% in the current period were down from 18.6% in 2006
primarily due to acquisitions and growth-related investments in the Company's
medical product lines. In the Dispensing Equipment Group, operating income of
$26.0 million and operating margins of 26.5% in the first six months of 2007
were up from the $22.0 million and 25.7% recorded in 2006 principally due to
improved market conditions in Europe, volume leverage and the impact of our
operational excellence initiatives. Operating income in the Fire &
Safety/Diversified Products Group of $33.5 million was higher than $29.9
recorded in 2006, due primarily to increased volume. Operating margins within
Fire & Safety/Diversified Products Group of 23.6% in the current period were
down slightly from 23.8% in 2006, primarily due to product mix.

Other income in the first six months of 2007 increased $.8 million compared
with 2006 primarily due to favorable foreign currency translation.

IDEX'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 to $40.4 million in the first six months of 2007 from
$32.8 million in 2006. The effective tax rate increased slightly to 33.9% in the
current period from 33.8% in 2006.

Income from continuing operations for the first six months was $78.7
million, 23% higher than the $64.2 million earned in the same period of 2006.
Diluted earnings per share from continuing operations in the first six months of
2007 of $.96 increased $.17, or 22%, compared with the same period last year.

Net income for the first six months of 2007 was $78.3 million, which
included a loss from discontinued operations of $.4 million, increased from the
$65.0 million earned in the same period of 2006, which included income from
discontinued operations of $.8 million. Diluted earnings per share in the first
six months of 2007 of $.96 increased $.16, or 20%, compared with the same period
of 2006.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2007, working capital was $97.8 million and our current ratio
was 1.3 to 1. Cash flows from operating activities increased $10.8 million, or
16%, to $79.6 million in the first six months of 2007 mainly due to the improved
operating results discussed above.

Cash flows provided from operations were more than adequate to fund capital
expenditures of $12.8 million and $9.7 million in the first six months of 2007
and 2006, respectively. Capital expenditures were generally for machinery and
equipment that improved productivity and tooling to support IDEX's global
sourcing initiatives, although a portion was for business system technology and
replacement of equipment and facilities. Management believes that IDEX has ample
capacity in its plants and equipment to meet expected needs for future growth in
the intermediate term.

The Company acquired Faure Herman in February 2007 for cash consideration
of $24.2 million and the assumption of approximately $1.6 million in debt and
Quadro Engineering in June 2007 for cash consideration of $32.1 million.
Approximately $12.9 million and $11.3 million, respectively, of the cash
payments for both acquisitions were partially financed by borrowings under the
Company's credit facility.

We believe the Company will generate sufficient cash flow from operations
for the next 12 months to meet its operating requirements, interest on all
borrowings, required debt repayments, any authorized share repurchases, planned
capital expenditures, and annual dividend payments to holders of common stock.
The Company is currently in the process of evaluating its options related to the
Senior Notes due February 15, 2008, including the potential use of its Credit
Facility. In the event that suitable businesses are available for acquisition
upon terms acceptable to the Board of Directors, we may obtain all or a portion
of the financing for the acquisitions through the incurrence of additional long-
term borrowings.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is subject to market risk associated with changes in interest
rates and foreign currency exchange rates. The Company's interest rate exposure
is primarily related to the $328.6 million of total debt outstanding at June 30,
2007. Approximately 54% of the debt is priced at interest rates that float with
the market. A 50-basis point movement in the interest rate on the floating rate
debt would result in an approximate $.9 million annualized increase or decrease
in interest expense and cash flows. The remaining debt is fixed rate debt. We
will, from time to time, enter into interest rate swaps on our debt when we
believe there is a financial advantage for doing so. A treasury risk management
policy, adopted by the Board of Directors, describes the procedures and controls
over derivative financial and commodity instruments, including interest rate
swaps. Under the policy, we do not use derivative financial or commodity
instruments for trading purposes, and the use of these instruments is subject to
strict approvals by senior officers. Typically, the use of derivative
instruments is limited to interest rate swaps on the Company's outstanding long-
term debt. As of June 12, 2007, the Company acquired certain forward contracts
as

part of the Quadro acquisition that are expected to lapse by December 31, 2007.
The impact of these contracts are immaterial to the Consolidated Statements of
Operations.

Our foreign currency exchange rate risk is limited principally to the euro
and British pound. We manage our foreign exchange risk principally through
invoicing our customers in the same currency as the source of our products. As a
result, the Company's exposure to any movement in foreign currency exchange
rates is immaterial to the Consolidated Statements of Operations.

ITEM 4. CONTROLS AND PROCEDURES.

The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Company's Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
is required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.

As required by SEC Rule 13a-15(b), the Company carried out an evaluation,
under the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and the Company's Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the period covered
by this report. Based on the foregoing, the Company's Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective.

There has been no change in the Company's internal controls over financial
reporting during the Company's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

IDEX and five of its subsidiaries have been named as defendants in a number
of lawsuits claiming various asbestos-related personal injuries, allegedly as a
result of exposure to products manufactured with components that contained
asbestos. Such components were acquired from third party suppliers, and were not
manufactured by any of the subsidiaries. To date, all of the Company's
settlements and legal costs, except for costs of coordination, administration,
insurance investigation and a portion of defense costs, have been covered in
full by insurance subject to applicable deductibles. However, the Company cannot
predict whether and to what extent insurance will be available to continue to
cover such settlements and legal costs, or how insurers may respond to claims
that are tendered to them.

Claims have been filed in Alabama, California, Connecticut, Delaware,
Florida, Georgia, Illinois, Louisiana, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma,
Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Virginia,
Washington and Wyoming. Most of the claims resolved to date have been dismissed
without payment. The balance have been settled for reasonable amounts. Only one
case has been tried, resulting in a verdict for the Company's business unit.

No provision has been made in the financial statements of the Company,
other than for insurance deductibles in the ordinary course, and IDEX does not
currently believe the asbestos-related claims will have a material adverse
effect on the Company's business, financial position, results of operations or
cash flow.

IDEX is also party to various other legal proceedings arising in the
ordinary course of business, none of which is expected to have a material
adverse effect on its business, financial condition, results of operations or
cash flow.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

TOTAL NUMBER OF MAXIMUM NUMBER
SHARES PURCHASED AS OF SHARES THAT MAY
PART OF PUBLICLY YET BE PURCHASED
TOTAL NUMBER OF AVERAGE PRICE ANNOUNCED PLANS UNDER THE PLANS
PERIOD SHARES PURCHASED PAID PER SHARE OR PROGRAMS(1) OR PROGRAMS(1)
------ ---------------- -------------- ------------------- ------------------

April 1, 2007 to April 30,
2007........................ -- -- -- 2,240,250
May 1, 2007 to May 31, 2007... -- -- -- 2,240,250
June 1, 2007 to June 30,
2007........................ -- -- -- 2,240,250

--------

(1) On October 20, 1998, IDEX's Board of Directors authorized the repurchase
of up to 2.25 million shares of its common stock, either at market prices
or on a negotiated basis as market conditions warrant.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Company held its Annual Shareholders' Meeting on Tuesday, April 3, 2007
and voted on two matters. The first matter was the election of two directors to
serve a three-year term on the Board of Directors of IDEX Corporation. The
following persons received a plurality of votes cast for Class III directors.

DIRECTOR FOR WITHHELD BROKER NON-VOTES
-------- ---------- -------- ----------------

Ruby R. Chandy............................. 51,768,016 189,857 0
Neil A. Springer........................... 51,548,370 409,503 0

Secondly, shareholders voted on a proposal to appoint Deloitte & Touche LLP
as auditors. The proposal received a majority of the votes cast as follows:

Affirmative votes............................................. 51,922,245
Negative votes................................................ 28,070
Abstentions................................................... 7,560
Broker non-votes.............................................. 0

ITEM 5. OTHER INFORMATION.

There has been no material change to the procedures by which security
holders may recommend nominees to the Company's board.

ITEM 6. EXHIBITS.

The exhibits listed in the accompanying "Exhibit Index" are filed as part
of this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

IDEX CORPORATION

/s/ DOMINIC A. ROMEO
----------------------------------------
Dominic A. Romeo
Vice President and Chief Financial
Officer
(duly authorized principal financial
officer)

August 6, 2007

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
------- -----------

3.1 Restated Certificate of Incorporation of IDEX Corporation (formerly
HI, Inc.) (incorporated by reference to Exhibit No. 3.1 to the
Registration Statement on Form S-1 of IDEX, et al., Registration No.
33-21205, as filed on April 21, 1988)
3.1(a) Amendment to Restated Certificate of Incorporation of IDEX
Corporation (formerly HI, Inc.), (incorporated by reference to
Exhibit No. 3.1(a) to the Quarterly Report of IDEX on Form 10-Q for
the quarter ended March 31, 1996, Commission File No. 1-10235)
3.1(b) Amendment to Restated Certificate of Incorporation of IDEX
Corporation (incorporated by reference to Exhibit No. 3.1 (b) to the
Current Report of IDEX on Form 8-K dated March 24, 2005, Commission
File No. 1-10235)
3.2 Amended and Restated By-Laws of IDEX Corporation (incorporated by
reference to Exhibit No. 3.2 to Post-Effective Amendment No. 2 to the
Registration Statement on Form S-1 of IDEX, et al., Registration No.
33-21205, as filed on July 17, 1989)
3.2(a) Amended and Restated Article III, Section 13 of the Amended and
Restated By-Laws of IDEX Corporation (incorporated by reference to
Exhibit No. 3.2(a) to Post-Effective Amendment No. 3 to the
Registration Statement on Form S-1 of IDEX, et al., Registration No.
33-21205, as filed on February 12, 1990)
4.1 Restated Certificate of Incorporation and By-Laws of IDEX Corporation
(filed as Exhibits No. 3.1 through 3.2 (a))
4.2 Indenture, dated as of February 23, 1998, between IDEX Corporation,
and Norwest Bank Minnesota, National Association, as Trustee,
relating to the 6 7/8% Senior Notes of IDEX Corporation due February
15, 2008 (incorporated by reference to Exhibit No. 4.1 to the Current
Report of IDEX on Form 8-K dated February 23, 1998, Commission File
No. 1-10235)
4.3 Specimen Senior Note of IDEX Corporation (incorporated by reference
to Exhibit No. 4.1 to the Current Report of IDEX on Form 8-K dated
February 23, 1998, Commission File No. 1-10235)
4.4 Specimen Certificate of Common Stock of IDEX Corporation
(incorporated by reference to Exhibit No. 4.3 to the Registration
Statement on Form S-2 of IDEX, et al., Registration No. 33-42208, as
filed on September 16, 1991)
4.5 Credit Agreement, dated as of December 21, 2006, among IDEX
Corporation, Bank of America N.A. as Agent and Issuing Bank, and the
Other Financial Institutions Party Hereto (incorporated by reference
to Exhibit No. 10.1 to the Current Report of IDEX on Form 8-K dated
December 22, 2006, Commission File No. 1-10235)
4.6 Credit Lyonnais Uncommitted Line of Credit, dated as of December 3,
2001 (incorporated by reference to Exhibit 4.6 to the Annual Report
of IDEX on Form 10-K for the year ended December 31, 2001, Commission
File No. 1-10235)
4.6(a) Amendment No. 7 dated as of December 12, 2006 to the Credit Lyonnais
Uncommitted Line of Credit Agreement dated December 3, 2001
(incorporated by reference to Exhibit No. 4.6(a) to the Annual Report
of IDEX on Form 10-K for the year ended December 31, 2006, Commission
File No. 1-10235)
*31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
or Rule 15d-14(a)
*31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)
or Rule 15d-14(a)
*32.1 Certification pursuant to Section 1350 of Chapter 63 of Title 18 of
the United States Code
*32.2 Certification pursuant to Section 1350 of Chapter 63 of Title 18 of
the United States Code

--------

* Filed herewith