藝達思 (IEX) 2012 Q1 法說會逐字稿

A good morning. My name is Sarah and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2012 earnings covered call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question and answer session.

(Operator Instructions)

Thank you. Mr. Michael Yates, Vice President of Corporate Accounting, you may begin your conference.

Thank you, Sarah. Good morning everyone, and thank you for joining us for our discussion of the IDEX first quarter 2012 financial highlights. Last night we issued a press release outlining our company's financial and operating performance for three-month period ending March 31, 2012. The press release, along with the presentations slides to be used during today's webcast, can be accessed on our Company's website at www.idexcorp.com. Joining me today from IDEX Management are Andy Silvernail, our Chairman and CEO; and Heath Mitts, Vice President and Chief Financial Officer.

The format for our call today is as follows. We will begin with a summary of the first quarter 2012 followed by a walk through of our three business segments. And finally we will wrap up with our outlook for 2012. Following our prepared remarks, we will then open the call for your questions. If you should need to exit the call for any reason you may access a complete replay beginning approximately 2 hours after the call concludes, by dialing the toll-free number 855-859-2056 and enter in conference ID 40915423. Or you simply may log on to our Company's Homepage for the webcast replay. As we begin, a brief reminder, this call may contain certain forward-looking statements that are subject to the Safe Harbor language in today's press release and in IDEX's filings with the Securities and Exchange Commission. With that, I will now turn this call over to our Chairman, Andy Silvernail. Andy?

Thanks Mike. Good morning everybody. I want to thank you for taking the time today to participate in the call. We appreciate the interest that you all have in IDEX. Let's get started.

As Mike mentioned, I'm going to talk to the quarter and segment results and share my perspective on where we see the markets going and how it's impacting our performance. Bottom line is we had a very strong start of the year. We've built significant backlog during the first quarter and our end markets and geographies are performing as we expected. These factors have positioned us very nicely for the remainder of the year, providing us confidence in our approved 2012 outlook. Additionally, the CVI Integration is on track. We've put a lot of focus on our Optics and Photonics platform and the Team has responded extremely well. While there have been some end-market headwinds, I'm pleased with the progress to date. I will go into more detail CVI Integration when I give an update on the segment later.

In the last two earnings calls, we've talked about our platform strategy. This strategy has continued to mature and gain traction, and I'm pleased with the execution and delivered results from our Team. With that I'm going to jump into Q1 financial performance. I'm on slide 5. For the quarter, orders are up 20%, 11% organically. Sales were up 15% and that's up 6% organically. And as you can see, we built $42 million of backlog in the quarter. I will detail this as we walk through the segments.

In the quarter, just over half our sales were generated outside the US. We saw a broad-based [stripe] in North America. Europe was generally flat but it was stable. The Middle East growth was driven by up-stream activity in our energy platform and increasing demand in our Fluid and Metering business. Our Asian markets growth remains strong, particularly outside of China. Altogether, the external environment is playing out as we expected.

Looking at profitability, first quarter adjusted operating margin of 18.3% was up 10 basis points from the comparable quarter last year. The improved profitability as a result of leverage on the organic growth and benefits of our previously taken restructuring actions. This is partially offset by the dilutive impact of the 2011 acquisitions. When excluding restructuring charges and acquisition impact, all three segments experienced year-over-year margin expansion. Q1 EPS, adjusted for restructuring charges, was $0.66 up 16% versus the first quarter of 2011. We incurred approximately $5 million of restructuring costs, as we continue to consolidate operations. Further restructuring actions will take place throughout the remainder of the year as we complete selected facility consolidations by year-end. It's important to note however, that organic growth is the best return on our investment. And we continue to invest aggressively in innovation and market expansion.

In Q1 we generated free cash of $52 million, up 161% for the first quarter of 2011. This is a quarterly record -- first quarterly record for IDEX. I'm very pleased with the execution and the focus on cash generation by all the operators in the field. Lastly, with regard to capital deployment, on April 10 we announced an 18% increase in our quarterly dividend. In the first quarter, we also repurchased approximately 239,000 shares of common stock for $10.2 million.

And as you may know, two weeks ago we announced the completed acquisition of Precision Photonics Corporation, which is effectively a product line extension for our IDEX Optics and Photonics platform. PPC provides growing -- provides a growing platform with specific technical capabilities that we can leverage across the business, including bonding and advanced metrology. More notably, we continue to progress in late stages of diligence on additional acquisition targets, and we have a full field pipeline. So, the bottom line is we had an outstanding quarter both operationally and in capital deployment. Now let's jump into the segment details.

I'm on page 6, everybody. In FMT, orders were up 5%, they're up 6% when you exclude FX. FMT's backlog grew $14 million and it was broad-based across the segment. Sales increased 7%, 8% organically. Adjusted operating margin of 22.2% was up 120 basis points from Q1 of 2011. The margin improvement is largely attributed to the benefits received from volume and from outstanding productivity. Within CFP we experienced continued strength in North America, Asia and Latin America. And, as we've highlighted before, our investments the BRIC and Middle East countries are definitely paying off. Versus last year, we've seen slower growth in Western Europe, but we maintained great market positions and we're prepared to handle anything that comes out of the European economy. Our energy platform performed well, with order strength driven from both downstream and upstream, domestically and internationally. And our Ag business has experienced tremendous order growth, which is largely driven by favorable growing conditions and new product introductions. Finally, within our water platform, the industrial side remains solid and the municipal side has stabilized. This was evidenced by sequential order growth, which is a positive signal for the platform.

Let's turn to page 7, and we will discuss Health and Science. Total orders for this segment were up 30% for the quarter, down 2% organically. Sales were up 35% in total, up 2% organically, while operating margin of 18.3% was down 450 basis points compared to prior-year. Again, that is driven by the dilutive impact of our 2011 acquisitions and the related acquisition intangible amortization. Importantly, within each of the HST businesses we experienced sequential orders and sales acceleration. Our Material Process platform, or MPT as we call it, plays largely in Pharma and Food and is performing well. The orders increased for the first quarter, as their end-markets remain strong and we achieved the global growth synergies we expected when we built this platform over the last 18 months. As expected, our scientific [effluent] platform was faced a very difficult Q1. In early 2011, we saw extremely strong order growth as customers brought a number of highly successful products to market. Further, the end-market dynamics are playing out as expected. As discussed in the past two quarterly calls, end-markets have slowed with global funding concerns and inventory reductions. Our view was, and continues to be, that Q1 and Q2 would be soft, with some rebound in the back half of the year. We remain very confident in the prospects of this business overall.

The returns for our Optics and Photonics platform are consistent with what we talked about last quarter. The scientific and industrial markets are reasonably robust, but we continue to feel pressure for semi-conductor and defense. Importantly, the trend seems to have stabilized year-over-year and sequentially. While we're on HST, I want to take a minute to give you an update on the Optics and Photonics Integration. At this point, we are halfway through our 18-month planned integration process for CVI Melles Griot. The integration remains the highest priority for the company. We knew going into the acquisition that there was heavy lifting to be done integrating the units and creating a single platform. At this time, I'm pleased to say that we have completed nearly all of the planned HR, finance, IT and compliance integration. And we remain on track to complete the remaining functional and platform level integrations in 2012. Further, we've completed one facility consolidation in Q1 and additional rationalization is in process. We have been appropriately aggressive with our productivity efforts, and have increased the focus as we have been challenged by the weaker then expected semiconductor and defense markets.

Organizationally, we made several changes to bolster the platform's capability. We're fortunate to have a level of depth of talent within IDEX to support acquisitions that accelerate improved performance. Within Optics and Photonics, we've upgraded talent in sales and marketing, product development, operations and finance. We're building a platform team that can win now and put us in position to continue to grow organically and through acquisitions. Along with strengthening the team, we're driving increased rigor around execution. We are deep into the process of deploying our commercial and operational excellence tools on the areas we know will accelerate profitable growth. As in any acquisition, we would begin the process by doing in-depth voice to customer research to understand critical priorities. We know from the research, that in Optics and Photonics, the customers have a strong affinity for our products and our technical problem solving ability. We have also heard that we can differentiate and create substantial value through best-in-class lead times and service.

Along with the commercial and operational excellence tools, we're benefiting from the combined technical prowess of the platform. For example, we've transferred our Semrock-developed optical monitoring system to select locations within the platform. The proprietary software and hardware packages already begun to deliver impressive results. These include lead-time reductions, higher yields, and much more consistent quality. Most importantly, we're harnessing the innovative technology and product development capabilities of the platform. We have outstanding technical talent and experience across the business, including from our new acquisition, Precision Photonics.

We've integrated our capabilities into what we call the office of the CTO. In 2012 this team is focused on three key optical technologies. One, high-speed pulse laser optics. Two, advanced [policing] in metrology. And three, optic fluidic engines. And optics fluidic engines is really a terrific example of where we get leverage across the broader portion of IDEX. This technology uniquely leverages IDEX's strengths by combining the best of micro fluidics, optics and photonics in a highly engineered compact solution that'll be used in the next-generation of biotech and in diagnostic systems. We've got another nine months of our original integration plan to go. In that time we will continue to build the team and leverage the growth and cost opportunities across the platform. There remains a lot of work to do, but we're making great progress.

So wrapping up HST, despite the orders in Q1, we still believe a full year organic growth will be in the mid-single digits for the segment. And our long-term prospects are very encouraging. Not only do we like the end-markets, we see product innovation delivering growth in excess of our served markets.

All right. Let's move in to our final segment. I'm on page 8. We are going to talk about Fire Safety and Diversified. Total orders in the quarter were up 41%. Organically, they're up 43%. Sales increased 5% and we were up 7% organically. As I highlighted in the earnings release, we received a large replenishment order in dispensing that will ship over the next several quarters. However, even without this order, the overall segment orders were up strong double-digit. I'm very pleased with the team's execution in the quarter, along with delivering on organic growth, profitability was impressive at an operating margin of 22.3%, up 190 basis points from prior-year. The margin expansion is largely attributed to structural costs actions taken, volume leverage and excellent productivity. Overall, end-market demand for this segment has been very good, particularly in the emerging markets for our rescue tools, which continues to be very robust. The municipal markets in the US and Western Europe have stabilized, and I'm pleased to say that our fire suppression business has been able to demonstrate solid growth. And this has offset headwinds in the US municipal fire market and they've done a very, very nice job in adjacent markets and geographies.

Our BAND-IT business, which is our clamping business, and it participates in very diverse end-markets, has proven its ability to grow at two times, or even more, in the general market through product innovation and continuous execution. This remained true in the first quarter and we expect BAND-IT to deliver these results throughout the year. In our dispensing business, which has always been lumpy due programmatic order activity, we received a nice replenishment order that will ship over the next several quarters. In addition, we have seen the global end-market stabilize for dispensing. As we discussed in the past, we have a lot of restructuring work in the business over the last two years. And our cost structure enables good margin expansion. The team is really done an outstanding job of delivering results.

We are going to close out the presentation with our guidance an our update on slide 9. We expect Q2 EPS to be in the range of $0.70 to $0.72. Q2 revenue will be mid-to-high single digits organically. FX will have a negative year-over-year impact on Q2 sales of approximately 2%. We've increased our guidance and solidified the lower end of our range. We now expect full-year 2012 EPS to be in the range of $2.80 to $2.85 with organic revenue in the mid-single digits. Full-year operating margin for the Company will be approximately 19% as a result of our 30% to 35% flow-through on incremental organic volume. Other modeling items to consider, which remain consistent with our prior guidance, the 2012 tax rate is anticipated to be about 30%, full-year CapEx to be around $40 million, and as we've always demonstrated we will continue to convert cash extremely well in excess of that income for the full year. Finally, our earnings projections exclude future restructuring, future acquisitions, or cost and charges associated with acquisitions.

All right, we are going to wrap things up here. Again, we've experienced broad-based growth, which provides a favorable outlook, and it is only limited softness that we see out there in the world today. I'm very pleased to see our outstanding global team deploying our platform strategy and executing very well. Our proven operating model is driving organic growth while expanding margins. Finally, we are well positioned to continue to intelligently deploy capital. Our balance sheet and cash generation are strong and our acquisition funnel is in very good shape. That concludes my prepared remarks on an excellent quarter and I will now turn it over to questions. Operator?

(Operator Instructions)

Jim Lucas with Janney Capital

Thanks. Good morning guys. Wanted to start first on HST. If we take a look at the continued softness and the orders there, with the different pieces of HST, what exactly is giving you a comfort in the second half picking up and not continued inventory corrections from your customers?

There are really two things and first you have to kind of segment it out a little bit, Jim, right? The first thing is, that if you look at MPT and Industrial, those are solid. They are okay. And it's the micro fluidics business that has been the gap that we've talked about and it's consistent with what we talked about. And there are two things that give us confidence in a back-half on a year-over-year basis being better than the first half. The first one is really the market's outlook. So what they are talking about, and we are very, very close to this customer base on a global basis. And it really is a global customer base. The second piece is that the comps, frankly, just become a lot easier, when you look at the second half. The comps in the first half of this year, we're going against very, very strong product releases that happened last year. And were really a bubble in that business. Those are really the two things that give me confidence, that we see a better year-over-year comparisons as we get into the second half.

In terms of the inventory corrections that you were saying from the customers in the fourth quarter, has that dissipated?

You know it's still there to some degree. There's some earning releases that have been coming out here -- here and there, and so we'll kind of see how that plays itself through. It still a factor, Jim, but I think it was a bigger factor in the last half of last year.

Okay. And then switching gears, on the FMT side where things continue to go fairly well, it looks like, and even the weaker area is stabilizing. You talked about Asia being stronger outside of China. Can you give an update of what you are seeing in your China market today?

Yes. No doubt. First, I think on the positive side -- very positive side -- India and Southeast Asia are really strong and we are seeing nice activity across the board, in day rates and in projects, so we're feeling pretty good there. I think we seen, like everybody else has seen, Jim, that the China market has slowed and we've got to be to be careful about saying softness, because softness when you're talking about China and softness talking about Western Europe and the US are two different things. It's still solid growth, but you remember, we were posting very, very strong year-over-year growth rates for a long time with markets that were double-digit and that's coming down some and we are slowing to some degree too, but it's still very attractive.

Okay. And then, final question. With regards to the M&A pipeline, can you talk about what you're seeing in terms of valuations as well as the size and scope of the deals that are in the pipeline today?

Yes. Jim, the most of the deals that are down in the pipeline are now -- are kind of our sweet spot stuff. You know, $25 million to $100 million fits exceptionally well into an existing platform. PPC is a great example, and that's a really small deal, but it solves a really pretty good-sized strategic need for us and it tucks right in there. So, we are seeing a lot of things like that, pretty balanced between HST and FMT generally, across-the-board. So we feel good about that. So in the sweet-spot and pretty balanced is generally what's in the pipeline. In terms of valuations, I would say that what we are looking at are pretty good. They are not nosebleeds like we saw at this time last year. At the same time, it's not bargain-basement. But I would say there are deals we feel very, very good about being able to get a really nice return on invested capital.

Great. Thank you very much.

Charley Brady with BMO Capital Markets

Good morning guys. Just back on HST for a second. If I missed it, I'm sorry, but what was the margin impact from acquisitions specific just to HST?

It was 450. Right Heath? It was 450.

Margin impact of acquisitions, that's what we get. HST was down 450 year-over-year, most of that was attributable to the acquisitions. There was also some mix impact where we had hire MPT sale -- material sales -- material process technology sales in the quarter versus some of the scientific fluidic business. So there is a margin differential between those two. But the acquisition impact was the lion share.

Can you quantify then what, I guess organically, margin would have been for HST?

You know it's almost impossible to do that now because the integrations, both on the MPT side as well as on the Optics side, have integrated in with the existing incumbent properties in those platforms. So it's almost impossible, because we've shifted costs around so much and as we built out those platforms it wouldn't be meaningful.

Okay. And can you quantify the size of that large Dispensing order and was it from a domestic customer or international?

It's a global customer. And we are not able to quantify it. But it's a global customer that we do business with.

I think I heard you correctly say that excluding that, FSD still would've had positive order growth in the quarter?

Absolutely. We had very good rescue tool performance, especially in the emerging markets in Southeast Asia and in the Middle East. The fire business -- the fire suppression business, actually where it's bumping along the bottom, and we've talked about several quarters, is beginning to see a little bit of upside. Not so much in big recovery in the US market, but some of their international opportunities. And then BAND-IT has been very strong and continues to grow double digits. So we would've definitely been into the double digits.

Where are you seeing the strength in fire suppression? That is surprising given the economic backdrop.

Well you've got a couple of things, Charley. This is Andy. The first one is, this whole municipal market took a heck of a hit, right, coming out of the recession. And unlike a lot of the rest of the world, didn't rebound, and so if you recall from our earlier calls over the last, really two years, this business hasn't seen the rebound that most of the other industries and segments have seen. And so we're coming off a pretty low bottom, number one. Number two, they've done a nice job in some adjacent markets and they've done a nice job internationally of penetrating some business that we hadn't had before. So, we're seeing some progress there. We have not seen, what I would call a rebound in the US fire truck market, which is the biggest segment of this business. So this is really about the team doing a very, very good job of executing, and what I would still say is muddling around the bottom. Now that being said, we think over time, as tax receipts improve, and that has started to happen, this is a business that will pick up some, with a much better cost structure, by the way.

Great. Thanks very much.

Scott Graham with Jefferies.

Hey, good morning. So I did have two questions for you. The first one related to really the optical platform itself. Would you be able to tell us what the year-over-year organic was of the optical platform, if you could kind of pro forma that somehow?

You know, that's not something we've typically done.

And -- I'm sorry. Scott, this is Heath. That would get into pre-ownership, from most of it, with the exception of Semrock which we owned from 2008 forward. To be honest with you, we're not trying to be evasive, but I couldn't even tell you what that is.

That'd be hard.

That's fair.

That would get into financials that were not ours.

So would you guys agree that the reason why we're kind of seeing weakness from the farm and drug areas, that it is kind of a year where the product cycle is not really working with us? And if so, the indications from your customers that the product cycle will work with us next year?

You know, Scott, that's a good insight. That's exactly right, on the first half of the question. If you went back this time last year, and even the previous 18 months to that, what you saw were some outstanding organic growth driven by strong product cycles. So, you hit that on the head. The product cycle now, I'd say generally is not as robust as it was. It's still pretty good though, so I wouldn't discount it all the way. These guys are very innovative, and the business has moved globally, aggressively over the last three to five years. And so I expect there to continue to be very strong innovation and very strong product development.

You know, these are not businesses that sit down for two or three years in a row from a product innovation. So our expectation is that pipeline is going to continue to be full, and that these businesses -- you just look at the external environment about -- I always kind of ask the question, do you think more is going to be tested next year than this year, in terms of the overall testing that happens in the world, that these analytical instruments are touching? And that answer is absolutely yes. These are very innovative growth companies that we think will drive growth over time.

Got it. And my follow-up question is simply, you know, for a long period of time now we've had a $20 million to $25 million cost reduction target from productivity in '12. I know you are lined up with that, Andy, but certainly you've come on board and been a little bit more aggressive with the cost structure. I'm wondering if that's a number that you agree with, if that's a number that maybe you think you should be doing better than? Because it really hasn't been updated in the last several years and the Company's bigger now, so I'm just wondering what your thoughts were on that level of -- on that target at least.

Yes, the $20 million to $25 million is a number we've talked about for three or four years, I want to say in there. And you're absolutely -- you're right, Scott. We have focused in the last two years even more on getting benefits -- cost benefits that we think are out there, and some low hanging fruit we didn't get at frankly, in the '08 to early '10 timeframe. There is more benefit to be gotten. The $20 million to $25 million is a good rule of thumb, frankly. We're internally reaching for more than that.

Thanks a lot for your time.

Matt Summerville with KeyBanc

Good morning. This is actually Joe Radigan on for Matt. In terms of the mid-to high single-digit organic growth guidance that you gave for the second quarter, is it safe to assume that HST is going to come in below that range? And followed by a stronger back half, just given on what you said?

Yes. Joe, that's right. I think that should definitely be the expectation. We think that HST, as we said before, will have a little bit softer a second quarter, then the other businesses. And we think that FSD and FMT will be a little bit better than that.

How much -- how much price is embedded in that 5% to 6% organic growth guidance for IDEX overall?

About 1 point.

Okay. On the restructuring side, can you give a little more color on either segment or geographic? Is that CVI related? Is it stuff that you had planned already or is it pull forward based on just trying to be proactive on your forward outlook?

First of all, it really has been pretty broad-based. If you recall last summer, when we -- actually we got into the fall and we were doing our third-quarter earnings release, we talked about, kind of taking advantage of some of the softness that was out there in the summer of last year, and accelerating these things. It's pretty broad across the company, and as we've talked about in the past, Joe, we have some more work to do on CVI, in terms of integration and facility consolidation, that we're going to get done by year end. And I think it's important to note, our goal is to have the vast, vast majority of this kind of stuff behind us, unless we have other acquisitions that will need some restructuring. But our intent is to shut that window at the end of this year.

Okay. And then, Andy, could you just clarify, I think you said was that -- when you were commenting on FMT, was the water-wastewater business, did you see sequential order growth in that business?

We actually did. And that connects back to the fire statement that we had a second ago, which says that if you look at the overall drivers in that industry, certainly in the Western world it's driven by tax receipts, and what we've said pretty consistently, is we didn't expect a rebound until you started seeing tax receipts go up. Tax receipts have increased modestly, I think that's the way to say it, modestly at the municipal level. There is some pent-up demand. But don't get me wrong, I don't see this thing taking off like a rocket ship in the near future. But it is a good sign.

Okay. Great. Thanks very much.

(Operator Instructions)

Nathan Jones with Stifel

Good morning guys. So just a little bit further on the CVI acquisition. With the 450 basis point dilution in margins from CVI, and correct me if my math is wrong here, I calculate CVI is doing about 5% EBIT margin and about 11% if you add back the intangibles. I'm sure this is lower than where you intended to run in the long-term. Can you talk about if there are still inventory step up charges or integration expenses or something else in there that is holding margins down? And kind of what your target is for that longer term?

Nathan, this is Heath. I think your math is directionally correct. There is a couple of factors at play. One, the biggest driver for not just CVI, but some of our broader optics, is a softness -- continued softness in the top line relative to softer semi-con and defense businesses that we do participate in. As you know, roughly a third of CVI does tackle into those markets. So that is the biggest driver, but from a profitability perspective, I think, like I said, your numbers are directionally correct. What I would say is, we would expect from a GAAP margin perspective, what we said was when we bought it we would have it up into the mid- to high-teens and that still is the case. Some of the restructuring actions, some of the new product development, as we build out the IOP platform, we feel confident about our ability to get there, kind of from an exit rate perspective for 2012.

And that mid- to high-teens is including the amortization?

That's correct.

Okay.

Some of that's going to be dependent upon a little bit of recovery and markets. But in terms of how we've laid things out now and how we have set up the cost structure and our modest growth improvement perspectives for 2012, we feel good about the exit rate.

Okay. And in FMT, can you flesh out the auto-growth kind of by end-market in a little more detail? Maybe which markets were stronger, which markets maybe not as strong as the average, for the segment?

Generally, the trends look like they've looked in the last couple quarters. Meaning, you are seeing really nice stuff out of Ag, which is very, very strong and has been strong here for a long time. And then chemical, food and process and in energy, all of them, they are solid, Nathan. There is nothing to complain about in any one of the three. And then the water business, while it certainly is trailing relative to the other three, has some positive signs that are encouraging.

And in Industrial?

Well, we don't break it out quite like that, we talk about it by the platform. If you kind of look at it by platform is how we think about it. Industrial -- to answer your question, the Industrial markets, generally, it's pretty good, it's pretty solid.

Okay. Thanks a lot.

John Moore with CL King.

Morning, guys. Just starting with Dispensing, the Dispensing order that you booked this quarter, has any of that begun to shift in the first quarter?

No, not yet, we'll see that flow over the next several quarters. I think, it's a well planned process, but nothing in the first quarter.

Okay. And then, if I remember, these replenishment orders, the margins on them tend to be pretty good. So, I'm just curious as to what your expectations are regarding the FSD margins throughout the back half of the year? I imagine the Dispensing business is going to be back up over a 20% operating margin level, with this order coming through. Is that right?

You're right. The larger orders, generally, have nice contribution margins. That's true. But also recognize that it is a relatively -- even within FSD, it's still not a giant chunk of the overall business. It's not like it's 50% or 60% of the business, but it will have a nice impact on that segment. But also recognize that the profitability is materially driven by rescue and BAND-IT, which have much higher margins. So, there is a long catch up before you get to those.

Got you. Okay. Just focusing on the guidance a second here, it looks like when you back-out this quarter, you raised your expectations for the rest of the year by maybe a penny or two. You've got this nice Dispensing order coming through that might provide some of that benefit. I just want to get a feel, have your expectations for the second half changed at all since you gave guidance in February? Or are you just -- don't want to, I guess, make a forecast here for the second half given what's going on globally and in Europe?

What we did here, John, is we took the bottom range up by $0.06, right?

Yes

So, we took the bottom of the range up by $0.06 and we took the top of the range up by about $0.03. What that comes down to is, given kind of how the first quarter played out, given what backlog looks like, order trends look like, we feel real confident at the low end of that range. At the same time, once you start getting to the high end of that range, there are still a lot of things that can go wrong out there in the world. So, we're trying to be cognizant of that, and make sure that we're being -- we think about this business appropriately. We're one quarter into a four quarter game, and we think there is a long way to go this year. There are some pitfalls out there. We feel very good. We're happy with how the quarter turned out, the Team's doing great, but at the same time, we want to make sure that we are being prudent.

Fair enough. And last question, on the guidance here, it looks like the impact from acquisitions for 2012 is now at 3%, I think you guided 5% when you initially gave the 2012 guidance. Has anything changed regarding your expectations to acquisition contributions this year?

No, not materially, no.

Okay, That's all I have, I'll get back in the queue. Thank you.

At this time there are no further questions. Presenters, do you have any closing remarks?

First of all, just again, thank you for everybody, for your attention to IDEX and your support. Bottom-line, we had a really good start to the year, and we are happy about that. The platform strategy that we put in place, and the focus on execution, I am very pleased with it. Our teams out in the field have just done an outstanding job, and we are exceptionally proud of them. We've got some integration work to do, and we're tackling that head-on. So, we're very happy. And again, thank-you very much, all of you, for taking the time this morning. Take care.

This concludes today's conference call. You may now disconnect.