Greetings. And welcome to the IDEX Corporation Third Quarter 2021 Earnings Conference Call. At this time all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Allison Lausas, Vice President and Chief Accounting Officer. Thank you. You may begin.

Good morning, everyone. This is Allison Lausas, Vice President and Chief Accounting Officer for IDEX Corporation. Let me start by saying thank you for joining us for our discussion of the IDEX third quarter 2021 financial highlights. Last night, we issued a press release outlining our company's financial and operating performance for the 3 months ending September 30, 2021. The press release, along with the presentation slides to be used during today's webcast can be accessed on our company website at idexcorp.com. Joining me today is Eric Ashleman, our Chief Executive Officer; and Bill Grogan, our Chief Financial Officer -- The format for today's call is as follows. We will begin with Eric providing an overview of the state of IDEX's business and an overview of our end market performance. Bill will then discuss our third quarter 2021 financial results and provide an update on our outlook for the fourth quarter and full year 2021. Finally, Eric will conclude with an update on the IDEX Difference. Following our prepared remarks, we will open the call for your questions. If you should need to exit the call for any reason, you may access a complete replay beginning approximately 2 hours after the call concludes by dialing the toll-free number (877) 660-6853 and entering conference ID 13712091, or simply log on to our company homepage for the webcast replay. Before we begin, a brief reminder. This call may contain certain forward-looking statements that are subject to the safe harbor language in last night's press release and in IDEX's filings with the Securities and Exchange Commission. With that, I'll now turn this call over to our CEO, Eric Ashleman.

Thank you, Allison. Welcome to IDEX. It's a pleasure to have you on the team. I'd like to start by thanking Mike Yates, our former Chief Accounting Officer, for his 16 years of service to IDEX. Mike help lead an evolution of our finance and accounting organization and his work has had a long lasting impact on the business. On behalf of the entire IDEX team, I wish Mike the best in his future endeavors. Now let's turn to our IDEX overview on slide six. We continue to see supply chain challenges throughout the third quarter. Our localized sourcing, production and selling model helps us a bit relative to others, but this prolonged environment of poor material, labor and logistics availability challenges us just like any other business. Despite these obstacles, our IDEX teams around the globe have risen to the occasion. They exhibited both resiliency and stamina as they overcame yet another quarter filled with day-to-day disruptions, all while providing a high level of support to our customers. I want to thank all the IDEX team members across the globe for your hard work, not just in Q3 but over the last 18 months of business within a pandemic. At this stage, we don't see any near-term signs of diminishing macroeconomic headwinds. Rather, we expect they'll remain at a high level and persist into 2022. We'll continue to leverage our 80/20 principles as we align around our best customers, our best prospects for growth and our critical business priorities. I spoke last quarter about our ability to capture price due to the differentiated mission-critical nature of our products. Overall, the price actions that we took over the past six months were increasingly realized in the third quarter, and we saw our price, cost spread increase sequentially. We will push…

Thanks, Eric. I'll start with our consolidated financial results on slide nine. Q3 orders of $774 million were up 36% overall and up 28% organically. We built $62 million of backlog in the quarter, and all three segments had strong organic performance versus last year as well as versus the third quarter of 2019. Third quarter sales of $712 million were up 23% overall and up 15% organically. We continue to experience a strong rebound from the pandemic across our portfolio, tempered by supply chain constraints. The Flow MD pressure and Fluid & Metering Eric discussed, also had an impact on overall organic sales. Excluding Flow MD, organic sales would have been up 18% overall. Q3 gross margin expanded 50 basis points to 43.8%. The increase over the prior year quarter was primarily driven by increased volume and price capture, partly offset by inflation and supply chain impacts. Excluding the impact of a $9.1 million pretax fair value inventory step-up charge related to the Airtech acquisition, adjusted gross margin was 45%, and improved sequentially. Third quarter operating margin was 22.6%, flat compared to prior year. Adjusted operating margin was 24.3%, up 120 basis points compared to prior year, largely driven by our gross margin expansion and fixed cost leverage, offset with some pressure from targeted reinvestments and the dilutive impact of Airtech and ABEL acquisitions due to their intangible amortization costs. I will discuss the drivers of operating income in more detail on the next slide. Our Q3 effective tax rate was 23.4%, which was higher than the prior year ETR of 14.4% due to the finalization of tax regulations enacted in the third quarter of 2020 as well as a decrease in the excess tax benefit related to share-based compensation in the current period. Third quarter net income was…

Thanks, Bill. I'm on the final slide, slide 12. Before we open the call up to questions, I'd like to share a few updates around our great teams. First off, I'd like to extend my public congratulations to our Non-Executive Chairman, Bill Cook, on being named Public Company Director of the Year by the National Association of Corporate Directors. Bill and I both joined IDEX around the same time in 2008, and I've learned a great deal from him over the years. His insightful perspective and critical thinking skills have been tremendously helpful for the company, and I know I speak for everyone at IDEX when I say congratulations, Bill, on this well deserved honor. Turning to the IDEX Foundation. Last month, the foundation entered a national partnership with the Boys & Girls Clubs of America. Various US-based business units have supported their local boys and girls clubs over the years, but this takes our joint work to the next level, offering a clear pathway for increased engagement. Every one of our U.S. business units is close to at least one boys and girls club location. This agreement aligns with the foundation's equity and opportunity charitable pillar added earlier this year, seeking to create opportunities for underserved disadvantaged people of color within our community. Finally, we attribute much of our success to our strong foundational culture. Our annual September engagement survey just came back. And even within this incredibly challenging environment, loaded with disruptions in unexpected turns, we held study and were scored in the top quartile of all manufacturing companies. Our teams around the world are beginning to develop tactical plans to address feedback provided by their local teams, part of the continuous improvement that supports everything we do at IDEX. With that, let me pause and turn it over to the operator for your questions.

Thank you. [Operator Instructions] Our first question comes from the line of Nathan Jones with Stifel. Please proceed with your question.

I think we lost Nathan.

Can you hear me?

Now we can.

Now we can.

Okay. All's Well That Ends Well. First question just on this discretionary reinvestment it wasn't called out on the walk in the first quarter, ramped up in second quarter and third quarter. And I think Bill said in his comments that you didn't actually spend as much in the third quarter as you intended. I think that margin guidance for the fourth quarter is down a little bit. Is that all just coming from the extra discretionary reinvestment in growth that you guys are looking at in the fourth quarter?

Yeah, I know exactly. I think the teams have done a good job managing and focusing on the critical things that we need to invest within the business. In the third quarter relative to - obviously, there's high demand for labor across a bunch of businesses, a bunch of different geographies and some head count and other items that we thought we would have landed in the third quarter just got pushed to the fourth quarter. So that will come back and put a little bit of mitigation on our overall flow-through, but still relatively strong.

Okay. And then one of the things I got from your press release was a quote where you said macro constraints that inhibit customer satisfaction. I assume that means that all of these constraints are leading to lower on-time delivery metrics for you guys. Can you talk about how much that slipped, if there's any anticipation, you'll be able to get them back up quickly, and if that impacts your ability to push pricing at all?

Sure. Well, it's less a function, Nathan, of on-time delivery and actually a function of extending lead times and then hitting those commitments. So I mean, we've maintained a high say-do ratio relative to our customers. We use the 80/20 lens to provide differentiated services for different levels of customers, so all of that remains constant. But in this environment, the part that I think we're all struggling with is just inherently the lead times in the queue is lengthening. So it's really that - your question around when does it resolve. I think, as we indicated, it's further out on the horizon, quite honestly. I mean a bunch of the knobs have to turn together, material availability, labor availability across the spectrum and logistics. So as those start to move and start to move in, and all of us can depend on higher levels of throughput, we would be able to bring lead times back in. And ultimately, against all of that, still maintain that high [indiscernible] ratio. So it's, again, less on OTD rates and more on just lengthening lead times against expectations.

And does it impact your ability to push price at all? Or are customers just conditioned at this point that lead times are extending, and they just have to deal with it?

Yeah. It really hasn't interfered. I mean, one of the things we're always tracking is lead times relative to our typical traditional performance as well as then competitively. And because our model has generally been advantaged this way it remains so on a relative basis. So as long as that holds, that generally keeps all of the arguments and the equations where we like them.

Great. Thanks for taking my questions. I'll pass it on.

Thanks, Nat.

Our next question comes from the line of Deane Dray with RBC Capital Markets. Please proceed with your question.

Thank you. Good morning, everyone.

Morning, Deane.

First, welcome to Allison. Best of luck. Secondly, great to see you guys moving to cash EPS, it makes all kinds of sense for you, put you on that level-playing field with your growth by acquisition peers. So a great move no surprise there. So thank you. The question - so let's just roll the clock back to last quarter, and I think you guys are one of the few that thought that the whole supply chain inflation had plateaued, but it really has not. Maybe if you could just - you've kind of given the description that we've heard from everyone about inflation, supply chain, labor, et cetera. But where are you feeling the greatest pain? And is there - just to clarify on Nate's question, are there any -- have you missed out on revenues? And can you quantify that?

Okay. So look, I mean supply chain has been a tough story for at least 6 months, and continue here into the fourth quarter. We did say at it plateaued, we said that relative to a pretty tough situation. So tough in the second quarter, tough in the third and continued tough in the fourth with, frankly, some year end dynamics that always make that quarter a little bit tougher. And so we're thinking of those as we project forward. Your question around what are we experiencing? Well, I mean there's a lot of variety in IDEX. But one thing that makes us all about the same is we tend to buy a lot of configured materials. We're not overly vertically integrated, so material availability is the #1 challenge. . And then it does vary. We've got some businesses - a few that are more semiconductor and ship-intensive. And then as you suspect, those tend to be the items for those businesses. Others, it's things like motors and castings. And typically, if they're coming from further away, that's a harder challenge. Labor availability for us, we don't have labor as a high percentage of our sales, but we do have pockets and it tracks pretty uniformly where labor is scarce either in the US or in other geographies. And I'd say as an overlay, I'd probably say all of IDEX to some degree, is continuing to try to track down scarce logistics resources, especially on smaller shipments or things that are going overseas. So I know that pretty much covers the spectrum of all possibilities. But if you want to just put a bow around it for us, it's material availability coming in through a supply chain of configured materials.

And then, Deane, maybe to your lost revenue comment, I think holistically, no. Obviously, we've got critical products across the portfolio that are spec-ed in, and high demand. This isn't a commodity application where folks can get it a week faster for dollar cheaper, they're going to go with that product. So relative to loss revenue or our ability to capture price the differentiation we have with our technology continues to support our incremental price increases across the different businesses.

All right. That's all really helpful. And just last one for me. You commented on record backlog, is there - and extended lead times, is there any chance that you'll need to go back and reprice any of that backlog? Just older it is, the more that material cost inflation weighs on it and so forth. What's your flexibility there?

Yeah, where we have the ability to do that, we're not contractually constrained. We have done that as we progress through the year.

Yes.

Great. Thanks for all the help.

Thanks, Deane.

Our next question comes from the line of Mike Halloran with Robert W. Baird. Please proceed with your question.

Good morning, everyone. So a couple of questions here. First, a lot of moving pieces in the environment as we sit here today. Certainly appreciate the color that you gave us, I guess, in this case, literally the green and red colors you gave us, and the various end markets and how those were performing. Maybe you can just start triangulating some thoughts on how you're thinking about those markets as we move into next year and maybe even through the next couple of years. Your concern level with all of the supply chain challenges, degrading demand, having some sort of circular challenge versus how you think about sustainability of the recovery curve as we sit here today and just how you balance all those moving pieces out internally?

Sure. So there is a couple of things there. Yeah, relative to kind of the green and red chart that we provide folks. It hasn't changed a lot over the last couple of quarters in terms of the few areas that are lagging. So I'll just - I'll sort of leave those as those stories continue in energy and chemical, and we can go into those later if we like. But I'd say a few things that are new here would be - the automotive side did flip over to red for us. There's just no question but more disruption, more shutdowns even on the higher end stuff where our products tend to have good presence. . Again, a small piece of IDEX, but it is something that's changed and changed a little different. I think if you kind of come up to a segment level, I mean, as you can see from our prepared remarks, and just in our numbers, I mean, the Health Science Technology segment is doing really, really well, very, very strong got semiconductor. That's where our exposure is. That's a strong market. Anything in analytical instrumentation, life science, the food areas. We've got some pharma in there as well. Those are just kind of universally strong and we would expect those to continue strong going forward. I think we talk a lot, of course, and we turn over to FMT and our project business and the nature of those. And we have seen some movement there. This has been a slow march of progress through the year. But I would say in the areas of food and pharma, in particular, you are starting to see a shift towards some intentional capacity expansion, which lends itself into discussions with folks like us and others around project…

Appreciate that. And then just usual kind of update, M&A outlook, how you think about funnel actionability? Any color around that?

Yeah. No. I mean very good. As we've talked about through most of the year here, we were intentional of putting some more resources on this job. We're looking at more projects, more interesting ideas out there traveling around. We're kicking the tires on a lot of things and have a strong funnel in a variety of areas, both things that apply to IDEX businesses and are in close universes as well as kind of an open line of things that are interesting and IDEX like that we might consider over time. So both in good shape, and we're excited about prospects there as we go forward. .

Thanks, everyone. Appreciate it.

Thanks, Mike.

Our next question comes from the line of Matt Summerville with D.A. Davidson. Please proceed with your question.

Thanks. Just with respect to the change in reporting as it relates to acquired intangibles amortization, what is that number build for IDEX expected to be in '21? And if you have something you can give us for '22, that might be helpful. And then I have a follow-up.

Yes. Matt, we'll give guidance on what that number was for '21, and our go-forward guide once we come out with our numbers in late January.

Okay. And then with respect to Flow MD, the volatility you've seen in that business, Eric, seems a bit outside of what I tend to call on IDEX-like business. I was wondering if you could just give a little more thoughts on how we should be thinking about that going forward.

Sure. Sure. Well, it has some attributes. I mean it's very IDEX-like in terms of the problems it solves, and sort of position on the bill of materials for the fossil fuels infrastructure in the country. So that is typical. But you're right, relative to the average IDEX business, the unit of measure of the sale price of the product is a lot larger. This is -- these are pretty large units. In fact, the nature of projects in terms of how those orders come to us are larger as well. It tends to be very much a capital-intensive kind of way of doing business. And so this is a business that, remember, if we just back up over the last year when we acquired it, had really, really high levels of backlog because they captured a lot of projects long ago prior to the acquisition. Then, of course, things change pretty dramatically in terms of how the major folks that are in charge of the pipelines in the U.S. We're talking about capital spend. We burned off that backlog and now find ourselves kind of in a steady state against replenishments and maintenance projects. We do a few things internationally. But the core of this business is still ultimately around the build-out or refurbishment around pipeline infrastructure in the US. It comes in larger project increments, and the sale price of the end product is larger. So the - for all of those reasons, the magnitude year-over-year is a larger swing than you would typically see in IDEX. That's why we've been careful to call it out and make sure people understand it within the FMT results.

Got it. And then just one final one. Just in terms of pricing, you typically get somewhere in the range of 100, maybe 150 basis points in a good year. And I'm curious as to where your realization is on a year-over-year basis at the present time? And how much of that should be viewed as more -- as permanent in nature versus maybe some of that's more surcharge like? So any color you could provide there would be helpful.

Yes. No. So we're in excess of 200 basis points this year. It will be a record year for price capture for the organization. Majority of it is permanent price increases. Obviously, we looked at surcharges on the freight side as that's been much more variable to offset that. But most of it will continue into our base level pricing for 2022.

Great. Thank you, guys.

Thank you.

[Operator Instructions] Our next question comes from the line of Allison Poliniak with Wells Fargo. Please proceed with your question.

Hi, good morning. And welcome, Allison. Eric, I want to go back to your comments and just kind of beat this up a little bit more. Supply chains tempering a little bit of the growth. I guess, one, is there a way to quantify sort of what that impact was in the quarter in terms of maybe lost one or two points of organic. Then I guess - and then along with that, Bill, you talked about working capital, some increases there, and I suspect part of that is a supply chain issue. Is there an opportunity here for you guys to attack, and maybe more fully in the first part of next year, some of those lead times and start to bring them in a little bit? Just any color there?

Sure, Allison. In terms of output, we could have realized with a slightly more favorable backdrop in the supply chain, probably in the range of a couple of percentage points of the organic rates that we posted. Just simply had the order, could have made it and can point to something that prevented it in one of those 3 categories that I talked to. I'll let Bill talk about the inventory. I will say we, like many businesses, on critical material if we can get it even if it doesn't make up perfectly with some other things, we're going to -- we'll take the spot and take the material. So there's a little bit of investment in working capital there. I think the last part of your question around, can we attack it? I think like a lot of other businesses, we're scrambling to lift our capacity and help our supply chain in any way we can on all dimensions. So some businesses are attacking the labor scarcity issue in very unique ways and very innovative, quite honestly. Others and most of it comes down to, in some places, capital spend. We're doing some things and thinking through capital that we know we have to put into the business so we kind of watch that ramp throughout the year. And that makes sense, and wherever possible. IDEX is not an easy business to automate, but we're doing it more than we have been before because it also helps solve the labor issue. Sometimes this comes down to design, which is something that people don't think a lot about. Sometimes you can actually alter designs, whether it's in simple circuitry or even some of the other parts that we have, and assist with fabrication. This is where our local proximity really helps us. So we can get in a car and drive over to a supplier and kind of have a collaborative discussion of, is there a different way to solve this problem and bring material in. So it's pretty much every day, if you went to one of our daily management sessions, you'd probably see that 70% of the discussion is around solving problems of this nature, both in the short term, and then wherever possible, and longer term in terms of investments or problem-solving.

Yes. And I think there will be opportunities on the working capital side once things normalize, but time will tell when that is. We're assuming back half of next year, but we'll see.

Got it. And then just in terms of HST, strong quarter there. And you had mentioned, obviously, investments have been starting -- certainly contribute to core. Is there a way to quantify sort of what that contribution to core was this quarter as well as any comments on sort of the mix impact that some of those investments are having in terms of those products being delivered today?

No. I'd say when you look across the portfolio, there's been robust margin expansion in almost -- well I shouldn't say almost, in every single reporting unit. Since we have -- we highlighted a couple, but there's been targeted investments in all entities within the HST segment that have -- you just look at the overall margin expansion that we've experienced there as we realize some of the incremental revenue associated with it. And because of the differentiated nature of that technology, the high margin associated with it. We did some folks highlight. Sequentially, the margin was down in HST, but that's really due to Airtech coming into the portfolio. On a like-for-like basis, margins are still at kind of those all-time highs we saw in the second quarter, and look for that in the core to continue here as we go forward.

Got it. Thank you.

Thank you.

Our next question comes from the line of Joe Giordano with Cowen and Company. Please proceed with your question.

Hey, good morning. This is Robert in for Joe. Yeah, I just wanted to touch on orders again. Do you have any sense of how much your customers are trying to like build their inventory. And I guess also like how much of the order activity feels consistent with like actual demand trends.

Yeah. No, it's a good question. I mean, so a couple of things. One is when we think about the nature of most IDEX products, it's highly configured, some ways customized for each application. And so typically, it's not a great product to over order lots up because you're never quite sure of how it's going to run out when the customer system. I would say what is a little different as we go through the year here in terms of typical patterns, it's just lengthening of sort of order horizon. So if somebody would have before given us, let's say, six months' worth of requirements, they might throw another quarter in there, recognizing, hey, this is a standard product. We know we're going to use it in this particular case, and we don't want to lose a place in line. That tracks actually with our own lead times as we extended those lead times, most equations would work and say then that's how you would change your order patterns to accommodate it. So I really - we've never seen a tremendous run-up of inventory IDEX material. Our distributors and channel within FMT doesn't really work that way. Most people still, as they think of planning for IDEX products, think of us as generally on the very agile, reactive end of the spectrum, and they haven't really changed their thinking around it as the entire world kind of goes through a relative change in shift outward.

That's helpful. Thank you for that. And then I guess I have a quick one also, just a follow-up on the M&A pipeline. It sounds like you said is very healthy, and integration of Airtech, which is one of your largest acquisitions to date, is going well. And with all the focus that you have internally on those initiatives going forward. This might be a break from previous acquisition behavior, but would you all be considering anything more transformational in nature, like a really big acquisition that might be like a new segment or something like that?

Well, I mean, I'd say 2 things there. One, we always consider kind of every chapter within possibilities, things that are very small, like little pieces of technology we want to tuck-ins, things like in Airtech or, frankly, ABEL pumps, which are more typical of IDEX transactions in the past. And then we do consider from time-to-time things at the other end of the spectrum that are larger. I think you always want to exercise that muscle, but we're always careful to say, for something in that category, it would have to have very IDEX-like characteristics to mitigate risk. And there's just not a giant universe of things that are in that particular bucket. And if there were, actionability is always somewhat of a question. And so we do consider it from time to time, we don't turn that switch off, but we recognize the probability is generally lower for the reasons that I suggested there. Just thinking about how it would mix and complement IDEX and where it would attach given the large size that you're describing. But every one of those chapters is something that we kind of walk it down as a book in our own follow-up calls.

That’s great. Thank you very much.

Thank you.

There are no further questions in the queue at this time. I'd like to hand the call back over to - no, we do have another question from the line of Rob Wertheimer with Melius Research. Please proceed with your question.

Hi, everybody. Just a little bit curious if you can give more background around the targeted spending. You mentioned Fire & Safety, cost pressure mitigation and/or whatever. And then you've been talking about the discretionary investments for a couple of quarters. I know last year, there's obviously some discretionary cuts. But just generally speaking, are you seeing more opportunity? Are you trying to change anything in the way you attack opportunities with the investments? Thanks.

Sure. I mean, generally, when we talk about growth investments in IDEX, they often walk on 2 legs. I mean they're people that we're going to bring into the business with specific skills for the charter to go focus in front-end areas, usually on the commercial side or strategic or thinking around putting the balance sheet to work. So there are other things that we'll do, sometimes third-party services, a couple of things in terms of nurturing and shaping technology, but a lot of times, it comes down to people-based investments. And just amping up the ability to go out and study things, spend time in the field, get the inputs that we need to then begin to modulate the technologies that we have in-house or the others we might bring in.

Okay. Perfect. That's a helpful response. And then just in Fire & Safety. And then just a path to -- I don't know, the path and mechanism on recapturing some of the cost pressures there. And I will stop. Thank you.

Yeah. I mean it's just a little off the IDEX typical. We do, as we mentioned, have a little bit more OEM concentration there. this is where some of the larger project work tends to be as well. You put the two things together, and you're not as able as we are in FMT and other places to just sort of go out and make those discrete changes quickly. So it doesn't mean we don't get that capture. The margin performance over time would absolutely verify that we do. It's just -- it does tend to lag a little bit from the rest of the more typical IDEX location. So - but the arguments, the pricing argument around criticality of solution and leveraging our position, our number one share position within those niches and our long relationship with customers, that's basically the same equation. It's just you have to be a little bit more cognizant of the timing and the duration of projects and things that are just a little different there. So we wouldn't see this as something that's going to dramatically alter the margin performance of that company over time or those businesses, but it will take us a little longer to catch up here.

Okay. Thank you.

Our next question comes from the line of Vlad Bystricky with Citigroup. Please proceed with your question.

Good morning, team. Thanks for taking the call.

Morning.

So just wanted to follow up on some of the reinvestment that you're doing, and particularly given supply chain and logistics issues you see out there now. Has your thinking about where you're targeting investment dollars evolved or changed over the course of the year as you've seen the supply chain and inflationary pressures continue to increase and not really get any better?

Yeah. I mean that's a great question. And the short answer is no. When you think about -- when you consider the cycles of our business, one of the things that's really, really important is that even as near-term things like supply chain challenges, all the stuff we talked about, disrupt the day-to-day, and maybe that even continues for a series of quarters, the best that you're going to make, you got to consider as you're making them today to sometimes flares 2, 3, 5 years in the future. And I was reflecting when we talked about all the positive aspects that are happening in HST, many of which were coming out of specific facilities that we bought for specific reasons to get it in different markets, actually went back and checked the dates. Those were commissioned in 2016, '17 and '18, basically, and they're now at full fruition here, and we're very glad we made those bets. So we just have to be very aware of sort of longer-term trends, longer-term positioning and make sure that we're both doing two things simultaneously. One, reacting appropriately to the disruptions in front of us, but also projecting and extending ourselves into '23, '24, '25 and making sure that those bets and those first discussions around growth are actually happening now.

Okay. That's really helpful. Thanks. And then maybe just shifting gears a bit. I know Asia is a smaller piece of the mix for you versus the U.S. and Europe. But can you talk about what you saw in terms of growth trends in the region over the course of 3Q and into 4Q, given the evolving COVID situation and policy responses in countries like China and Malaysia?

Yeah. And I preface both. I mean most of our areas where we play. We've got a campus in India, a campus in China, and then we've got some commercial things across broader Southeast Asia. And I would say, in general, those have performed very well for us, the last few years. They have performed well in 2021. I remind everybody it is a smaller portion of IDEX, and we attack it in a really surgical way. So we're picking specific niches, specific applications and then mating up technologies that we have available in IDEX to go after those. That -- I mean we're picking them because we think in many times, they're somewhat immune to some of the ebbs and flows that you would see more day-to-day or quarter-to-quarter because they've got growth dynamics at their back. So we're doing things in air ventilators and things for high altitude, or paint dispensing is a great market across all of that region for that specific reason. Now specifically, I would say we -- as a backdrop, I don't think we're seeing things that are different than others have talked about in terms of more moderate growth rates in China. And in a couple of instances, I'll talk to China specifically, we have some headwinds where there's -- and we mentioned this, there's a build for China belief out there around certain markets and things that they are very interested in investing in -- and that provides headwinds for us, but I would say that's where innovation kicks in. What we're able to offer is quite different than the local option. -- just means the sales cycle has extended a little longer, a little harder, but ultimately, we think our differentiation wins there. It's been a great performing region for us.

Okay. That’s very helpful. Thanks.

Thanks.

There are no further questions in the queue at this time. I'd like to hand the call back to management for closing remarks.

Okay. Well, thank you. Again, I'd like to welcome Allison to our team and our session here and thank everybody for your interest and your time today to hear what's going on at IDEX. As we said, it's a really interesting time, a lot of challenges out there. My closing comments would be for those IDEX associates that are on this call. Again, I really want to thank you. I know how hard this is in terms of the day-to-day challenges you have. I know you're doing the right things for the customers, for the business and for your colleagues and frankly, your communities as well. So thanks to everybody. And I wish you all safety and prosperity in the days and weeks ahead.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.+