SPX Technologies, Inc. (NYSE:SPXC) (“SPX”, the “Company”, “we” or
“our”) today reported results for the first quarter ended April 1,
2023.
Gene Lowe, President and CEO, remarked, “I am very pleased with
our first quarter performance, which included substantial
year-over-year organic growth* in both our HVAC and Detection &
Measurement segments. During the quarter we continued to benefit
from strong operational momentum in our HVAC segment which achieved
its strongest first quarter performance on record.”
Mr. Lowe continued, “Recently we have made notable progress on
our inorganic growth initiative, with the acquisition of TAMCO,
which expands our position in the attractive Engineered Air
Movement market. We also announced an agreement to acquire ASPEQ
Heating Group, which, once closed, will significantly expand our
portfolio of high-value electrical heating products. I am very
excited about these acquisitions, which position us to benefit from
favorable growth trends and further enhance our ability to meet our
customers’ growing needs for eco-friendly solutions that reduce
energy usage and carbon emissions.”
Mr. Lowe further commented, “Based on strong first quarter
performance, continued robust demand, and the acquisition of TAMCO,
we are increasing our guidance for full-year 2023 Adjusted EPS* to
a range of $3.80 to $3.95, a year-on-year increase of 25% at the
midpoint. With a strong, experienced team, and solid operational
momentum, we are firmly on track to achieve our ‘SPX 2025’ targets,
and continue driving value for our shareholders.”
First Quarter 2023 Overview:
For the first quarter of 2023, the company
reported revenue of $399.8 million and operating income of $49.8
million, compared with revenue of $307.1 million and operating
income of $11.4 million in the first quarter of 2022. Diluted
income per share from continuing operations in the first quarter of
2023 was $0.84, compared with $0.28 in the first quarter of 2022.
The increase in revenue, operating income and diluted income per
share from continuing operations were due primarily to higher
revenue in both our HVAC and Detection & Measurement
segments.
Adjusted operating income* was $58.3 million, compared with
$25.1 million in the first quarter of 2022. Adjusted earnings per
share* in the first quarter of 2023 was $0.93, compared with $0.40
in the first quarter of 2022. Adjusted operating income* and
Adjusted earnings per share* exclude amortization expense and
acquisition-related costs, among other items.
First Quarter Financial Comparisons:
($
millions) |
Q1 2023 |
|
Q1 2022 |
Revenue |
$ |
399.8 |
|
|
$ |
307.1 |
|
Consolidated operating
income |
|
49.8 |
|
|
|
11.4 |
|
Income from continuing operations |
|
39.1 |
|
|
|
13.0 |
|
Consolidated segment income* |
|
74.4 |
|
|
39.6 |
|
Adjusted operating income* |
|
58.3 |
|
|
25.1 |
|
* Non-GAAP financial measure. See attached schedules for
reconciliation of each historical non-GAAP measure to the
respective most comparable GAAP financial measure.
HVAC Segment
Revenue for the first quarter of 2023 was $251.6
million, compared with $193.1 million in the first quarter of 2022,
an increase of 30.3%, including 30.9% organic revenue* growth and a
0.6% unfavorable impact related to currency fluctuation. The
organic increase was due primarily to increased sales of both
cooling and heating products resulting from price increases across
the majority of our product lines and volume increases resulting
from improved plant throughput and more stable labor and supply
chain environments.
Segment income in the first quarter of 2023 was
$47.7 million, or 19.0% of revenue. This compares with segment
income of $20.6 million, or 10.7% of revenue in the first quarter
of 2022. The increase in segment income and 830 basis points
increase in segment income margin were due primarily to the higher
revenues noted above and improved absorption of manufacturing costs
resulting from the higher production volumes and more stable labor
and supply chain environments.
Detection & Measurement
Segment
Revenue for the first quarter of 2023 was $148.2
million, compared with $114.0 million in the first quarter of 2022,
an increase of 30.0%, including a 30.1% increase in organic
revenue, a 1.8% increase from the acquisitions of ITL, and a 1.9%
unfavorable impact related to currency fluctuation. The organic
increase was primarily due to higher project sales in our
Communication Technologies, Transportation and Aids to Navigation
platforms, and, to a lesser extent, strong order trends within most
of our short-cycle businesses.
Segment income for the first quarter of 2023 was
$26.7 million, or 18.0% of revenue. This compares with segment
income of $19.0 million, or 16.7% of revenue of in the first
quarter of 2022. The increase in segment income and 130 basis
points increase in segment income margin were due to the higher
revenue noted above.
Financial Update: As of April
1, 2023, SPX Technologies had total outstanding debt of $313.9
million and total cash of $212.7 million. During the first quarter
of 2023, SPX’s net operating cash from continuing operations
totaled $0.8 million. Capital expenditures for continuing
operations for the first quarter of 2023 were $4.0 million.
2023 Guidance Update:
Following a strong first quarter performance and
the acquisition of TAMCO, SPX Technologies is updating full-year
2023 guidance. The company is now targeting consolidated revenue of
approximately $1.61-$1.65 billion ($1.50-$1.54 billion prior), an
adjusted operating income margin* of approximately 14.50%-15.25%
(13%-14% prior), and adjusted earnings per share* in a range of
$3.80-$3.95 ($3.30-$3.55 prior). The company expects to include
ASPEQ Heating Group in its guidance following the closing of its
acquisition, which it anticipates in the second quarter of 2023.
The closing is subject to clearance under the Hart-Scott-Rodino Act
and other customary conditions.
Segment and company performance is expected to be as
follows:
|
|
Revenue |
|
Segment Income Margin % |
HVAC |
|
$1,035-$1,055 million($935-$955 million prior) |
|
17.25%-18.25%(15.25%-16.00% prior) |
Detection & Measurement |
|
$570-$590 million($565-$585 million prior) |
|
20.50%-21.50% |
Total SPX |
|
$1.61-$1.65 billion($1.50-$1.54 billion prior) |
|
18.50%-19.50%(17.00%-18.00% prior) |
Form 10-Q: The company expects
to file its quarterly report on Form 10-Q for the quarter ended
April 1, 2023 with the Securities and Exchange Commission on or
before May 11, 2023. This press release should be read in
conjunction with that filing, which will be available on the
company's website at www.spx.com, in the Investor Relations
section.
Conference Call: SPX
Technologies will host a conference call at 4:45 p.m. (EDT) today
to discuss first quarter results. The call will be simultaneously
webcast via the company's website at www.spx.com and the slide
presentation will be available in the Investor Relations section of
the site.
Call Access: To access the call
by phone, please go to this
linkhttps://register.vevent.com/register/BI7e362231bd394fef9716d205b14e60b8
and you will be provided with dial-in details. To avoid delays, we
encourage participants to dial into the conference call fifteen
minutes ahead of the scheduled start time. A replay of the webcast
will also be available for a limited time at www.spx.com.
Upcoming Investor Events:
Company management plans to conduct virtual meetings with investors
during the second quarter of 2023 and the company will also be
participating in the William Blair Growth Stock Conference in
Chicago on June 7th.
About SPX Technologies, Inc.:
SPX Technologies, Inc. is a diversified, global supplier of highly
engineered products and technologies, holding leadership positions
in the HVAC and detection and measurement markets. Based in
Charlotte, North Carolina, SPX Technologies, Inc. has more than
3,300 employees in 15 countries. SPX Technologies, Inc. is listed
on the New York Stock Exchange under the ticker symbol “SPXC.” For
more information, please visit www.spx.com.
Non-GAAP Financial Information:
This press release contains certain non-GAAP financial measures,
including total segment information, adjusted operating income,
adjusted income from continuing operations before income taxes,
adjusted income from continuing operations, adjusted earnings per
share from continuing operations (or, adjusted EPS) and organic
revenue growth. These non-GAAP financial measures do not provide
investors with an accurate measure of, and should not be used as a
substitute for, the comparable financial measures as determined in
accordance with accounting principles generally accepted in the
United States (“GAAP”). The Company believes these non-GAAP
financial measures, when read in conjunction with the comparable
GAAP financial measures, give investors a useful tool to assess and
understand the Company’s overall financial performance, because
they exclude items of income or expense that the Company believes
are not reflective of its ongoing operating performance, allowing
for a better period-to-period comparison of operations of the
Company. Additionally, the Company’s management uses these non-GAAP
financial measures as measures of the Company’s performance. The
Company acknowledges that there are many items that impact a
company’s reported results and the adjustments reflected in these
non-GAAP measures are not intended to present all items that may
have impacted these results. In addition, these non-GAAP measures
are not necessarily comparable to similarly titled measures used by
other companies.
Refer to the tables included in this press
release for the components of each of the non-GAAP financial
measures, and for the reconciliations of historical non-GAAP
financial measures to their respective comparable GAAP measures.
Our non-GAAP financial guidance excludes items, which would be
included in our GAAP financial measures, that we do not consider
indicative of our on-going performance; and are calculated in a
manner consistent with the presentation of the similarly titled
historical non-GAAP measures presented in this press release. These
items include, but are not limited to, acquisition costs, costs
associated with dispositions, and potential non-cash income or
expense items associated with changes in market interest rates and
actuarial or other data related to our pension and postretirement
plans, as the ultimate aggregate amounts associated with these
items are out of our control and/or cannot be reasonably predicted.
Accordingly, a reconciliation of our non-GAAP financial guidance to
the most comparable GAAP financial measures is not practicable.
Full-year guidance excludes changes in the number of shares
outstanding; impacts from future acquisitions, dispositions and
related transaction costs, restructuring costs, incremental impacts
of tariffs and trade tensions on market demand and costs subsequent
to the end of the first quarter, the impact of foreign exchange
rate changes subsequent to the end of the first quarter, and
environmental and litigation charges.
Forward Looking Statements:
Certain statements in this press release are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and are subject to the safe harbor created
thereby. Please read these results in conjunction with the
Company’s documents filed with the Securities and Exchange
Commission, including the Company’s most recent annual report on
Form 10-K. These filings identify important risk factors and other
uncertainties that could cause actual results to differ from those
contained in the forward-looking statements, including the
following: cyclical changes and specific industry events in the
Company’s markets; changes in anticipated capital investment and
maintenance expenditures by customers; availability, limitations or
cost increases of raw materials and/or commodities that cannot be
recovered in product pricing; the impact of competition on profit
margins and the Company’s ability to maintain or increase market
share; inadequate performance by third-party suppliers and
subcontractors for outsourced products, components and services and
other supply-chain risks; the uncertainty of claims resolution with
respect to the large power projects in South Africa, as well as
claims with respect to, environmental and other contingent
liabilities; the impact of climate change and any legal or
regulatory actions taken in response there to; cyber-security
risks; risks with respect to the protection of intellectual
property, including with respect to the Company’s digitalization
initiatives; the impact of overruns, inflation and the incurrence
of delays with respect to long-term fixed-price contracts; defects
or errors in current or planned products; the impact of the
COVID-19 pandemic and governmental and other actions taken in
response; domestic economic, political, legal, accounting and
business developments adversely affecting the Company’s business,
including regulatory changes; changes in worldwide economic
conditions; uncertainties with respect to the Company’s ability to
identify acceptable acquisition targets; uncertainties surrounding
timing and successful completion of any announced acquisition or
disposition transactions, including with respect to integrating
acquisitions and achieving cost savings or other benefits from
acquisitions; the impact of retained liabilities of disposed
businesses; potential labor disputes; and extreme weather
conditions and natural and other disasters.
Actual results may differ materially from these
statements. The words “guidance,” “believe,” “expect,”
“anticipate,” “project” and similar expressions identify
forward-looking statements. Although the company believes that the
expectations reflected in its forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to be correct.
Statements in this press release speak only as
of the date of this press release, and SPX Technologies disclaims
any responsibility to update or revise such statements, except as
required by law.
SOURCE SPX Technologies, Inc.
Investor and Media
Contacts:Paul Clegg, VP, Investor Relations and
CommunicationsGarrett Roelofs, Assistant Manager, Investor
RelationsPhone: 980-474-3806E-mail: spx.investor@spx.comSource: SPX
Technologies, Inc.
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited; in millions, except per share
amounts) |
|
|
|
|
|
Three months ended |
|
April 1, 2023 |
|
April 2, 2022 |
|
|
|
|
Revenues |
$ |
399.8 |
|
|
$ |
307.1 |
|
Costs and expenses: |
|
|
|
Cost of products sold |
|
249.9 |
|
|
|
203.1 |
|
Selling, general and administrative |
|
93.8 |
|
|
|
84.2 |
|
Intangible amortization |
|
6.3 |
|
|
|
9.3 |
|
Other operating income |
|
— |
|
|
|
(0.9 |
) |
Operating income |
|
49.8 |
|
|
|
11.4 |
|
|
|
|
|
Other income, net |
|
2.5 |
|
|
|
6.5 |
|
Interest expense |
|
(2.4 |
) |
|
|
(2.4 |
) |
Interest income |
|
0.5 |
|
|
|
0.1 |
|
Income from continuing operations before income taxes |
|
50.4 |
|
|
|
15.6 |
|
Income tax provision |
|
(11.3 |
) |
|
|
(2.6 |
) |
Income from continuing operations |
|
39.1 |
|
|
|
13.0 |
|
|
|
|
|
Income (loss) from
discontinued operations, net of tax |
|
— |
|
|
|
— |
|
Gain (loss) on disposition of
discontinued operations, net of tax |
|
3.7 |
|
|
|
(1.6 |
) |
Income (loss) from discontinued operations, net of tax |
|
3.7 |
|
|
|
(1.6 |
) |
|
|
|
|
Net income |
$ |
42.8 |
|
|
$ |
11.4 |
|
|
|
|
|
Basic income per share of
common stock: |
|
|
|
Income from continuing operations |
$ |
0.86 |
|
|
$ |
0.29 |
|
Income (loss) from discontinued operations |
|
0.08 |
|
|
|
(0.04 |
) |
Net income per share |
$ |
0.94 |
|
|
$ |
0.25 |
|
|
|
|
|
Weighted-average number of
common shares outstanding — basic |
|
45.382 |
|
|
|
45.554 |
|
|
|
|
|
Diluted income per share of
common stock: |
|
|
|
Income from continuing operations |
$ |
0.84 |
|
|
$ |
0.28 |
|
Income (loss) from discontinued operations |
|
0.08 |
|
|
|
(0.03 |
) |
Net income per share |
$ |
0.92 |
|
|
$ |
0.25 |
|
|
|
|
|
Weighted-average number of
common shares outstanding — diluted |
|
46.402 |
|
|
|
46.445 |
|
|
|
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited; in millions) |
|
|
|
|
|
April 1, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and equivalents |
$ |
204.8 |
|
|
$ |
147.8 |
|
Accounts receivable, net |
|
274.9 |
|
|
|
263.5 |
|
Contract assets |
|
32.2 |
|
|
|
23.9 |
|
Inventories, net |
|
265.7 |
|
|
|
244.0 |
|
Other current assets |
|
42.2 |
|
|
|
41.9 |
|
Total current assets |
|
819.8 |
|
|
|
721.1 |
|
Property, plant and
equipment: |
|
|
|
Land |
|
13.9 |
|
|
|
13.9 |
|
Buildings and leasehold improvements |
|
63.5 |
|
|
|
63.7 |
|
Machinery and equipment |
|
237.2 |
|
|
|
233.4 |
|
|
|
314.6 |
|
|
|
311.0 |
|
Accumulated depreciation |
|
(204.3 |
) |
|
|
(201.1 |
) |
Property, plant and equipment, net |
|
110.3 |
|
|
|
109.9 |
|
Goodwill |
|
458.0 |
|
|
|
455.3 |
|
Intangibles, net |
|
396.2 |
|
|
|
401.6 |
|
Other assets |
|
194.8 |
|
|
|
197.4 |
|
Deferred income taxes |
|
2.6 |
|
|
|
2.7 |
|
Assets of DBT and Heat
Transfer |
|
39.7 |
|
|
|
42.9 |
|
TOTAL ASSETS |
$ |
2,021.4 |
|
|
$ |
1,930.9 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
120.0 |
|
|
$ |
124.5 |
|
Contract liabilities |
|
65.8 |
|
|
|
52.8 |
|
Accrued expenses |
|
121.3 |
|
|
|
148.0 |
|
Income taxes payable |
|
14.4 |
|
|
|
4.7 |
|
Short-term debt |
|
68.9 |
|
|
|
1.8 |
|
Current maturities of long-term debt |
|
3.5 |
|
|
|
2.0 |
|
Total current liabilities |
|
393.9 |
|
|
|
333.8 |
|
|
|
|
|
Long-term debt |
|
241.5 |
|
|
|
243.0 |
|
Deferred and other income
taxes |
|
30.6 |
|
|
|
34.8 |
|
Other long-term
liabilities |
|
206.2 |
|
|
|
208.3 |
|
Liabilities of DBT and Heat
Transfer |
|
23.1 |
|
|
|
31.8 |
|
Total long-term liabilities |
|
501.4 |
|
|
|
517.9 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock |
|
0.5 |
|
|
|
0.5 |
|
Paid-in capital |
|
1,335.3 |
|
|
|
1,338.3 |
|
Retained deficit |
|
(8.8 |
) |
|
|
(51.6 |
) |
Accumulated other comprehensive income |
|
259.3 |
|
|
|
257.5 |
|
Common stock in treasury |
|
(460.2 |
) |
|
|
(465.5 |
) |
Total stockholders' equity |
|
1,126.1 |
|
|
|
1,079.2 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
2,021.4 |
|
|
$ |
1,930.9 |
|
|
|
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
RESULTS OF REPORTABLE SEGMENTS |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
April 1, 2023 |
|
April 2, 2022 |
|
Δ |
|
%/bps |
HVAC reportable
segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
251.6 |
|
|
$ |
193.1 |
|
|
$ |
58.5 |
|
|
30.3% |
Gross profit |
|
|
88.3 |
|
|
|
54.9 |
|
|
|
33.4 |
|
|
|
Selling, general and
administrative expense |
|
|
40.6 |
|
|
|
34.3 |
|
|
|
6.3 |
|
|
|
Income |
|
$ |
47.7 |
|
|
$ |
20.6 |
|
|
$ |
27.1 |
|
|
131.6% |
as a percent of revenues |
|
|
19.0 |
% |
|
|
10.7 |
% |
|
|
|
830bps |
|
|
|
|
|
|
|
|
|
Detection &
Measurement reportable segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
148.2 |
|
|
$ |
114.0 |
|
|
$ |
34.2 |
|
|
30.0% |
Gross profit |
|
|
61.6 |
|
|
|
49.2 |
|
|
|
12.4 |
|
|
|
Selling, general and
administrative expense |
|
|
34.9 |
|
|
|
30.2 |
|
|
|
4.7 |
|
|
|
Income |
|
$ |
26.7 |
|
|
$ |
19.0 |
|
|
$ |
7.7 |
|
|
40.5% |
as a percent of revenues |
|
|
18.0 |
% |
|
|
16.7 |
% |
|
|
|
130bps |
|
|
|
|
|
|
|
|
|
Consolidated
Revenues |
|
$ |
399.8 |
|
|
$ |
307.1 |
|
|
$ |
92.7 |
|
|
30.2% |
Consolidated Operating
Income |
|
|
49.8 |
|
|
|
11.4 |
|
|
|
38.4 |
|
|
336.8% |
as a percent of revenues |
|
|
12.5 |
% |
|
|
3.7 |
% |
|
|
|
880bps |
Consolidated Segment
Income |
|
|
74.4 |
|
|
|
39.6 |
|
|
|
34.8 |
|
|
87.9% |
as a percent of revenues |
|
|
18.6 |
% |
|
|
12.9 |
% |
|
|
|
570bps |
|
|
|
|
|
|
|
|
|
Consolidated operating
income |
|
$ |
49.8 |
|
|
$ |
11.4 |
|
|
$ |
38.4 |
|
|
|
Exclude: |
|
|
|
|
|
|
|
|
Corporate expense |
|
|
14.6 |
|
|
|
16.6 |
|
|
|
(2.0 |
) |
|
|
Acquisition-related and other costs(1) |
|
|
0.6 |
|
|
|
0.1 |
|
|
|
0.5 |
|
|
|
Long-term incentive compensation expense |
|
|
3.1 |
|
|
|
3.1 |
|
|
|
— |
|
|
|
Amortization of intangible assets(2) |
|
|
6.3 |
|
|
|
9.3 |
|
|
|
(3.0 |
) |
|
|
Other operating income |
|
|
— |
|
|
|
(0.9 |
) |
|
|
0.9 |
|
|
|
Total segment
income |
|
$ |
74.4 |
|
|
$ |
39.6 |
|
|
$ |
34.8 |
|
|
87.9% |
as a percent of revenues |
|
|
18.6 |
% |
|
|
12.9 |
% |
|
|
|
570bps |
|
|
|
|
|
|
|
|
|
(1)Represents certain acquisition-related costs incurred during the
three months ended April 1, 2023 and April 2, 2022 of $0.6 and
$0.1, respectively, including additional “Cost of products sold”
related to the step-up of inventory (to fair value) acquired in
connection with an acquisition of $0.1 during the three months
ended April 2, 2022. |
|
|
|
|
|
|
|
|
|
(2)Represents amortization expense associated with acquired
intangible assets. |
|
|
|
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited; in millions) |
|
|
|
|
|
Three months ended |
|
April 1, 2023 |
|
April 2, 2022 |
Cash flows from (used
in) operating activities: |
|
|
|
Net income |
$ |
42.8 |
|
|
$ |
11.4 |
|
Less: Gain (loss) from
discontinued operations, net of tax |
|
3.7 |
|
|
|
(1.6 |
) |
Income from continuing
operations |
|
39.1 |
|
|
|
13.0 |
|
Adjustments to reconcile
income from continuing operations to net cash from (used in)
operating activities: |
|
|
|
Gain on change in fair value of equity security |
|
(3.6 |
) |
|
|
(4.4 |
) |
Deferred and other income taxes |
|
(3.5 |
) |
|
|
4.3 |
|
Depreciation and amortization |
|
10.7 |
|
|
|
14.0 |
|
Pension and other employee benefits |
|
3.5 |
|
|
|
1.6 |
|
Long-term incentive compensation |
|
3.1 |
|
|
|
3.1 |
|
Other, net |
|
(1.5 |
) |
|
|
0.6 |
|
Changes in operating assets
and liabilities, net of effects from acquisitions and
divestitures: |
|
|
|
Accounts receivable and other assets |
|
(15.1 |
) |
|
|
10.4 |
|
Inventories |
|
(21.2 |
) |
|
|
(25.6 |
) |
Accounts payable, accrued expenses and other |
|
(10.7 |
) |
|
|
(65.5 |
) |
Cash spending on restructuring actions |
|
— |
|
|
|
(0.1 |
) |
Net cash from (used in)
continuing operations |
|
0.8 |
|
|
|
(48.6 |
) |
Net cash used in discontinued
operations |
|
(5.2 |
) |
|
|
(8.6 |
) |
Net cash used in operating
activities |
|
(4.4 |
) |
|
|
(57.2 |
) |
|
|
|
|
Cash flows from (used
in) investing activities: |
|
|
|
Proceeds related to company-owned life insurance policies, net |
|
0.1 |
|
|
|
— |
|
Business acquisition, net of cash acquired |
|
— |
|
|
|
(41.8 |
) |
Capital expenditures |
|
(4.0 |
) |
|
|
(2.1 |
) |
Net cash used in continuing
operations |
|
(3.9 |
) |
|
|
(43.9 |
) |
Net cash used in discontinued
operations |
|
— |
|
|
|
(13.9 |
) |
Net cash used in investing
activities |
|
(3.9 |
) |
|
|
(57.8 |
) |
|
|
|
|
Cash flows from (used
in) financing activities: |
|
|
|
Borrowings under senior credit facilities |
|
20.0 |
|
|
|
— |
|
Repayments under senior credit facilities |
|
— |
|
|
|
(3.1 |
) |
Borrowings under trade receivables arrangement |
|
47.0 |
|
|
|
— |
|
Repayments under trade receivables arrangement |
|
— |
|
|
|
— |
|
Net repayments under other financing arrangements |
|
— |
|
|
|
(0.2 |
) |
Payment of contingent consideration |
|
— |
|
|
|
(1.3 |
) |
Minimum withholdings paid on behalf of employees for net share
settlements, net of proceeds from the exercise of employee stock
options |
|
(4.1 |
) |
|
|
(6.4 |
) |
Net cash from (used in)
continuing operations |
|
62.9 |
|
|
|
(11.0 |
) |
Net cash used in discontinued
operations |
|
— |
|
|
|
(0.4 |
) |
Net cash from (used in)
financing activities |
|
62.9 |
|
|
|
(11.4 |
) |
Change in cash and equivalents
due to changes in foreign currency exchange rates |
|
1.0 |
|
|
|
(0.1 |
) |
Net change in cash and
equivalents |
|
55.6 |
|
|
|
(126.5 |
) |
Consolidated cash and
equivalents, beginning of period |
|
157.1 |
|
|
|
396.0 |
|
Consolidated cash and
equivalents, end of period |
$ |
212.7 |
|
|
$ |
269.5 |
|
|
Three months ended |
|
April 1, 2023 |
|
April 2, 2022 |
Components of cash and
equivalents: |
|
|
|
Cash and equivalents |
$ |
204.8 |
|
|
$ |
262.8 |
|
Cash and equivalents included
in assets of DBT and Heat Transfer |
|
7.9 |
|
|
|
6.7 |
|
Total cash and
equivalents |
$ |
212.7 |
|
|
$ |
269.5 |
|
|
|
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CASH AND DEBT RECONCILIATION |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
|
|
April 1, 2023 |
|
|
|
|
|
|
|
|
Beginning cash and
equivalents |
|
$ |
157.1 |
|
|
|
|
|
|
|
|
|
Cash from continuing
operations |
|
|
0.8 |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(4.0 |
) |
|
|
|
|
|
|
|
|
Proceeds from company-owned
life insurance policies, net |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
Borrowings under senior credit
facilities |
|
|
20.0 |
|
|
|
|
|
|
|
|
|
Borrowings under trade
receivables agreement |
|
|
47.0 |
|
|
|
|
|
|
|
|
|
Minimum withholdings paid on
behalf of employees for net share settlements, net of proceeds from
the exercise of employee stock options |
|
|
(4.1 |
) |
|
|
|
|
|
|
|
|
Cash used in discontinued
operations |
|
|
(5.2 |
) |
|
|
|
|
|
|
|
|
Change in cash due to changes
in foreign currency exchange rates |
|
|
1.0 |
|
|
|
|
|
|
|
|
|
Ending cash and
equivalents |
|
$ |
212.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt at |
|
|
|
|
|
|
|
Debt at |
|
|
December 31, 2022 |
|
Borrowings |
|
Repayments |
|
Other |
|
April 1, 2023 |
Revolving loans |
|
$ |
— |
|
|
$ |
20.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
20.0 |
|
Term loan |
|
|
245.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
245.0 |
|
Trade receivables financing
arrangement |
|
|
— |
|
|
|
47.0 |
|
|
|
— |
|
|
|
— |
|
|
|
47.0 |
|
Other indebtedness |
|
|
2.5 |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.1 |
|
|
|
2.6 |
|
Less: Deferred financing costs
associated with the term loan |
|
|
(0.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.7 |
) |
Totals |
|
$ |
246.8 |
|
|
$ |
67.1 |
|
|
$ |
(0.1 |
) |
|
$ |
0.1 |
|
|
$ |
313.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ORGANIC REVENUE |
HVAC AND DETECTION & MEASUREMENT REPORTABLE
SEGMENTS |
(Unaudited) |
|
|
|
|
|
|
|
|
Three months ended April 1, 2023 |
|
|
|
HVAC |
|
Detection &Measurement |
|
Net Revenue Growth |
|
30.3 |
|
% |
30.0 |
|
% |
|
|
|
|
|
|
Exclude: Foreign Currency |
|
(0.6 |
) |
% |
(1.9 |
) |
% |
|
|
|
|
|
|
Exclude: Acquisitions |
|
— |
|
% |
1.8 |
|
% |
|
|
|
|
|
|
Organic Revenue Growth |
|
30.9 |
|
% |
30.1 |
|
% |
|
|
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ADJUSTED OPERATING
INCOME |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
April 1, 2023 |
|
April 2, 2022 |
Operating income |
|
$ |
49.8 |
|
|
$ |
11.4 |
|
|
|
|
|
|
Include - TSA Income(1) |
|
|
0.1 |
|
|
|
0.9 |
|
|
|
|
|
|
Exclude: |
|
|
|
|
Acquisition-related and other costs(2) |
|
|
(2.1 |
) |
|
|
(4.4 |
) |
|
|
|
|
|
Other operating income(3) |
|
|
— |
|
|
|
0.9 |
|
|
|
|
|
|
Amortization expense(4) |
|
|
(6.3 |
) |
|
|
(9.3 |
) |
|
|
|
|
|
Adjusted operating income |
|
$ |
58.3 |
|
|
$ |
25.1 |
|
as a percent of revenues |
|
|
14.6 |
% |
|
|
8.2 |
% |
|
|
|
|
|
(1)Represents transition services income related to the Asbestos
Portfolio Sale for the three months ended April 1, 2023 and the
Transformer Solutions disposition for the three months ended April
2, 2022. Amounts recorded in non-operating income for U.S. GAAP
purposes. The Asbestos Portfolio Sale and Transformer Solutions
disposition are described in the Company’s most recent Form
10-K. |
|
|
|
|
|
(2)For the three months ended April 1, 2023, represents certain
acquisition-related costs and transformation initiatives ($2.1).
For the three months ended April 2, 2022, represents (i) certain
acquisition-related costs and transformation initiatives ($4.2) and
(ii) costs associated with our South Africa business that could not
be allocated to discontinued operations for U.S. GAAP purposes
($0.2). |
|
|
|
|
|
(3)Represents a gain of $0.9 during the three months ended April 2,
2022 related to a revision of the liability associated with
contingent consideration on a recent acquisition. |
|
|
|
|
|
(4)Represents non-cash amortization expense associated with
acquired intangible assets. |
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ADJUSTED EARNINGS PER
SHARE |
Three Months Ended April 1, 2023 |
(Unaudited; in millions, except per share
values) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Adjustments |
|
Adjusted |
Segment income |
$ |
74.4 |
|
|
$ |
— |
|
|
$ |
74.4 |
|
Corporate expense(1) |
|
(14.6 |
) |
|
|
1.6 |
|
|
|
(13.0 |
) |
Acquisition-related costs(2) |
|
(0.6 |
) |
|
|
0.6 |
|
|
|
— |
|
Long-term incentive compensation expense |
|
(3.1 |
) |
|
|
— |
|
|
|
(3.1 |
) |
Amortization of intangible assets(3) |
|
(6.3 |
) |
|
|
6.3 |
|
|
|
— |
|
Operating
income |
|
49.8 |
|
|
|
8.5 |
|
|
|
58.3 |
|
|
|
|
|
|
|
Other income, net(4) |
|
2.5 |
|
|
|
(2.5 |
) |
|
|
— |
|
Interest expense, net |
|
(1.9 |
) |
|
|
— |
|
|
|
(1.9 |
) |
Income from continuing
operations before income taxes |
|
50.4 |
|
|
|
6.0 |
|
|
|
56.4 |
|
Income tax provision(5) |
|
(11.3 |
) |
|
|
(2.0 |
) |
|
|
(13.3 |
) |
Income from continuing
operations |
|
39.1 |
|
|
|
4.0 |
|
|
|
43.1 |
|
|
|
|
|
|
|
Diluted shares
outstanding |
|
46.402 |
|
|
|
|
|
46.402 |
|
|
|
|
|
|
|
Earnings per share
from continuing operations |
$ |
0.84 |
|
|
|
|
$ |
0.93 |
|
|
|
|
|
|
|
(1)Adjustment represents the removal of acquisition and
strategic/transformation related expenses ($1.5) and a
reclassification of transition services income ($0.1) from “Other
Income, net.” |
|
(2)Adjustment represents the removal of integration costs of $0.4
and $0.2 within the Detection & Measurement and HVAC reportable
segments, respectively. |
|
(3)Adjustment represents the removal of amortization expense
associated with acquired intangible assets of $4.3 and $2.0 within
the Detection & Measurement and HVAC reportable segments,
respectively. |
|
|
|
|
|
|
(4)Adjustment represents the removal of (i) a gain on an equity
security associated with a fair value adjustment ($3.6), (ii)
non-service pension and postretirement charges ($1.2), as well as
the reclassification of income related to a transition services
agreement ($0.1) to “Corporate expense.” |
|
|
|
|
|
|
(5)Adjustment represents the tax impact of items (1) through
(4). |
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ADJUSTED EARNINGS PER
SHARE |
Three Months Ended April 2, 2022 |
(Unaudited; in millions, except per share
values) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Adjustments |
|
Adjusted |
Segment income |
$ |
39.6 |
|
|
$ |
— |
|
|
$ |
39.6 |
|
Corporate expense(1) |
|
(16.6 |
) |
|
|
5.2 |
|
|
|
(11.4 |
) |
Acquisition-related costs(2) |
|
(0.1 |
) |
|
|
0.1 |
|
|
|
— |
|
Long-term incentive compensation expense |
|
(3.1 |
) |
|
|
— |
|
|
|
(3.1 |
) |
Amortization of intangible assets(3) |
|
(9.3 |
) |
|
|
9.3 |
|
|
|
— |
|
Other operating income(4) |
|
0.9 |
|
|
|
(0.9 |
) |
|
|
— |
|
Operating
income |
|
11.4 |
|
|
|
13.7 |
|
|
|
25.1 |
|
|
|
|
|
|
|
Other income, net(5) |
|
6.5 |
|
|
|
(4.9 |
) |
|
|
1.6 |
|
Interest expense, net |
|
(2.3 |
) |
|
|
— |
|
|
|
(2.3 |
) |
Income from continuing
operations before income taxes |
|
15.6 |
|
|
|
8.8 |
|
|
|
24.4 |
|
Income tax provision(6) |
|
(2.6 |
) |
|
|
(3.0 |
) |
|
|
(5.6 |
) |
Income from continuing
operations |
|
13.0 |
|
|
|
5.8 |
|
|
|
18.8 |
|
|
|
|
|
|
|
Diluted shares
outstanding |
|
46.445 |
|
|
|
|
|
46.445 |
|
|
|
|
|
|
|
Earnings per share
from continuing operations |
$ |
0.28 |
|
|
|
|
$ |
0.40 |
|
|
|
|
|
|
|
(1)Adjustment represents the removal of acquisition and
strategic/transformation related expenses ($4.1), costs associated
with our South Africa business that could not be allocated to
discontinued operations for U.S. GAAP purposes ($0.2), as well as a
reclassification of transition services income ($0.9) from “Other
income, net.” |
|
(2)Adjustment represents the removal of inventory step-up charges
related to the ITL acquisition of $0.1 within the Detection &
Measurement reportable segment. |
|
(3)Adjustment represents the removal of amortization expense
associated with acquired intangible assets of $5.4 and $3.9 within
the HVAC and Detection & Measurement reportable segments,
respectively. |
|
|
|
|
|
|
(4)Adjustment represents the removal of a gain related to a
revision of the liability associated with contingent consideration
on a recent acquisition. |
|
|
|
|
|
|
(5)Adjustment represents the removal of (i) a gain on an equity
security associated with a fair value adjustment ($4.4), (ii)
non-service pension and postretirement charges ($0.4), as well as
the reclassification of income related to a transition services
agreement ($0.9) to “Corporate expense.” |
|
|
|
|
|
|
(6)Adjustment represents the tax impact of items (1) through (5)
above and the removal of non-recurring tax benefits associated with
transformation initiatives. |
|
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