SPX Technologies, Inc. (NYSE:SPXC) (“SPX”, the “Company”, “we” or
“our”) today reported results for the fourth quarter and year ended
December 31, 2023.
Gene Lowe, President and CEO, remarked, “I am
very pleased with our full-year 2023 results, including Adjusted
EBITDA* growth of 50% and Adjusted EPS* growth of 39%, which is
near the top end of our guidance range. Our strong Q4 performance
included record margin and profitability in our HVAC segment,
supported by robust customer demand and solid operational
execution.”
Mr. Lowe continued, “I am proud of our team’s
accomplishments over the past year. We made significant progress on
our key initiatives, including digital, continuous improvement, and
sustainability. We completed two strategic acquisitions in our HVAC
segment that strengthened our positions in the attractive
Engineered Air Movement (EAM) and Electrical Heating markets.
Recently, we further expanded our position in EAM with the
acquisition of Ingénia, a provider of high-value custom air
handling units that broadens our growth opportunities and
geographic reach.”
Mr. Lowe further commented, “Looking ahead we
see continued demand strength in key markets and solid execution
trends in our businesses, positioning us well to achieve another
year of strong revenue and earnings growth. For 2024, we anticipate
Adjusted EBITDA* in a range of $375 million to $405 million, which
reflects approximately 25% growth at the midpoint, and Adjusted
EPS* in a range of $4.85 to $5.15, which reflects 16% growth at the
midpoint.”
Fourth Quarter 2023
Overview:
Revenue for the fourth quarter of 2023 was
$469.4 million, compared with $429.3 million in the fourth quarter
of 2022.
Operating income in the fourth quarter of 2023
was $63.1 million. This compares with an operating loss of $(24.9)
million in the fourth quarter of 2022, which includes the effects
of a $73.9 million loss related to the divestiture of the asbestos
portfolio (“Asbestos Portfolio Sale”) and a $13.4 million
impairment charge related to goodwill and intangible assets.
Diluted income per share from continuing operations in the fourth
quarter of 2023 was $0.67, compared with a diluted loss per share
from continuing operations in the fourth quarter of 2022 of
$(0.55).
Adjusted operating income* in the fourth quarter
of 2023 was $85.2 million, which excludes intangible amortization
expense and acquisition related and other costs of $13.1 million,
as well as a charge related to the resolution of a dispute with a
former rep of $9.0 million. Adjusted operating income* in the
fourth quarter of 2022 was $71.8 million, which excludes the effect
of the $73.9 million Asbestos Portfolio Sale loss and $13.4 million
impairment charge noted above, as well as intangible amortization
expense and acquisition related and other costs of $8.9
million.
Adjusted earnings per share* in the fourth
quarter of 2023 was $1.25, compared with $1.17 in the fourth
quarter of 2022. Adjusted earnings per share* for the fourth
quarter of 2023 exclude the items noted above, as well as
non-service pension and post-retirement charges of $12.5 million.
Adjusted earnings per share* for the fourth quarter of 2022 exclude
the items noted above, as well as non-service pension and
post-retirement gains of $7.2 million.
Full Year 2023 Overview:
For the full year of 2023, the Company reported
revenue of $1,741.2 million and operating income of $221.9 million,
compared with revenue of $1,460.9 million and operating income of
$51.0 million in 2022. Operating income for the full year of 2023
included the effect of the $9.0 million charge associated with the
dispute resolution noted above. Operating income for the full year
of 2022 included the effect of the $73.9 million loss associated
with the Asbestos Portfolio Sale and the $13.4 million impairment
charge noted above.
Diluted income per share from continuing
operations in 2023 was $3.10, compared with $0.43 in 2022. In
addition to the $9.0 million charge noted above, diluted income per
share from continuing operations in 2023 included a $3.6 million
gain on an equity security associated with a fair value adjustment,
and non-service pension and postretirement losses of $16.1 million.
In addition to the $73.9 million loss and the $13.4 million charge
noted above, diluted income per share from continuing operations in
2022 included the effect of a $16.5 million charge associated with
asbestos product liability matters, and a loss of $3.0 million on
an equity security associated with a fair value adjustment.
Adjusted operating income*, which excludes
intangible amortization expense and acquisition-related and other
costs, was $288.7 million in 2023, compared with $187.4 million in
2022. Adjusted earnings per share* in 2023 was $4.31, compared with
$3.10 in 2022. Adjusted earnings per share* for both periods
excludes the items noted above.
Fourth Quarter and Full-Year Financial
Comparisons:
($ millions) |
|
Q4 2023 |
|
Q4 2022 |
|
FY 2023 |
|
FY 2022 |
Revenue |
|
$ |
469.4 |
|
$ |
429.3 |
|
|
$ |
1,741.2 |
|
$ |
1,460.9 |
Consolidated operating income
(loss) |
|
|
63.1 |
|
|
(24.9 |
) |
|
|
221.9 |
|
|
51.0 |
Income (loss) from continuing
operations |
|
|
31.6 |
|
|
(24.8 |
) |
|
|
144.7 |
|
|
19.8 |
Consolidated segment income* |
|
|
102.8 |
|
|
90.5 |
|
|
|
353.2 |
|
|
249.6 |
Adjusted operating income* |
|
|
85.2 |
|
|
71.8 |
|
|
|
288.7 |
|
|
187.4 |
* Non-GAAP financial measure. See attached schedules for
reconciliation of historical non-GAAP measures to most comparable
GAAP financial measure.
HVAC
Revenue for the fourth quarter of 2023 was
$312.5 million, compared with $274.2 million in the fourth quarter
of 2022, an increase of 14.0%, including a (2.0)% decrease in
organic revenue, a 15.7% increase from the acquisition of TAMCO and
ASPEQ, and a 0.3% favorable impact related to currency fluctuation.
The decrease in organic revenue was primarily due to lower volumes
of heating products associated with warmer-than-typical seasonal
temperatures during the winter months, partially offset by higher
volumes of cooling products.
Segment income in the fourth quarter of 2023 was
$73.2 million, or 23.4% of revenue. This compares with segment
income of $53.5 million, or 19.5% of revenue in the fourth quarter
of 2022. The increase in segment income was due primarily to the
higher cooling volumes and acquisitions noted above. The 390 basis
points increase in segment income margin was due primarily to
greater absorption of manufacturing costs associated with higher
cooling volumes, improved operational execution, and more favorable
sales mix associated with acquisitions.
For the full year of 2023, revenue was $1,122.3
million, compared with $913.8 million in 2022, an increase of
22.8%, including a 12.2% increase in organic revenue, a 10.8%
increase from the acquisition of TAMCO and ASPEQ, and a 0.2%
unfavorable impact related to currency fluctuation. The increase in
organic revenue was associated with volume increases, primarily of
cooling products, resulting from greater plant throughput and more
stable labor and supply chain environments, as well as price
increases.
For the full year of 2023, segment income was
$234.4 million, or 20.9% of revenue. This compares with segment
income of $135.5 million, or 14.8% of revenue in 2022. The increase
in segment income was due primarily to the increase in revenue
noted above. The increase in segment income margin was due
primarily to the increase in revenue noted above, improved
operational execution across our heating and cooling businesses,
and more favorable sales mix, primarily associated with
acquisitions.
Detection & Measurement
Revenue for the fourth quarter of 2023 was
$156.9 million, compared with $155.1 million in the fourth quarter
of 2022, an increase of 1.2%, including a (0.2)% decrease in
organic revenue and a 1.4% favorable impact related to currency
fluctuation. The decrease in organic revenue was due primarily to
lower volumes in our location and inspection and aids to navigation
businesses, partially offset by higher project-related volumes in
our communication technologies business.
Segment income for the fourth quarter of 2023
was $29.6 million, or 18.9% of revenue. This compares with segment
income of $37.0 million, or 23.9% of revenue in the fourth quarter
of 2022. The decrease in segment income and 500 basis points
decrease in segment income margin were due primarily to a less
favorable mix associated with the lower volumes in our location and
inspection and aids to navigation businesses, and higher
project-related volumes in our communication technologies business
associated with a project that has significant pass-through
content, in addition to higher costs within the segment.
For the full year of 2023, revenue was $618.9
million, compared with $547.1 million in 2022, an increase of
13.1%, including a 12.4% increase in organic revenue, a 0.4%
increase from the acquisition of ITL, and a 0.3% favorable impact
related to currency fluctuation. The increase in organic revenue
was primarily driven by higher volumes in our communication
technologies, transportation and aids to navigation businesses.
For the full year of 2023, segment income was
$118.8 million, or 19.2% of revenue. This compares with segment
income of $114.1 million, or 20.9% of revenue in 2022. The increase
in segment income was due primarily to the increase in revenues
noted above. The decrease in margin was primarily due to a less
favorable sales mix.
Financial Update: As of
December 31, 2023, SPX had total outstanding debt of $558.3 million
and total cash of $104.9 million. During the fourth quarter and
full year of 2023, SPX generated net operating cash from continuing
operations of $123.8 million and $243.8 million respectively.
Capital expenditures for continuing operations for the fourth
quarter and full year of 2023 were $7.4 million and $23.9 million,
respectively.
2024 Guidance:
For the full year 2024, SPX is targeting
consolidated revenue of approximately $1.93 to $2.0 billion,
adjusted EBITDA* of approximately $375 to $405 million, up from
$310.3 million in 2023, and adjusted earnings per share* in a range
of $4.85 to $5.15.
Segment and company performance is expected to be as
follows:
|
|
Revenue |
|
Segment Income Margin % |
HVAC |
|
$1,325-$1,375 million($1,122 million in 2023) |
|
21.25%-22.25%(20.9% in 2023) |
Detection & Measurement |
|
$605-$625 million($619 million in 2023) |
|
20.00%-21.00%(19.2% in 2023) |
Total SPX Adjusted |
|
$1.93-$2.0 billion($1.74 billion in 2023) |
|
21.00%-22.00%(20.3% in 2023) |
Form 10-K: The Company expects
to file its annual report on Form 10-K for the year ended December
31, 2023 with the Securities and Exchange Commission on or before
February 29, 2024. 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 will host
a conference call at 4:45 p.m. (EDT) today to discuss fourth
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 Process: To access the call by
phone, please go to the following link and you will be provided
with dial-in details.
https://register.vevent.com/register/BI7b79b9521d5246d0ad510138487e4a30
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 first
quarter of 2024, including an Investor Day on March 26th in New
York City. The event will be webcast and archived on our website.
To receive an invitation to attend the event in person, please
contact SPX Technologies’ Investor Relations team at
spx.investor@spx.com.
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
4,100 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 Presentation: This
press release contains certain non-GAAP financial measures,
including consolidated segment income, 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), EBITDA,
Adjusted EBITDA, 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 impacts from future acquisitions,
dispositions and related transaction costs, incremental impacts of
tariffs and trade tensions on market demand and costs subsequent to
the end of the year, the impact of foreign exchange rate changes
subsequent to the end of the year, 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 and quarterly report on Form 10-Q. 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 environmental and other contingent liabilities; the
impact of climate change and any legal or regulatory actions taken
in response thereto; 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 pandemics 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, including as a result of
geopolitical conflicts; uncertainties with respect to the Company’s
ability to identify acceptable acquisition targets; uncertainties
surrounding timing and successful completion of any 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.
Investor and Media
Contacts:Paul Clegg, VP, Investor Relations and
CommunicationsPhone: 980-474-3806E-mail: spx.investor@spx.com
Source: SPX Technologies, Inc.
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited; in millions, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
Revenues |
$ |
469.4 |
|
|
$ |
429.3 |
|
|
$ |
1,741.2 |
|
|
$ |
1,460.9 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of products sold |
|
281.5 |
|
|
|
267.1 |
|
|
|
1,071.2 |
|
|
|
937.0 |
|
Selling, general and administrative |
|
103.5 |
|
|
|
94.1 |
|
|
|
394.4 |
|
|
|
355.7 |
|
Intangible amortization |
|
11.5 |
|
|
|
5.4 |
|
|
|
43.9 |
|
|
|
28.5 |
|
Impairment of goodwill and intangible assets |
|
— |
|
|
|
13.4 |
|
|
|
— |
|
|
|
13.4 |
|
Special charges, net |
|
0.8 |
|
|
|
0.3 |
|
|
|
0.8 |
|
|
|
0.4 |
|
Other operating expense,
net |
|
9.0 |
|
|
|
73.9 |
|
|
|
9.0 |
|
|
|
74.9 |
|
Operating income (loss) |
|
63.1 |
|
|
|
(24.9 |
) |
|
|
221.9 |
|
|
|
51.0 |
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
(12.4 |
) |
|
|
4.6 |
|
|
|
(10.1 |
) |
|
|
(15.2 |
) |
Interest expense |
|
(9.2 |
) |
|
|
(2.0 |
) |
|
|
(27.2 |
) |
|
|
(9.3 |
) |
Interest income |
|
0.2 |
|
|
|
0.3 |
|
|
|
1.7 |
|
|
|
1.7 |
|
Loss on amendment/refinancing of
senior credit agreement |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.1 |
) |
Income (loss) from continuing operations before income taxes |
|
41.7 |
|
|
|
(22.0 |
) |
|
|
186.3 |
|
|
|
27.1 |
|
Income tax provision |
|
(10.1 |
) |
|
|
(2.8 |
) |
|
|
(41.6 |
) |
|
|
(7.3 |
) |
Income (loss) from continuing operations |
|
31.6 |
|
|
|
(24.8 |
) |
|
|
144.7 |
|
|
|
19.8 |
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on disposition of
discontinued operations, net of tax |
|
(0.1 |
) |
|
|
(2.5 |
) |
|
|
(54.8 |
) |
|
|
(19.6 |
) |
Loss from discontinued operations, net of tax |
|
(0.1 |
) |
|
|
(2.5 |
) |
|
|
(54.8 |
) |
|
|
(19.6 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
31.5 |
|
|
$ |
(27.3 |
) |
|
$ |
89.9 |
|
|
$ |
0.2 |
|
|
|
|
|
|
|
|
|
Basic income (loss) per share
of common stock: |
|
|
|
|
|
|
|
Income (loss) from continuing operations |
$ |
0.69 |
|
|
$ |
(0.55 |
) |
|
$ |
3.18 |
|
|
$ |
0.44 |
|
Loss from discontinued operations |
|
— |
|
|
|
(0.05 |
) |
|
|
(1.21 |
) |
|
|
(0.44 |
) |
Net income (loss) per share |
$ |
0.69 |
|
|
$ |
(0.60 |
) |
|
$ |
1.97 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Weighted-average number of
common shares outstanding — basic |
|
45.656 |
|
|
|
45.236 |
|
|
|
45.545 |
|
|
|
45.345 |
|
|
|
|
|
|
|
|
|
Diluted income (loss) per
share of common stock: |
|
|
|
|
|
|
|
Income (loss) from continuing operations |
$ |
0.67 |
|
|
$ |
(0.55 |
) |
|
$ |
3.10 |
|
|
$ |
0.43 |
|
Loss from discontinued operations |
|
— |
|
|
|
(0.05 |
) |
|
|
(1.17 |
) |
|
|
(0.43 |
) |
Net income (loss) per share |
$ |
0.67 |
|
|
$ |
(0.60 |
) |
|
$ |
1.93 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Weighted-average number of
common shares outstanding — diluted |
|
46.873 |
|
|
|
45.236 |
|
|
|
46.612 |
|
|
|
46.221 |
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Unaudited; in millions) |
|
|
|
|
|
December 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and equivalents |
$ |
99.4 |
|
|
$ |
147.8 |
|
Accounts receivable, net |
|
279.8 |
|
|
|
263.5 |
|
Contract assets |
|
16.6 |
|
|
|
23.9 |
|
Inventories, net |
|
276.7 |
|
|
|
244.0 |
|
Other current assets |
|
37.1 |
|
|
|
41.9 |
|
Total current assets |
|
709.6 |
|
|
|
721.1 |
|
Property, plant and
equipment: |
|
|
|
Land |
|
17.9 |
|
|
|
13.9 |
|
Buildings and leasehold improvements |
|
73.4 |
|
|
|
63.7 |
|
Machinery and equipment |
|
264.4 |
|
|
|
233.4 |
|
|
|
355.7 |
|
|
|
311.0 |
|
Accumulated depreciation |
|
(215.2 |
) |
|
|
(201.1 |
) |
Property, plant and equipment, net |
|
140.5 |
|
|
|
109.9 |
|
Goodwill |
|
704.8 |
|
|
|
455.3 |
|
Intangibles, net |
|
680.8 |
|
|
|
401.6 |
|
Other assets |
|
188.9 |
|
|
|
197.4 |
|
Deferred income taxes |
|
4.0 |
|
|
|
2.7 |
|
Assets of DBT and Heat
Transfer |
|
11.1 |
|
|
|
42.9 |
|
TOTAL ASSETS |
$ |
2,439.7 |
|
|
$ |
1,930.9 |
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
118.7 |
|
|
$ |
124.5 |
|
Contract liabilities |
|
73.5 |
|
|
|
52.8 |
|
Accrued expenses |
|
168.5 |
|
|
|
148.0 |
|
Income taxes payable |
|
5.3 |
|
|
|
4.7 |
|
Short-term debt |
|
17.9 |
|
|
|
1.8 |
|
Current maturities of long-term debt |
|
17.3 |
|
|
|
2.0 |
|
Total current liabilities |
|
401.2 |
|
|
|
333.8 |
|
Long-term debt |
|
523.1 |
|
|
|
243.0 |
|
Deferred and other income
taxes |
|
77.0 |
|
|
|
34.8 |
|
Other long-term
liabilities |
|
204.1 |
|
|
|
208.3 |
|
Liabilities of DBT and Heat
Transfer |
|
39.7 |
|
|
|
31.8 |
|
Total long-term liabilities |
|
843.9 |
|
|
|
517.9 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock |
|
0.5 |
|
|
|
0.5 |
|
Paid-in capital |
|
1,353.6 |
|
|
|
1,338.3 |
|
Retained earnings (deficit) |
|
38.3 |
|
|
|
(51.6 |
) |
Accumulated other comprehensive income |
|
261.1 |
|
|
|
257.5 |
|
Common stock in treasury |
|
(458.9 |
) |
|
|
(465.5 |
) |
Total stockholders' equity |
|
1,194.6 |
|
|
|
1,079.2 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
2,439.7 |
|
|
$ |
1,930.9 |
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited; in millions) |
|
|
Three months ended |
|
Twelve months ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Cash flows from (used
in) operating activities: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
31.5 |
|
|
$ |
(27.3 |
) |
|
$ |
89.9 |
|
|
$ |
0.2 |
|
Less: Loss from discontinued
operations, net of tax |
|
(0.1 |
) |
|
|
(2.5 |
) |
|
|
(54.8 |
) |
|
|
(19.6 |
) |
Income (loss) from continuing
operations |
|
31.6 |
|
|
|
(24.8 |
) |
|
|
144.7 |
|
|
|
19.8 |
|
Adjustments to reconcile
income (loss) from continuing operations to net cash from (used in)
operating activities |
|
|
|
|
|
|
|
Loss on divestiture of asbestos-related assets and liabilities |
|
— |
|
|
|
73.9 |
|
|
|
— |
|
|
|
73.9 |
|
Special charges, net |
|
0.8 |
|
|
|
0.3 |
|
|
|
0.8 |
|
|
|
0.4 |
|
(Gain) loss on change in fair value of equity security |
|
— |
|
|
|
— |
|
|
|
(3.6 |
) |
|
|
3.0 |
|
Loss on amendment/refinancing of senior credit agreement |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.1 |
|
Impairment of goodwill and intangible assets |
|
— |
|
|
|
13.4 |
|
|
|
— |
|
|
|
13.4 |
|
Deferred and other income taxes |
|
(2.7 |
) |
|
|
(4.5 |
) |
|
|
(25.2 |
) |
|
|
(21.4 |
) |
Depreciation and amortization |
|
16.8 |
|
|
|
9.5 |
|
|
|
63.2 |
|
|
|
46.4 |
|
Pension and other employee benefits |
|
13.8 |
|
|
|
(6.6 |
) |
|
|
22.0 |
|
|
|
3.4 |
|
Long-term incentive compensation |
|
3.4 |
|
|
|
3.2 |
|
|
|
13.4 |
|
|
|
10.9 |
|
Other, net |
|
(1.4 |
) |
|
|
(0.9 |
) |
|
|
(5.9 |
) |
|
|
0.5 |
|
Contribution to divest
asbestos-related assets and liabilities |
|
— |
|
|
|
(138.8 |
) |
|
|
— |
|
|
|
(138.8 |
) |
Changes in operating assets
and liabilities, net of effects from acquisitions and
divestitures |
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
47.3 |
|
|
|
20.6 |
|
|
|
30.6 |
|
|
|
(0.3 |
) |
Inventories |
|
18.5 |
|
|
|
25.0 |
|
|
|
(3.1 |
) |
|
|
(53.4 |
) |
Accounts payable, accrued expenses and other |
|
(4.2 |
) |
|
|
3.9 |
|
|
|
7.0 |
|
|
|
(73.7 |
) |
Cash spending on restructuring actions |
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.4 |
) |
Net cash from (used in)
continuing operations |
|
123.8 |
|
|
|
(25.8 |
) |
|
|
243.8 |
|
|
|
(115.2 |
) |
Net cash from (used in)
discontinued operations |
|
2.7 |
|
|
|
(0.5 |
) |
|
|
(35.3 |
) |
|
|
(21.6 |
) |
Net cash from (used in)
operating activities |
|
126.5 |
|
|
|
(26.3 |
) |
|
|
208.5 |
|
|
|
(136.8 |
) |
|
|
|
|
|
|
|
|
Cash flows from (used
in) investing activities: |
|
|
|
|
|
|
|
Proceeds (payments) related to company-owned life insurance
policies, net |
|
(1.9 |
) |
|
|
(0.9 |
) |
|
|
0.7 |
|
|
|
3.7 |
|
Business acquisitions, net of cash acquired |
|
0.3 |
|
|
|
— |
|
|
|
(547.0 |
) |
|
|
(40.0 |
) |
Capital expenditures |
|
(7.4 |
) |
|
|
(5.9 |
) |
|
|
(23.9 |
) |
|
|
(15.9 |
) |
Net cash used in continuing
operations |
|
(9.0 |
) |
|
|
(6.8 |
) |
|
|
(570.2 |
) |
|
|
(52.2 |
) |
Net cash used in discontinued
operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(13.9 |
) |
Net cash used in investing
activities |
|
(9.0 |
) |
|
|
(6.8 |
) |
|
|
(570.2 |
) |
|
|
(66.1 |
) |
|
|
|
|
|
|
|
|
Cash flows from (used
in) financing activities: |
|
|
|
|
|
|
|
Borrowings under senior credit facilities |
|
17.8 |
|
|
|
— |
|
|
|
869.1 |
|
|
|
245.0 |
|
Repayments under senior credit facilities |
|
(117.5 |
) |
|
|
— |
|
|
|
(572.5 |
) |
|
|
(243.7 |
) |
Borrowings under trade receivables agreement |
|
97.0 |
|
|
|
— |
|
|
|
178.0 |
|
|
|
— |
|
Repayments under trade receivables agreement |
|
(113.0 |
) |
|
|
— |
|
|
|
(162.0 |
) |
|
|
— |
|
Net repayments under other financing arrangements |
|
— |
|
|
|
(0.1 |
) |
|
|
(0.4 |
) |
|
|
(0.8 |
) |
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 |
|
0.2 |
|
|
|
1.4 |
|
|
|
(1.3 |
) |
|
|
(3.5 |
) |
Repurchases of common stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(33.7 |
) |
Financing fees paid |
|
— |
|
|
|
— |
|
|
|
(1.3 |
) |
|
|
(1.9 |
) |
Net cash from (used in)
continuing operations |
|
(115.5 |
) |
|
|
1.3 |
|
|
|
309.6 |
|
|
|
(39.9 |
) |
Net cash from discontinued
operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
Net cash from (used in)
financing activities |
|
(115.5 |
) |
|
|
1.3 |
|
|
|
309.6 |
|
|
|
(38.9 |
) |
Change in cash and equivalents
due to changes in foreign currency exchange rates |
|
0.9 |
|
|
|
1.6 |
|
|
|
(0.1 |
) |
|
|
2.9 |
|
Net change in cash and
equivalents |
|
2.9 |
|
|
|
(30.2 |
) |
|
|
(52.2 |
) |
|
|
(238.9 |
) |
Consolidated cash and
equivalents, beginning of period |
|
102.0 |
|
|
|
187.3 |
|
|
|
157.1 |
|
|
|
396.0 |
|
Consolidated cash and
equivalents, end of period |
$ |
104.9 |
|
|
$ |
157.1 |
|
|
$ |
104.9 |
|
|
$ |
157.1 |
|
|
Twelve months ended |
|
December 31, 2023 |
|
December 31, 2022 |
Components of cash and
equivalents: |
|
|
|
Cash and equivalents |
$ |
99.4 |
|
$ |
147.8 |
Cash and equivalents included
in assets of DBT and Heat Transfer |
|
5.5 |
|
|
9.3 |
Total cash and
equivalents |
$ |
104.9 |
|
$ |
157.1 |
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
RESULTS OF REPORTABLE SEGMENTS |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
Twelve months ended |
|
|
|
|
|
|
December 31, 2023 |
|
December 31, 2022 |
|
Δ |
|
%/bps |
|
December 31, 2023 |
|
December 31, 2022 |
|
Δ |
|
%/bps |
HVAC reportable
segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
312.5 |
|
|
$ |
274.2 |
|
|
$ |
38.3 |
|
|
14.0 |
% |
|
$ |
1,122.3 |
|
|
$ |
913.8 |
|
|
$ |
208.5 |
|
|
22.8 |
% |
Gross profit |
|
|
120.3 |
|
|
|
89.8 |
|
|
|
30.5 |
|
|
|
|
|
409.5 |
|
|
|
277.8 |
|
|
|
131.7 |
|
|
|
Selling, general and
administrative expense |
|
|
47.1 |
|
|
|
36.3 |
|
|
|
10.8 |
|
|
|
|
|
175.1 |
|
|
|
142.3 |
|
|
|
32.8 |
|
|
|
Income |
|
$ |
73.2 |
|
|
$ |
53.5 |
|
|
$ |
19.7 |
|
|
36.8 |
% |
|
$ |
234.4 |
|
|
$ |
135.5 |
|
|
$ |
98.9 |
|
|
73.0 |
% |
as a percent of revenues |
|
|
23.4 |
% |
|
|
19.5 |
% |
|
|
|
390 bps |
|
|
20.9 |
% |
|
|
14.8 |
% |
|
|
|
610 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detection &
Measurement reportable segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
156.9 |
|
|
$ |
155.1 |
|
|
$ |
1.8 |
|
|
1.2 |
% |
|
$ |
618.9 |
|
|
$ |
547.1 |
|
|
$ |
71.8 |
|
|
13.1 |
% |
Gross profit |
|
|
67.6 |
|
|
|
72.4 |
|
|
|
(4.8 |
) |
|
|
|
|
264.1 |
|
|
|
247.2 |
|
|
|
16.9 |
|
|
|
Selling, general and
administrative expense |
|
|
38.0 |
|
|
|
35.4 |
|
|
|
2.6 |
|
|
|
|
|
145.3 |
|
|
|
133.1 |
|
|
|
12.2 |
|
|
|
Income |
|
$ |
29.6 |
|
|
$ |
37.0 |
|
|
$ |
(7.4 |
) |
|
(20.0 |
)% |
|
$ |
118.8 |
|
|
$ |
114.1 |
|
|
$ |
4.7 |
|
|
4.1 |
% |
as a percent of revenues |
|
|
18.9 |
% |
|
|
23.9 |
% |
|
|
|
-500 bps |
|
|
19.2 |
% |
|
|
20.9 |
% |
|
|
|
-170 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Revenues |
|
$ |
469.4 |
|
|
$ |
429.3 |
|
|
$ |
40.1 |
|
|
9.3 |
% |
|
$ |
1,741.2 |
|
|
$ |
1,460.9 |
|
|
$ |
280.3 |
|
|
19.2 |
% |
Consolidated Operating
Income (Loss) |
|
|
63.1 |
|
|
|
(24.9 |
) |
|
|
88.0 |
|
|
353.4 |
% |
|
|
221.9 |
|
|
|
51.0 |
|
|
|
170.9 |
|
|
335.1 |
% |
as a percent of revenues |
|
|
13.4 |
% |
|
(5.8)% |
|
|
|
1920 bps |
|
|
12.7 |
% |
|
|
3.5 |
% |
|
|
|
920 bps |
Consolidated Segment
Income |
|
|
102.8 |
|
|
|
90.5 |
|
|
|
12.3 |
|
|
13.6 |
% |
|
|
353.2 |
|
|
|
249.6 |
|
|
|
103.6 |
|
|
41.5 |
% |
as a percent of revenues |
|
|
21.9 |
% |
|
|
21.1 |
% |
|
|
|
80 bps |
|
|
20.3 |
% |
|
|
17.1 |
% |
|
|
|
320 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated operating income
(loss) |
|
$ |
63.1 |
|
|
$ |
(24.9 |
) |
|
$ |
88.0 |
|
|
|
|
$ |
221.9 |
|
|
$ |
51.0 |
|
|
$ |
170.9 |
|
|
|
Exclude: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expense |
|
|
14.2 |
|
|
|
18.4 |
|
|
|
(4.2 |
) |
|
|
|
|
58.4 |
|
|
|
68.6 |
|
|
|
(10.2 |
) |
|
|
Acquisition-related and other costs(1) |
|
|
0.8 |
|
|
|
0.8 |
|
|
|
— |
|
|
|
|
|
5.8 |
|
|
|
1.9 |
|
|
|
3.9 |
|
|
|
Long-term incentive compensation expense |
|
|
3.4 |
|
|
|
3.2 |
|
|
|
0.2 |
|
|
|
|
|
13.4 |
|
|
|
10.9 |
|
|
|
2.5 |
|
|
|
Amortization of acquired intangible assets |
|
|
11.5 |
|
|
|
5.4 |
|
|
|
6.1 |
|
|
|
|
|
43.9 |
|
|
|
28.5 |
|
|
|
15.4 |
|
|
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
13.4 |
|
|
|
(13.4 |
) |
|
|
|
|
— |
|
|
|
13.4 |
|
|
|
(13.4 |
) |
|
|
Special charges, net |
|
|
0.8 |
|
|
|
0.3 |
|
|
|
0.5 |
|
|
|
|
|
0.8 |
|
|
|
0.4 |
|
|
|
0.4 |
|
|
|
Other operating expense, net(2) |
|
|
9.0 |
|
|
|
73.9 |
|
|
|
(64.9 |
) |
|
|
|
|
9.0 |
|
|
|
74.9 |
|
|
|
(65.9 |
) |
|
|
Total segment
income |
|
$ |
102.8 |
|
|
$ |
90.5 |
|
|
$ |
12.3 |
|
|
13.6 |
% |
|
$ |
353.2 |
|
|
$ |
249.6 |
|
|
$ |
103.6 |
|
|
41.5 |
% |
as a percent of revenues |
|
|
21.9 |
% |
|
|
21.1 |
% |
|
|
|
80 bps |
|
|
20.3 |
% |
|
|
17.1 |
% |
|
|
|
320 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Represents certain acquisition-related costs incurred of $0.8
and $5.8 during the three and twelve months ended December 31,
2023, respectively, and $0.8 and $1.9 during the three and twelve
months ended December 31, 2022, respectively, including additional
“Cost of products sold” related to the step up of inventory (to
fair value) acquired in connection with the ASPEQ acquisition of
$0.0 and $3.6 during the three and twelve months ended December 31,
2023, respectively, and the ITL acquisition of $0.0 and $1.1 during
the three and twelve months ended December 31, 2022,
respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)For the three and twelve months ended December 31, 2023
represents a charge related to the resolution of a dispute with a
former representative at one of our Detection & Measurement
reportable segment businesses of $9.0. For the three and twelve
months ended December 31, 2022, represents (i) the loss of $73.9
related to the Asbestos Portfolio Sale, (ii) asbestos-related
charges of $0.0 and $2.3, respectively, partially offset by (iii) a
gain during the twelve months of $1.3 related to the revision of a
liability associated with contingent consideration on a recent
acquisition. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
CASH AND DEBT RECONCILIATION |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve monthsended |
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
Beginning cash and
equivalents |
|
$ |
157.1 |
|
|
|
|
|
|
|
|
|
Cash from continuing
operations |
|
|
243.8 |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(23.9 |
) |
|
|
|
|
|
|
|
|
Business acquisitions, net of
cash acquired |
|
|
(547.0 |
) |
|
|
|
|
|
|
|
|
Proceeds related to
company-owned life insurance policies, net |
|
|
0.7 |
|
|
|
|
|
|
|
|
|
Borrowings under senior credit
facilities |
|
|
869.1 |
|
|
|
|
|
|
|
|
|
Repayments under senior credit
facilities |
|
|
(572.5 |
) |
|
|
|
|
|
|
|
|
Borrowings under trade
receivables agreement |
|
|
178.0 |
|
|
|
|
|
|
|
|
|
Repayments under trade
receivables agreement |
|
|
(162.0 |
) |
|
|
|
|
|
|
|
|
Net repayments under other
financing arrangements |
|
|
(0.4 |
) |
|
|
|
|
|
|
|
|
Minimum withholdings paid on
behalf of employees for net share settlements, net of proceeds from
the exercise of employee stock options |
|
|
(1.3 |
) |
|
|
|
|
|
|
|
|
Financing fees paid |
|
|
(1.3 |
) |
|
|
|
|
|
|
|
|
Cash used in discontinued
operations |
|
|
(35.3 |
) |
|
|
|
|
|
|
|
|
Change in cash due to changes
in foreign currency exchange rates |
|
|
(0.1 |
) |
|
|
|
|
|
|
|
|
Ending cash and
equivalents |
|
$ |
104.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt at |
|
|
|
|
|
|
|
Debt at |
|
|
December 31, 2022 |
|
Borrowings |
|
Repayments |
|
Other |
|
December 31, 2023 |
Revolving loans |
|
$ |
— |
|
|
$ |
569.1 |
|
$ |
(569.1 |
) |
|
$ |
— |
|
|
$ |
— |
|
Term loans |
|
|
245.0 |
|
|
|
300.0 |
|
|
(3.4 |
) |
|
|
— |
|
|
|
541.6 |
|
Trade receivables financing
arrangement |
|
|
— |
|
|
|
178.0 |
|
|
(162.0 |
) |
|
|
— |
|
|
|
16.0 |
|
Other indebtedness |
|
|
2.5 |
|
|
|
0.3 |
|
|
(0.7 |
) |
|
|
0.3 |
|
|
|
2.4 |
|
Less: Deferred financing costs
associated with the term loans |
|
|
(0.7 |
) |
|
|
— |
|
|
— |
|
|
|
(1.0 |
) |
|
|
(1.7 |
) |
Totals |
|
$ |
246.8 |
|
|
$ |
1,047.4 |
|
$ |
(735.2 |
) |
|
$ |
(0.7 |
) |
|
$ |
558.3 |
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ORGANIC REVENUE |
HVAC AND DETECTION & MEASUREMENT REPORTABLE
SEGMENTS |
(Unaudited) |
|
|
|
|
|
|
|
Three months ended December 31, 2023 |
|
|
HVAC |
|
Detection &Measurement |
Net Revenue Growth |
|
14.0 |
% |
|
1.2 |
% |
|
|
|
|
|
Exclude: Foreign Currency |
|
0.3 |
% |
|
1.4 |
% |
|
|
|
|
|
Exclude: Acquisitions |
|
15.7 |
% |
|
— |
% |
|
|
|
|
|
Organic Revenue Decline |
|
(2.0)% |
|
(0.2)% |
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ORGANIC REVENUE |
HVAC AND DETECTION & MEASUREMENT REPORTABLE
SEGMENTS |
(Unaudited) |
|
|
|
|
|
|
|
Twelve months ended December 31, 2023 |
|
|
HVAC |
|
Detection &Measurement |
Net Revenue Growth |
|
22.8 |
% |
|
13.1 |
% |
|
|
|
|
|
Exclude: Foreign Currency |
|
(0.2)% |
|
0.3 |
% |
|
|
|
|
|
Exclude: Acquisitions |
|
10.8 |
% |
|
0.4 |
% |
|
|
|
|
|
Organic Revenue Growth |
|
12.2 |
% |
|
12.4 |
% |
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ADJUSTED OPERATING INCOME
(LOSS) |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Operating income (loss) |
|
$ |
63.1 |
|
|
$ |
(24.9 |
) |
|
$ |
221.9 |
|
|
$ |
51.0 |
|
|
|
|
|
|
|
|
|
|
Include - TSA Income(1) |
|
|
— |
|
|
|
0.5 |
|
|
|
0.3 |
|
|
|
2.9 |
|
|
|
|
|
|
|
|
|
|
Exclude: |
|
|
|
|
|
|
|
|
Acquisition-related and other costs(2) |
|
|
(1.6 |
) |
|
|
(3.5 |
) |
|
|
(13.6 |
) |
|
|
(16.7 |
) |
|
|
|
|
|
|
|
|
|
Other operating expense, net(3) |
|
|
(9.0 |
) |
|
|
(73.9 |
) |
|
|
(9.0 |
) |
|
|
(74.9 |
) |
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
(11.5 |
) |
|
|
(5.4 |
) |
|
|
(43.9 |
) |
|
|
(28.5 |
) |
|
|
|
|
|
|
|
|
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
(13.4 |
) |
|
|
— |
|
|
|
(13.4 |
) |
|
|
|
|
|
|
|
|
|
Adjusted operating income |
|
$ |
85.2 |
|
|
$ |
71.8 |
|
|
$ |
288.7 |
|
|
$ |
187.4 |
|
as a percent of revenues |
|
|
18.2 |
% |
|
|
16.7 |
% |
|
|
16.6 |
% |
|
|
12.8 |
% |
|
|
|
|
|
|
|
|
|
(1)Represents transition services income related to the Asbestos
Portfolio Sale for the twelve months ended December 31, 2023 and
the Transformer Solutions disposition for the three and twelve
months ended December 31, 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 and twelve months ended December 31, 2023,
represents (i) acquisition and strategic/transformation related
costs of $0.8 and $7.8, respectively, (ii) certain integration
costs of $0.8 and $2.2, respectively, and (iii) inventory step-up
charges of $0.0 and $3.6, respectively, related to the ASPEQ
acquisition. For the three and twelve months ended December 31,
2022, represents (i) acquisition and strategic/transformation
related costs of $3.3 and $15.6, respectively, inclusive of
“special charges” of $0.3, (ii) costs associated with our South
Africa business that could not be allocated to discontinued
operations for U.S. GAAP purposes of $0.2 and $0.8, respectively,
(iii) inventory step-up charges related to our ITL acquisition of
$0.0 and $1.1, respectively, and (iv) during the twelve months a
gain of $0.8 related to forfeitures of long-term incentive
compensation. |
|
|
|
|
|
|
|
|
|
(3)For the three and twelve months ended December 31, 2023
represents a charge related to the resolution of a dispute with a
former representative at one of our Detection & Measurement
reportable segment businesses of $9.0. For the three and twelve
months ended December 31, 2022, represents (i) the loss of $73.9
related to the Asbestos Portfolio Sale, (ii) asbestos-related
charges of $0.0 and $2.3, respectively, partially offset by (iii) a
gain during the twelve months of $1.3 related to the revision of a
liability associated with contingent consideration on a recent
acquisition. |
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - EARNINGS PER SHARE |
Three Months Ended December 31, 2023 |
(Unaudited; in millions, except per share
values) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Adjustments |
|
Adjusted |
Segment income |
$ |
102.8 |
|
|
$ |
— |
|
|
$ |
102.8 |
|
Corporate expense(1) |
|
(14.2 |
) |
|
|
0.8 |
|
|
|
(13.4 |
) |
Acquisition-related and other costs(2) |
|
(0.8 |
) |
|
|
0.8 |
|
|
|
— |
|
Long-term incentive compensation expense |
|
(3.4 |
) |
|
|
— |
|
|
|
(3.4 |
) |
Amortization of acquired intangible assets(3) |
|
(11.5 |
) |
|
|
11.5 |
|
|
|
— |
|
Special charges, net |
|
(0.8 |
) |
|
|
— |
|
|
|
(0.8 |
) |
Other operating expense, net(4) |
|
(9.0 |
) |
|
|
9.0 |
|
|
|
— |
|
Operating
income |
|
63.1 |
|
|
|
22.1 |
|
|
|
85.2 |
|
|
|
|
|
|
|
Other income (expense), net(5) |
|
(12.4 |
) |
|
|
12.5 |
|
|
|
0.1 |
|
Interest expense, net |
|
(9.0 |
) |
|
|
— |
|
|
|
(9.0 |
) |
Income from continuing
operations before income taxes |
|
41.7 |
|
|
|
34.6 |
|
|
|
76.3 |
|
Income tax provision(6) |
|
(10.1 |
) |
|
|
(7.5 |
) |
|
|
(17.6 |
) |
Income from continuing
operations |
|
31.6 |
|
|
|
27.1 |
|
|
|
58.7 |
|
|
|
|
|
|
|
Diluted shares
outstanding |
|
46.873 |
|
|
|
|
|
46.873 |
|
|
|
|
|
|
|
Earnings per share
from continuing operations |
$ |
0.67 |
|
|
|
|
$ |
1.25 |
|
|
|
|
|
|
|
(1)Adjustment represents the removal of acquisition and
strategic/transformation related costs of $0.8. |
|
(2)Adjustment represents the removal of integration costs of $0.7
and $0.1 within the HVAC and Detection & Measurement reportable
segments, respectively. |
|
(3)Adjustment represents the removal of amortization expense
associated with acquired intangible assets of $7.2 and $4.3 within
the HVAC and Detection & Measurement reportable segments,
respectively. |
|
|
|
|
|
|
(4)Adjustment
represents the removal of a charge related to the resolution of a
dispute with a former representative at one of our Detection &
Measurement reportable segment businesses of $9.0. |
|
|
|
|
|
|
(5)Adjustment
represents the removal of non-service pension and postretirement
charges of $12.5. |
|
|
|
|
|
|
(6)Adjustment
represents the tax impact of items (1) through (5) above and the
removal of certain discrete income tax items that are considered
non-recurring. |
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - EARNINGS PER SHARE |
Twelve Months Ended December 31, 2023 |
(Unaudited; in millions, except per share
values) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Adjustments |
|
Adjusted |
Segment income |
$ |
353.2 |
|
|
$ |
— |
|
|
$ |
353.2 |
|
Corporate expense(1) |
|
(58.4 |
) |
|
|
8.1 |
|
|
|
(50.3 |
) |
Acquisition-related and other costs(2) |
|
(5.8 |
) |
|
|
5.8 |
|
|
|
— |
|
Long-term incentive compensation expense |
|
(13.4 |
) |
|
|
— |
|
|
|
(13.4 |
) |
Amortization of acquired intangible assets(3) |
|
(43.9 |
) |
|
|
43.9 |
|
|
|
— |
|
Special charges, net |
|
(0.8 |
) |
|
|
— |
|
|
|
(0.8 |
) |
Other operating expense, net(4) |
|
(9.0 |
) |
|
|
9.0 |
|
|
|
— |
|
Operating
income |
|
221.9 |
|
|
|
66.8 |
|
|
|
288.7 |
|
|
|
|
|
|
|
Other income (expense), net(5) |
|
(10.1 |
) |
|
|
12.4 |
|
|
|
2.3 |
|
Interest expense, net |
|
(25.5 |
) |
|
|
— |
|
|
|
(25.5 |
) |
Income from continuing
operations before income taxes |
|
186.3 |
|
|
|
79.2 |
|
|
|
265.5 |
|
Income tax provision(6) |
|
(41.6 |
) |
|
|
(23.2 |
) |
|
|
(64.8 |
) |
Income from continuing
operations |
|
144.7 |
|
|
|
56.0 |
|
|
|
200.7 |
|
|
|
|
|
|
|
Diluted shares
outstanding |
|
46.612 |
|
|
|
|
|
46.612 |
|
|
|
|
|
|
|
Earnings per share
from continuing operations |
$ |
3.10 |
|
|
|
|
$ |
4.31 |
|
|
|
|
|
|
|
(1)Adjustment
represents the removal of acquisition and strategic/transformation
related expenses of $7.8 and a reclassification of transition
services income of $0.3 from “Other income (expense), net.” |
|
|
|
|
|
|
(2)Adjustment
represents the removal of (i) an inventory step-up charge of $3.6
related to the ASPEQ acquisition within the HVAC reportable segment
and (ii) integration costs of $1.7 and $0.5 within the HVAC and
Detection & Measurement reportable segments, respectively. |
|
|
|
|
|
|
(3)Adjustment
represents the removal of amortization expense associated with
acquired intangible assets of $26.7 and $17.2 within the HVAC and
Detection & Measurement reportable segments, respectively. |
|
|
|
|
|
|
(4)Adjustment
represents the removal of a charge related to the resolution of a
dispute with a former representative at one of our Detection &
Measurement reportable segment businesses of $9.0. |
|
|
|
|
|
|
(5)Adjustment
represents the removal of (i) non-service pension and
postretirement losses ($16.1) and (ii) the removal of a charge
related to the Asbestos Portfolio Sale of $0.2, partially offset by
(i) a gain on an equity security associated with a fair value
adjustment ($3.6) and (ii) the reclassification of income related
to a transition services agreement ($0.3) to "Corporate
expense." |
|
|
|
|
|
|
(6)Adjustment
primarily represents the tax impact of items (1) through (5) above
and the removal of certain discrete income tax items that are
considered non-recurring. |
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - EARNINGS PER SHARE |
Three Months Ended December 31, 2022 |
(Unaudited; in millions, except per share
values) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Adjustments |
|
Adjusted |
Segment income |
$ |
90.5 |
|
|
$ |
— |
|
|
$ |
90.5 |
|
Corporate expense(1) |
|
(18.4 |
) |
|
|
2.9 |
|
|
|
(15.5 |
) |
Acquisition-related and other costs(2) |
|
(0.8 |
) |
|
|
0.8 |
|
|
|
— |
|
Long-term incentive compensation expense |
|
(3.2 |
) |
|
|
— |
|
|
|
(3.2 |
) |
Amortization of acquired intangible assets(3) |
|
(5.4 |
) |
|
|
5.4 |
|
|
|
— |
|
Impairment of goodwill and intangible assets(4) |
|
(13.4 |
) |
|
|
13.4 |
|
|
|
— |
|
Special charges, net(5) |
|
(0.3 |
) |
|
|
0.3 |
|
|
|
— |
|
Other operating expense, net(6) |
|
(73.9 |
) |
|
|
73.9 |
|
|
|
— |
|
Operating income
(loss) |
|
(24.9 |
) |
|
|
96.7 |
|
|
|
71.8 |
|
|
|
|
|
|
|
Other income (expense), net(7) |
|
4.6 |
|
|
|
(7.7 |
) |
|
|
(3.1 |
) |
Interest expense, net |
|
(1.7 |
) |
|
|
— |
|
|
|
(1.7 |
) |
Income (loss) from
continuing operations before income taxes |
|
(22.0 |
) |
|
|
89.0 |
|
|
|
67.0 |
|
Income tax provision(8) |
|
(2.8 |
) |
|
|
(10.2 |
) |
|
|
(13.0 |
) |
Income (loss) from
continuing operations |
|
(24.8 |
) |
|
|
78.8 |
|
|
|
54.0 |
|
|
|
|
|
|
|
Diluted shares
outstanding |
|
45.236 |
|
|
|
|
|
46.311 |
|
|
|
|
|
|
|
Earnings (loss) per
share from continuing operations |
$ |
(0.55 |
) |
|
|
|
$ |
1.17 |
|
|
|
|
|
|
|
(1)Adjustment
represents the removal of acquisition and strategic/transformation
related expenses ($2.2), 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 ($0.5) from "Other income (expense),
net." |
|
|
|
|
|
|
(2)Adjustment
represents the removal of integration costs of $0.4 and $0.4 within
the HVAC and Detection & Measurement reportable segments,
respectively. |
|
|
|
|
|
|
(3)Adjustment
represents the removal of amortization expense associated with
acquired intangible assets of $1.2 and $4.2 within the HVAC and
Detection & Measurement reportable segments, respectively. |
|
|
|
|
|
|
(4)Adjustment
represents the removal of non-cash charges related to the
impairment of goodwill and intangible assets. |
|
|
|
|
|
|
(5)Adjustment
represents the removal of a non-cash asset write-down associated
with acquisition integration activities. |
|
|
|
|
|
|
(6)Adjustment
represents the removal of the loss related to the Asbestos
Portfolio Sale. |
|
|
|
|
|
|
(7)Adjustment
represents the removal of non-service pension and postretirement
gains ($7.2), and the reclassification of income related to a
transition services agreement ($0.5) to "Corporate expense." |
|
|
|
|
|
|
(8)Adjustment
represents the tax impact of items (1) through (7) above and the
removal of certain discrete income tax items that are considered
non-recurring. |
|
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - EARNINGS PER SHARE |
Twelve Months Ended December 31, 2022 |
(Unaudited; in millions, except per share
values) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Adjustments |
|
Adjusted |
Segment income |
$ |
249.6 |
|
|
$ |
— |
|
|
$ |
249.6 |
|
Corporate expense(1) |
|
(68.6 |
) |
|
|
18.2 |
|
|
|
(50.4 |
) |
Acquisition-related and other costs(2) |
|
(1.9 |
) |
|
|
1.9 |
|
|
|
— |
|
Long-term incentive compensation expense(3) |
|
(10.9 |
) |
|
|
(0.8 |
) |
|
|
(11.7 |
) |
Amortization of acquired intangible assets(4) |
|
(28.5 |
) |
|
|
28.5 |
|
|
|
— |
|
Impairment of goodwill and intangible assets(5) |
|
(13.4 |
) |
|
|
13.4 |
|
|
|
— |
|
Special charges, net(6) |
|
(0.4 |
) |
|
|
0.3 |
|
|
|
(0.1 |
) |
Other operating expense, net(7) |
|
(74.9 |
) |
|
|
74.9 |
|
|
|
— |
|
Operating
income |
|
51.0 |
|
|
|
136.4 |
|
|
|
187.4 |
|
|
|
|
|
|
|
Other income (expense), net(8) |
|
(15.2 |
) |
|
|
16.7 |
|
|
|
1.5 |
|
Interest expense, net |
|
(7.6 |
) |
|
|
— |
|
|
|
(7.6 |
) |
Loss on amendment/refinancing of senior credit agreement(9) |
|
(1.1 |
) |
|
|
1.1 |
|
|
|
— |
|
Income from continuing
operations before income taxes |
|
27.1 |
|
|
|
154.2 |
|
|
|
181.3 |
|
Income tax provision(10) |
|
(7.3 |
) |
|
|
(30.7 |
) |
|
|
(38.0 |
) |
Income from continuing
operations |
|
19.8 |
|
|
|
123.5 |
|
|
|
143.3 |
|
|
|
|
|
|
|
Diluted shares
outstanding |
|
46.221 |
|
|
|
|
|
46.221 |
|
|
|
|
|
|
|
Earnings per share
from continuing operations |
$ |
0.43 |
|
|
|
|
$ |
3.10 |
|
|
|
|
|
|
|
(1)Adjustment
represents the removal of acquisition and strategic/transformation
related expenses incurred during the period ($14.5), costs
associated with our South Africa business that could not be
allocated to discontinued operations for U.S. GAAP purposes ($0.8),
as well as a reclassification of transition services income ($2.9)
from "Other income (expense), net." |
|
|
|
|
|
|
(2)Adjustment
represents the removal of inventory step-up charges related to the
ITL acquisition of $1.1 within the Detection & Measurement
reportable segment and integration costs of $0.4 and $0.4 within
the HVAC and Detection & Measurement reportable segments,
respectively. |
|
|
|
|
|
|
(3)Adjustment
represents the removal of a gain of $0.8 related to long-term
incentive compensation forfeitures. |
|
|
|
|
|
|
(4)Adjustment
represents the removal of amortization expense associated with
acquired intangible assets of $11.5 and $17.0 within the HVAC and
Detection & Measurement reportable segments, respectively. |
|
|
|
|
|
|
(5)Adjustment
represents the removal of non-cash charges related to the
impairment of goodwill and intangible assets. |
|
|
|
|
|
|
(6)Adjustment
represents the removal of a non-cash asset write-down associated
with acquisition integration activities. |
|
|
|
|
|
|
(7)Adjustment
represents the removal of (i) the loss related to the Asbestos
Portfolio Sale ($73.9), (ii) a charge of ($2.3) related to
revisions of recorded liabilities for asbestos-related claims, and
(iii) a gain of ($1.3) related to a revision of the liability
associated with contingent consideration on a recent
acquisition. |
|
|
|
|
|
|
(8)Adjustment
represents the removal of (i) asbestos-related charges ($16.5),
(ii) a loss on an equity security associated with a fair value
adjustment ($3.0), and (iii) non-service pension and postretirement
losses ($0.1), partially offset by the reclassification of income
related to a transition services agreement ($2.9) to "Corporate
expense." |
|
|
|
|
|
|
(9)Adjustment
represents the removal of a non-cash charge and certain expenses
incurred in connection with an amendment to our senior credit
agreement. |
|
|
|
|
|
|
(10)Adjustment
primarily represents the tax impact of items (1) through (9) above
and the removal of certain discrete income tax items that are
considered non-recurring. |
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ADJUSTED EBITDA |
Three Months Ended December 31, 2023 and 2022 |
(Unaudited; in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
December 31, 2023 |
|
December 31, 2022 |
Net income (loss) |
|
$ |
31.5 |
|
|
$ |
(27.3 |
) |
|
|
|
|
|
Exclude: |
|
|
|
|
Income tax provision |
|
|
(10.1 |
) |
|
|
(2.8 |
) |
Interest expense, net |
|
|
(9.0 |
) |
|
|
(1.7 |
) |
Amortization expense(1) |
|
|
(11.6 |
) |
|
|
(5.5 |
) |
Depreciation expense |
|
|
(5.2 |
) |
|
|
(4.0 |
) |
Loss from discontinued operations, net of tax |
|
|
(0.1 |
) |
|
|
(2.5 |
) |
EBITDA |
|
|
67.5 |
|
|
|
(10.8 |
) |
|
|
|
|
|
Exclude: |
|
|
|
|
Acquisition and strategic/transformation related costs(2) |
|
|
(0.8 |
) |
|
|
(2.4 |
) |
Acquisition-related and other costs(3) |
|
|
(0.8 |
) |
|
|
(0.8 |
) |
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
(13.4 |
) |
Special charges, net(4) |
|
|
— |
|
|
|
(0.3 |
) |
Other operating expense, net(5) |
|
|
(9.0 |
) |
|
|
(73.9 |
) |
Non-service pension and postretirement adjustments |
|
|
(12.5 |
) |
|
|
7.2 |
|
Adjusted
EBITDA |
|
$ |
90.6 |
|
|
$ |
72.8 |
|
as a percent of revenues |
|
|
19.3 |
% |
|
|
17.0 |
% |
|
|
|
|
|
(1)Represents amortization expense associated with acquired
intangible assets recorded within “Intangible amortization” and
amortization of capitalized software costs recorded within “Cost of
products sold.” |
|
|
|
|
|
(2)For the three months ended December 31, 2023 and 2022,
adjustments represent the removal of acquisition and
strategic/transformation related costs of $0.8 and $2.2,
respectively and during the three months ended December 31, 2022
costs associated with our South Africa business that could not be
allocated to discontinued operations for U.S. GAAP purposes
($0.2). |
|
|
|
|
|
(3)For the three months ended December 31, 2023 adjustment
represents the removal of integration costs of $0.7 and $0.1 within
the HVAC and Detection & Measurement reportable segments,
respectively. For the three months ended December 31, 2022,
adjustment represents the removal of integration costs of $0.4 and
$0.4 within the HVAC and Detection & Measurement reportable
segments, respectively. |
|
|
|
|
|
(4)Adjustment represents the removal of a non-cash asset write-down
associated with acquisition integration activities. |
|
|
|
|
|
(5)For the three months ended December 31, 2023, adjustment
represents the removal of a charge related to the resolution of a
dispute with a former representative at one of our Detection &
Measurement reportable segment businesses of $9.0. For the three
months ended December 31, 2022, adjustment represents the removal
of the loss related to the Asbestos Portfolio Sale. |
|
|
|
|
|
SPX TECHNOLOGIES, INC. AND SUBSIDIARIES |
NON-GAAP RECONCILIATION - ADJUSTED EBITDA |
Twelve Months Ended December 31, 2023 and
2022 |
(Unaudited; in millions) |
|
|
|
|
|
|
|
Twelve months ended |
|
|
December 31, 2023 |
|
December 31, 2022 |
Net income |
|
$ |
89.9 |
|
|
$ |
0.2 |
|
|
|
|
|
|
Exclude: |
|
|
|
|
Income tax provision |
|
|
(41.6 |
) |
|
|
(7.3 |
) |
Interest expense, net |
|
|
(25.5 |
) |
|
|
(7.6 |
) |
Amortization expense(1) |
|
|
(44.0 |
) |
|
|
(28.6 |
) |
Depreciation expense |
|
|
(19.2 |
) |
|
|
(17.8 |
) |
Loss from discontinued operations, net of tax |
|
|
(54.8 |
) |
|
|
(19.6 |
) |
EBITDA |
|
|
275.0 |
|
|
|
81.1 |
|
|
|
|
|
|
Exclude: |
|
|
|
|
Acquisition and strategic/transformation related costs(2) |
|
|
(7.8 |
) |
|
|
(15.3 |
) |
Acquisition-related and other costs(3) |
|
|
(5.8 |
) |
|
|
(1.9 |
) |
Long-term incentive compensation expense forfeitures(4) |
|
|
— |
|
|
|
0.8 |
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
(13.4 |
) |
Special charges, net(5) |
|
|
— |
|
|
|
(0.3 |
) |
Other operating expense, net(6) |
|
|
(9.0 |
) |
|
|
(74.9 |
) |
Non-service pension and postretirement losses |
|
|
(16.1 |
) |
|
|
(0.1 |
) |
Asbestos-related charges |
|
|
(0.2 |
) |
|
|
(16.5 |
) |
Fair value adjustments on an equity security |
|
|
3.6 |
|
|
|
(3.0 |
) |
Loss on amendment/refinancing of senior credit agreement |
|
|
— |
|
|
|
(1.1 |
) |
Adjusted
EBITDA |
|
$ |
310.3 |
|
|
$ |
206.8 |
|
as a percent of revenues |
|
|
17.8 |
% |
|
|
14.2 |
% |
|
|
|
|
|
(1)Represents amortization expense associated with acquired
intangible assets recorded within “Intangible amortization” and
amortization of capitalized software costs recorded within “Cost of
products sold.” |
|
|
|
|
|
(2)For the twelve months ended December 31, 2023 and 2022,
adjustment represents the removal of acquisition and
strategic/transformation related costs of $7.8 and $14.5,
respectively and during the twelve months ended December 31, 2022,
costs associated with our South Africa business that could not be
allocated to discontinued operations for U.S. GAAP purposes
($0.8). |
|
|
|
|
|
(3)During the twelve months ended December 31, 2023, adjustment
represents the removal of (i) an inventory step-up charge of $3.6
related to the ASPEQ acquisition within the HVAC reportable segment
and (ii) integration costs of $1.7 and $0.5 within the HVAC and
Detection & Measurement reportable segments, respectively.
During the twelve months ended December 31, 2022, adjustment
represents the removal of (i) an inventory step-up charge related
to the ITL acquisition of $1.1 within the Detection &
Measurement reportable segment and (ii) integration costs of $0.4
and $0.4 within the HVAC and Detection & Measurement reportable
segments, respectively. |
|
|
|
|
|
(4)Adjustment represents the removal of a gain of $0.8 related to
long-term incentive compensation forfeitures. |
|
|
|
|
|
(5)Adjustment represents the removal of a non-cash asset write-down
associated with acquisition integration activities. |
|
|
|
|
|
(6)For the twelve months ended December 31, 2023, adjustment
represents the removal of a charge related to the resolution of a
dispute with a former representative at one of our Detection &
Measurement reportable segment businesses of $9.0. For the twelve
months ended December 31, 2022, adjustment represents the removal
of (i) the loss related to the Asbestos Portfolio Sale ($73.9),
(ii) a charge of ($2.3) related to revisions of recorded
liabilities for asbestos-related claims, and (iii) a gain of ($1.3)
related to a revision of the liability associated with contingent
consideration on a recent acquisition. |
|
|
|
|
|
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