Slide 1: Q2 2024 Earnings Presentation
Q2 2024 Earnings Presentation AUGUST 1, 2024 Q2 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, results of operations, product introductions, and financial projections, are forward-looking statements within the meaning of Section 27A of
Slide 3: Introductory Comments
Introductory Comments Gene Lowe, President & Chief Executive Officer AUGUST 1, 2024 Q2 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 3|
Slide 4: Executive Summary
Executive Summary ▪ Strong execution in Q2 » Substantial earnings growth and significant increase in margin for both segments ▪ Momentum continues » Robust demand in key markets and Continuous Improvement driving results ▪ Raising 2024 guidance » Adjusted EBITDA1 +35% y/y at midpoint; Adjusted EPS1
Slide 5: Q2 2024 Results Summary
Q2 2024 Results Summary ($ in millions) Q2 2024 ▪ Revenue growth of 18.4% Revenue » Strong growth organically1 and Adjusted EBITDA/ Margin1 from acquisitions ▪ Adjusted EBITDA1 growth of 45.0% » 400 bps of margin1 expansion » Increase driven by both segments 1 Adjusted results are non-GAAP measures.
Slide 6: Value Creation Framework
Value Creation Framework Strong Foundation Business System Target Model Engineered Niches Leading Positions Excellence Growth 15%+ Adj. EBITDA1 Growth Tech-Enabled Digital Strategic M&A Moats Continuous Improvement New Product Development 20%+ Adj. EBITDA1 Margin Talent Commercial Sustainable Excell
Slide 7: Q2 2024 Financial Review
Q2 2024 Financial Review Mark A. Carano, Chief Financial Officer AUGUST 1, 2024 Q2 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 7|
Slide 8: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q2 2023 Q2 2024 GAAP EPS from continuing operations $0.82 $0.96 Amortization $0.19 $0.27 Acquisition-related $0.11 $0.05 Non-service pension & other1 ($0.06) $0.14 Adj EPS from continuing operations $1.06 $1.42 1 Q2 2024 includes the removal of a charge for the resolution
Slide 9: Q2 2024 Results
Q2 2024 Results ($ in millions) Q2 Revenue: Q2 2024 ▪ 18.4% year-over-year increase: Revenue » 9.0% organic1 increase driven by HVAC Consolidated Segment Income / Margin1 » 9.5% acquisition impact (within HVAC) » -0.1% currency impact Q2 Consolidated Segment Income / Margin1: ▪ Both HVAC and D&M dro
Slide 10: HVAC Q2 2024 Results
HVAC Q2 2024 Results ($ in millions) Q2 Revenue: Q2 2024 ▪ 32.5% year-over-year increase: Revenue » 17.7% organic1 increase due to higher Cooling sales Segment Income / Margin » 15.0% acquisition impact (ASPEQ and Ingénia) » -0.2% currency impact Q2 Segment Income / Margin: ▪ Cooling was key driver
Slide 11: Detection & Measurement Q2 2024 Results
Detection & Measurement Q2 2024 Results ($ in millions) Q2 Revenue: Q2 2024 ▪ -6.2% year-over-year decrease: Revenue » -6.2% organic1 decrease due primarily to project timing Segment Income / Margin » Negligible currency impact Q2 Segment Income / Margin: ▪ More favorable mix and continuous improvem
Slide 12: Financial Position & Guidance
Financial Position & Guidance Mark A. Carano, Chief Financial Officer AUGUST 1, 2024 Q2 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 12 |
Slide 13: Financial Position Update
Financial Position Update ($ in millions) Q1 2024 Q2 2024 Q1 2024 Q2 2024 2.61 Short-term debt $317 $256 2.11 Current maturities of long-term debt 21 24 1.61 Long-term debt 517 510 1.11 2.3x Total Debt $855 $790 2.0x 2.0x 1.6x 2 Less: Cash on hand (106) (133) 0.61 Net Debt $749 $657 0.11 Gross Lever
Slide 14: 2024 Guidance Update
2024 Guidance1 Update Detection & Total SPX HVAC Measurement Revenue $1.970-$2.020B $1,365-$1,405m $605-$615m Prior $1.965-$2.025B $1,360-$1,400m $605-$625m Segment Income Margin1 22.3%-23.3% 23.00%-24.00% 20.75%-21.75% Prior 21.6%-22.6% 22.25%-23.25% 20.0%-21.0% Adj. EBITDA1 $410-$430m Prior $390-$
Slide 15: End Market Review & Closing Comments
End Market Review & Closing Comments Gene Lowe, President & Chief Executive Officer AUGUST 1, 2024 Q2 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 15 |
Slide 16: Market Commentary
Market Commentary Cooling Heating Project Oriented Run-Rate ▪ Strong demand trends ▪ Stable demand ▪ Overall project demand ▪ Flattish global demand continue healthy with regional variation ▪ Early traction on climate- ▪ Broad drivers of strength conscious solutions ▪ Infrastructure spending on hori
Slide 17: Executive Summary
Executive Summary ▪ Strong Q2 results ▪ Robust demand and operating momentum ▪ Updated guidance implies 35% Adjusted EBITDA1 growth at midpoint ▪ Attractive acquisition pipeline 1 Reconciliations of non-GAAP guidance measures to US GAAP financial measures are not practicable and accordingly are not
Slide 18: Appendix
Appendix AUGUST 1, 2024 Q2 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 19 |
Slide 19: Modeling Considerations – Full-Year 2024
Modeling Considerations – Full-Year 2024 Metric Considerations Corporate expense $48.0-52.0m Long-term incentive comp $13.5-15.5m Restructuring costs $0.5-1.5m Interest cost $43.0-45.5m Other income/(expense), and Non-service pension benefit/(expense) $1.5-3.0m Tax rate 24.0%-26.0% Capex ~$40m Cash
Slide 20: GAAP Reconciliation Results by Quarter
GAAP Reconciliation Results by Quarter ($ in millions) 2023 2024 Q1 Q2 Q3 Q4 FY Q1 Q2 YTD 1 Consolidated segment income $ 74.4 $ 84.4 $ 91.6 $ 102.8 $ 353.2 $ 99.8 $ 117.6 $ 217.4 Corporate expense (14.6) (16.6) (13.0) (14.2) (58.4) (13.9) (12.0) (25.9) Acquisition-related and other costs (0.6) (1.5
Slide 21: Segment Results
Segment Results ($ in millions) 2023 2024 HVAC Q1 Q2 Q3 Q4 FY Q1 Q2 YTD Revenue $251.6 $269.0 $289.2 $312.5 $1,122.3 $302.4 $356.5 $658.9 Segment income $47.7 $55.2 $58.3 $73.2 $234.4 $68.4 $83.7 $152.1 19% 21% 20% 23% 21% 23% 23% 23% Detection and 2023 2024 Measurement Q1 Q2 Q3 Q4 FY Q1 Q2 YTD Reve
Slide 22: Q2 2024 Revenue by Major product lines
Q2 2024 Revenue by Major product lines ($ in millions) Three months ended June 29, 2024 Detection and Reportable Segments HVAC Measurement Total Major product lines Package and process cooling equipment and services, and engineered air movement solutions $ 244.6 $ — $ 244.6 Boilers, electrical heati
Slide 23: Q2 2023 Revenue by Major product lines
Q2 2023 Revenue by Major product lines ($ in millions) Three months ended July 1, 2023 Detection and Reportable Segments HVAC Measurement Total Major product lines Package and process cooling equipment and services, and engineered air movement solutions $ 173.3 $ — $ 173.3 Boilers, electrical heatin
Slide 24: Q2 2024 U.S. GAAP to Adjusted EPS Reconciliation
Q2 2024 U.S. GAAP to Adjusted EPS Reconciliation ($ in millions, except per share) GAAP Adjustments Adjusted Segment income $ 117.6 $ — $ 117.6 Corporate expense (1) (12.0) 0.7 (11.3) Acquisition-related costs (2) (2.3) 2.3 — Long-term incentive compensation expense (3.7) — (3.7) Amortization of int
Slide 25: Q2 2023 U.S. GAAP to Adjusted EPS Reconciliation
Q2 2023 U.S. GAAP to Adjusted EPS Reconciliation ($ in millions, except per share) GAAP Adjustments Adjusted Segment income $ 84.4 $ — $ 84.4 Corporate expense (1) (16.6) 5.1 (11.5) Acquisition-related costs (2) (1.5) 1.5 — Long-term incentive compensation expense (3.5) — (3.5) Amortization of intan
Slide 26: U.S. GAAP to Adjusted Operating Income Reconciliation
U.S. GAAP to Adjusted Operating Income Reconciliation ($ in millions) Three months ended Six months ended June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023 Operating income $ 74.6 $ 51.3 $ 139.2 $ 101.1 Include - TSA Income (1) — 0.1 — 0.2 Exclude: Acquisition-related and other costs (2) (3.0) (
Slide 27: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) Three months ended June 29, 2024 July 1, 2023 Net income $ 44.2 $ 36.0 Exclude: Income tax provision (15.2) (7.8) Interest expense, net (12.5) (5.2) Amortization expense (1) (16.8) (11.5) Depreciation expense (6.6) (4.5) Loss from discontinued operation
Slide 28: Q2 2024 Non-GAAP Reconciliation – Organic Revenue
Q2 2024 Non-GAAP Reconciliation – Organic Revenue Three months ended June 29, 2024 Detection & HVAC Measurement Consolidated Net Revenue Growth (Decline) 32.5 % (6.2) % 18.4 % Exclude: Foreign Currency (0.2) % - % (0.1) % Exclude: Acquisitions 15.0 % - % 9.5 % Organic Revenue Growth (Decline) 17.7 %
Slide 29: Q2 2024 Adjusted Free Cash Flow Reconciliation
Q2 2024 Adjusted Free Cash Flow Reconciliation ($ in millions) Q2 2024 Operating cash flow from continuing operations $ 58.7 Capital expenditures (10.4) Free cash flow from continuing operations 48.3 Adjustments 1 9.6 Adjusted free cash flow from continuing operations $ 57.9 (1)Adjustments represent