Slide 1: Q3 2015 Earnings Presentation
Q3 2015 Earnings Presentation November 4, 2015
Slide 2: Forward-looking statements and non-GAAP disclosure
Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, results of operations and financial projections, are forward-looking statements and are thus prospective. These forward-looking statements are subject to risks,
Slide 3: Introductory Comments
Introductory Comments Gene Lowe November 4, 2015
Slide 4: SPX Corporation - Post Spin
SPX Corporation - Post Spin Spin-off Completed Completed spin-off of SPX FLOW, Inc. on September 26th FLOW business now reported as a discontinued operation in our GAAP financials New Segment reporting structure: HVAC, Detection & Measurement and Power Several items affect comparability of G
Slide 5: Q3 2015 Results - Core
Q3 2015 Results - Core Q3 2015 Results ($ millions) Revenue Operating Income Segment Income Margin Operating Income Margin Solid performance in HVAC Segment and transformer business (within Power $462 Segment) $411 Detection & Measurement delivered 8.3% 8.2% $21 solid profitability; timing of ce
Slide 6: Value Creation in Core Businesses
Value Creation in Core Businesses Grow HVAC platform: Grow Detection & Measurement platform: Measurement New product development Continue to upgrade installed base Detection & HVAC New product launches in 2015-2016 Channel development Expand vertically and geographically Geographic expan
Slide 7: Value Creation - Core Focus
Value Creation - Core Focus Solid performance Healthy frontlog and new Transformers margin expansion product development successes on track Continued acceptance of new support growth expectations products Executing planned 2015 Some shift out to Q4 and 2016 restructuring actions and Pu
Slide 8: South African Projects Update – Q3 2015
South African Projects Update – Q3 2015 First unit of Medupi power station goes on line Addition of new business leader overseeing South Africa Challenges in schedule and execution create strong headwind Committed to contract obligations and de-risking project Recorded charge of $95 millio
Slide 9: Q3 Financial Review
Q3 Financial Review Scott Sproule November 4, 2015
Slide 10: Q3 2015 Pro Forma Results
Q3 2015 Pro Forma Results Q3 2015 Pro Forma Analysis ($ millions) GAAP Adjustments Core Commentary Total Revenues $374.1 $36.4 $410.5 Excludes SA Projects, inclusive of Q3 charge Segment Income ($64.7) $98.2 $33.5 Corporate expense ($27.6) $18.4 ($9.2) Estimated stand-alone costs Pension and postret
Slide 11: Consolidated Q3 Core Results
Consolidated Q3 Core Results Q3 Year-over-Year Analysis ($ millions) Q3 Revenue: Revenue (11.0%) year-over-year decline: Segment Income Margin (3.6%) currency impact (7.4%) organic decline due to lower Power segment sales $462 partially offset by increased HVAC sales $411 Q3 Segment Income and
Slide 12: HVAC Q3 Results
HVAC Q3 Results Q3 Year-over-Year Analysis ($ millions) Q3 Revenue: Revenue Segment Income Margin +3.9% year-over-year growth: (0.7%) currency impact +4.6% organic growth due to an increase in sales of $143 cooling products with better than average margins $137 16.5% Q3 Segment Income and Marg
Slide 13: Detection & Measurement Q3 Results
Detection & Measurement Q3 Results Q3 Year-over-Year Analysis ($ millions) Q3 Revenue: Revenue Segment Income Margin (2.4%) year-over-year decline: (2.4%) currency impact Flat organically due to a moderate increase in sales of $57 portable locators of cable and pipes and fare collection $56 pr
Slide 14: Base Power Q3 Results
Base Power* Q3 Results Q3 Year-over-Year Analysis ($ millions) Q3 Revenue: Revenue (20.6%) year-over-year decline: Segment Income Margin (5.4%) currency impact (15.2%) organic decline due primarily to lower sales of $267 power generation equipment $212 Q3 Segment Income and Margin: 3.6% ($8m
Slide 15: South African Projects Q3 Update
South African Projects Q3 Update Q3 Charge Details & Impact $ in millions Q3’14 Q3’15 Comments $95 million charge (~$71 million, net of minority interest) primarily relates to revised estimates of Charge reduces 3Q’15 Revenue $28 ($36) revenue and costs revenues by ~$57m Revised estimates due to
Slide 16: Financial Position & Modeling Targets
Financial Position & Modeling Targets Scott Sproule November 4, 2015
Slide 17: Financial Position
Financial Position Capital Structure Update ($ millions) Q3'15 Q3 ending cash of $83 million; debt of $422 million Short-term debt $ 70 Q3 gross leverage* at 2.9x Current maturities of long-term debt 5 Long-term debt 347 Q3 net leverage* at 2.7x Gross Debt $ 422 New credit facility: Less: Ca
Slide 18: Modeling Targets - Update
Modeling Targets - Update Modeling Targets Bridge Segment Segment $ millions Revenues Income Margin % EBITDA Commentary Fiscal Day (Sept 2nd) Analysts’ $1,840 $128 7.0% $141* Includes South African projects Core (Sept 2nd) $1,765 $158 9.0% $164 Ex-South African projects Change in Core Midpoint ~($50
Slide 19: Executive Summary
Executive Summary Gene Lowe November 4, 2015
Slide 20: Executive Summary
Executive Summary Key Objectives Value Creation in Core Business 1) Create value in core business: HVAC Detection & Measurement — Targeting ~$180-200m in CORE EBITDA*in 3 years Growth platform Growth platform $180-200m 2) Manage South African projects CORE EBITDA* In 3 years Reduce complexity, 3) Di
Slide 21: Questions
Questions November 4, 2015
Slide 22: Appendix
Appendix November 4, 2015
Slide 23: Segment Income Reconciliation – GAAP and Pro Forma
Segment Income Reconciliation – GAAP and Pro Forma ($ millions) Q3 2015 Q3 2014 GAAP SA Projects Core GAAP SA Projects Core Revenue HVAC 142.7 142.7 137.4 137.4 D&M 55.9 55.9 57.3 57.3 Power 175.5 36.4 211.9 294.9 (27.9) 267.0 Total SPX 374.1 36.4 410.5 489.6 (27.9) 461.7 Segment Income HVAC 23.5 23
Slide 24: Core Operating Income Reconciliation
Core Operating Income Reconciliation Core Operating Income Reconciliation ($ millions) Q3 2015 Q3 2014 YTD 2015 YTD 2014 Operating Loss $ (113.6) $ (2.1) $ (166.9) $ (62.5) Exclude: South African projects 98.2 0.3 114.9 6.3 Certain corporate expenses (1) 20.9 24.5 76.2 85.1 Spin-related costs (2) 2.
Slide 25: Debt Reconciliation
Debt Reconciliation Debt Reconciliation as of 9/26/2015 ($ millions) 9/26/2015 Short-term debt $ 70 Current maturities of long-term debt 5 Long-term debt 347 Gross Debt $ 422 Less: Purchase card program and extended A/P programs (20) Adjusted Gross Debt $ 403 Less: Cash in excess of $50 (33) Adjuste
Slide 26: Consolidated EBITDA Reconciliation
Consolidated EBITDA Reconciliation Q4 '14 to ($ mi l l i ons ) Q2 '15* Q3 2015 LTM Net Income ($105) Income tax provision 6 Net interest expense 6 Income before interest and taxes ($93) Depreciation and amortization expense, including intangibles 10 EBITDA ($83) Adjustments: Non-cash compensation ex
Slide 27: Organic Revenue Reconciliation
Organic Revenue Reconciliation Net Revenue South African Core Revenue Foreign Core Organic Revenue Growth (Decline) Projects Growth (Decline) Currency Growth (Decline) HVAC 3.9 % - % 3.9 % (0.7) % 4.6 % Detection and Measurement (2.4) % - % (2.4) % - % (2.4) % Power (40.5) % (19.9) % (20.6) % (5.4)
Slide 28: Core Segment Income Phasing
Core Segment Income Phasing % of Segment Income per Quarter Key Q4 2015 segment income drivers: 42% 38% Seasonality of personal comfort heating and package cooling businesses 23% 22% 24% 23% Increase in sales of communication technologies and fare collection systems 15% 13% Restructuring savin
Slide 29: Core Business Modeling Targets - Ranges
Core Business Modeling Targets - Ranges 2015 Modeling Target Ranges FjjjjjFiscal $ millions, Segment Segment except per share Revenues Income Margin % EBITDA Core - Midpoint $1,715 $148 8.6% $154 Core – High Case $1,730 $153 9.0% $159 Core – Low Case $1,700 $143 8.3% $149 Note: Unless otherwise indi