Slide 1: Q1 2021 Earnings Presentation
Q1 2021 Earnings Presentation May 6, 2021 SPX Corporation 2019 Investor Event - New York
Slide 2: Forward-looking statements
Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, results of operations, products introductions, and financial projections, are forward-looking statements within the meaning of Section 27A of the Securities Act
Slide 3: Introductory Comments
Introductory Comments Gene Lowe
Slide 4: Executive Summary – Q1 2021 Results
Executive Summary – Q1 2021 Results Solid start to 2021 Strong performance in HVAC and D&M Continuing to execute on growth strategy Further building out AtoN platform Updating guidance for Sealite acquisition Well-Positioned to Continue Value Creation Journey May 6, 2021 4
Slide 5: Q1 2021 Results Summary
Q1 2021 Results Summary ($ millions) Q1 2021 Strong Q1 revenue increase Both organic and acquisitions contributed significantly Operating Income increased ~8% 10.7% 10.6% Overall favorable segment performance $39m $42m On Track for Double Digit Earnings Growth Note: Adjusted results are non-
Slide 6: Value Creation Framework
Value Creation Framework Organic Growth SPX Business System • New products • Policy deployment • Channel expansion • Operational excellence • Adjacent markets • Due diligence/integration Inorganic Growth Culture & Values • Focus in HVAC and D&M • Integrity • Significant capital to deploy • Results/a
Slide 7: Building Strategic Platforms – Aids to Navigation (AtoN)
Building Strategic Platforms – Aids to Navigation (AtoN) Acquired Feb 2019 Acquired April Acquired 2021 April 2021 Legacy Business ~$40-50m* ~25-30m* ~$30-40m* ~30-40m* Flash Technology Sabik Marine Sealite/Avlite Terrestrial Obstruction Marine Obstruction Lighting Airfield Ground and Lighting Marin
Slide 8: Building the Products & People that Build the World
Building the Products & People that Build the World …In What We Make… Our products enable E Drive energy efficient HVAC solutions Keep water and gas lines safe and clean Recycle heat exchange media Issue annual sustainability report (GRI aligned) Lower Clean Connectivity Clean Safety Emissio
Slide 9: Q1 Financial Review
Q1 Financial Review Jamie Harris
Slide 10: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q1 2020 Q1 2021 GAAP EPS from continuing operations $0.49 $0.60 Other segment (South Africa) $0.09 $0.10 Acquisition-related $0.01 $0.02 Non-service pension items & other $(0.01) $(0.11) Amortization $0.04 $0.07 Adj EPS from continuing operations $0.62 $0.68 Q1 2021 Adjus
Slide 11: Adjusted Q1 2021 Results
Adjusted Q1 2021 Results ($ millions) Q1 Adjusted Results: Q1 2021 8.9% year-over-year increase in Adjusted Revenue: 5.0% organic* impact due to higher volumes in HVAC and D&M 3.2% acquisition impact (ULC Robotics and Sensors & Software) 0.7% currency impact Q1 Adjusted Segment Income and Ma
Slide 12: Summary Q1 2021 Adjusted Segment Results
Summary Q1 2021 Adjusted Segment Results Q1 2021 Y/Y % Y/Y Change Change in Adjusted Segment in Revenue Segment Margin* HVAC 23.6% 360 Bps Detection & Measurement 21.4% (30) Bps Engineered Solutions (9.8%) (440) Bps Total Adjusted SPX 8.9% 10 Bps Note: Adjusted results are non-GAAP financial measure
Slide 13: HVAC Q1 2021 Results
HVAC Q1 2021 Results ($ millions) Q1 Revenue: Q1 2021 23.6% year-over-year increase: 22.9% organic* due to higher Cooling and Heating volumes and price 0.7% currency impact Q1 Adjusted Segment Income and Margin: $9.0m increase in Adjusted Segment Income* 360 basis points of margin increase
Slide 14: Detection & Measurement Q1 2021 Results
Detection & Measurement Q1 2021 Results ($ millions) Q1 Revenue: Q1 2021 21.4% year-over-year increase: 6.7% organic increase* due to significant rise in Location & Inspection and CommTech volumes 12.9% acquisition impact (ULC Robotics and Sensors & Software) 1.8% currency impact Q1 Adjusted
Slide 15: Engineered Solutions Q1 2021 Results
Engineered Solutions Q1 2021 Results ($ millions) Q1 2021 Q1 Revenue: 9.8% year-over-year decrease: Lower project volumes in Process Cooling Q1 Segment Income and Margin: $7.9m decrease in Segment Income 440 basis points of margin decrease Lower volumes of projects in Process Cooling; and,
Slide 16: Financial Position and Liquidity Review
Financial Position and Liquidity Review Jamie Harris
Slide 17: Financial Position - Capital Structure & Liquidity Update
Financial Position - Capital Structure & Liquidity Update Pro Forma with ($millions) Q4 2020 Q1 2021 Sealite 2.2x Short-term debt $101 $100 1.7x Current maturities of long-term debt 7 9 Long-term debt 304 283 2.0x 1.9x Total Debt $412 $392 1.7x 1.4x Less: Cash on hand (68) (107) Net Debt $344 $285 Q
Slide 18: 2021 Guidance (Changes Underlined)
2021 Guidance (Changes Underlined) Revenue Segment Income Margin Growth of Mid-to-High Single Digits % HVAC Modest increase (prior Low-to-Mid Single Digits %) Growth of High Teens to low 20s %, Detection & Modest decline including the effect of 2020-21 Measurement (prior Approximately flat)
Slide 19: End Market Overview and Closing Remarks
End Market Overview and Closing Remarks Gene Lowe
Slide 20: Market Commentary
Market Commentary Market Comments Cooling: Non-residential activity showing select signs of improvement HVAC Heating: strong recent demand trends; weather influenced seasonal demand Detection & Location & Inspection demand seeing momentum Measurement Healthy frontlog of projects; delivery ti
Slide 21: Well Positioned for Infrastructure Spending
Well Positioned for Infrastructure Spending Water & Wastewater General Construction (heavy civil, housing) Public Transit Grid Modernization and Renewables (wind) Telecom (5G), Airports, Ports Institutional Construction (K-12, gov’t, healthcare) Infrastructure-centric R&D May 6, 2021 2
Slide 22: Executive Summary
Executive Summary Solid start to year Executing on growth strategy (Sealite acquisition) Modestly improving market conditions Multiple points of leverage to infrastructure Well-Positioned to Continue Value Creation Journey in 2021+ May 6, 2021 22
Slide 23: Questions
SPX4 Questions
Slide 24: Appendix
SPX4 Appendix
Slide 25: Modeling Considerations – Full Year 2021
Modeling Considerations – Full Year 2021 Metric Considerations Corporate Expense $48-50m Long-term incentive comp ~$14m Restructuring costs $1-2m Interest cost $13-14m Equity earnings in JV, Other income/(expense), $3-5m and Non-service pension benefit/(expense) Tax rate ~21-23% Capex ~$20m Cash cos
Slide 26: 2021 Adjusted EPS Guidance - Key Drivers
2021 Adjusted EPS Guidance - Key Drivers • Favorable economic policy/infrastructure stimulus $3.26 • Stronger-than-normal seasonal heating demand • Accelerating non-residential activity • Moderating input cost trends • Accelerated project-related sales $3.16 Base Case • Weaker-than normal seasonal h
Slide 27: Adjusted Segment Income Phasing and Reconciliations
Adjusted Segment Income Phasing and Reconciliations ($ millions) Q1 Q2 Q3 Q4 2020 GAAP 46.8 47.4 44.4 65.1 203.7 Exclude "Other" (4.3) (4.4) (5.3) (5.3) (19.3) 34% Exclude: Acquisition 32% related costs (0.1) - - (1.2) (1.3) Exclude: Intangible amortization (2.6) (2.4) (3.3) (5.7) (14.0) 24% 23% Adj
Slide 28: Q1 2021 U.S. GAAP to Adjusted EPS Reconciliation
Q1 2021 U.S. GAAP to Adjusted EPS Reconciliation ($ millions) GAAP Adjustments Adjusted (1) Segment income $ 49.6 $ 9.3 $ 58.9 (2) Corporate expense (14.2) 0.7 (13.5) Long-term incentive compensation expense (3.0) - (3.0) (3) Special charges, net (0.7) 0.5 (0.2) Operating income 31.7 10.5 42.2 Other
Slide 29: Q1 2020 U.S. GAAP to Adjusted EPS Reconciliation
Q1 2020 U.S. GAAP to Adjusted EPS Reconciliation ($ millions) GAAP Adjustments Adjusted (1) Segment income $ 46.8 $ 7.0 $ 53.8 (2) Corporate expense (11.1) 0.1 (11.0) Long-term incentive compensation expense (3.5) - (3.5) (3) Special charges, net (0.3) 0.2 (0.1) Other operating income (4) 0.4 (0.4)
Slide 30: Q1 2021 U.S. GAAP to Adjusted Operating Income Reconciliation
Q1 2021 U.S. GAAP to Adjusted Operating Income Reconciliation ($ millions) (1) Represents the removal of the financial results of our South Africa business, inclusive of "special charges" of $0.5 and $0.2 during the three months ended April 3, 2021 and March 28, 2020, respectively. (2) Represents ac
Slide 31: Q1 2021 Non-GAAP Reconciliation - Organic Revenue
Q1 2021 Non-GAAP Reconciliation - Organic Revenue Three months ended April 3, 2021 Detection & HVAC Measurement Engineered Solutions SPX Corporation Net Revenue Growth (Decline) 23.6 % 21.4 % (9.8) % 8.9 % Exclude: Foreign Currency 0.7 % 1.8 % -% 0.7 % Exclude: Acquisitions -% 12.9 % -% 3.2 % Organi
Slide 32: Q1 2021 and 2020 U.S. GAAP to Adjusted Revenue and Adjusted Segment Income Reconciliation
Q1 2021 and 2020 U.S. GAAP to Adjusted Revenue and Adjusted Segment Income Reconciliation ($ millions) CONSOLIDATED SPX: Three months ended April 3, 2021 March 28, 2020 Consolidated revenue $ 398.5 $ 367.4 Exclude: "Other" operating segment (1) 0.7 2.1 Adjusted consolidated revenue $ 397.8 $ 365.3 T
Slide 33: Q1 2021 and 2020 U.S. GAAP to Adjusted Segment Income Reconciliations
Q1 2021 and 2020 U.S. GAAP to Adjusted Segment Income Reconciliations ($ millions) HVAC REPORTABLE SEGMENT: Three months ended April 3, 2021 March 28, 2020 HVAC segment income $ 24.2 $ 15.0 Exclude: Acquisition related costs (1) - (0.1) (2) Exclude: Amortization expense (0.7) (0.8) HVAC adjusted seg
Slide 34: Q1 2021 Debt Reconciliation
Q1 2021 Debt Reconciliation ($ millions) Q 1 2021 Short-term debt $ 100.0 Current maturities of long-term debt 8.9 Long-term debt 282.6 Gross debt 391.5 plus: adjustment associated with acquisitions (1) 108.7 Adjusted gross debt 500.2 less: cash and equivalents (2) (106.3) Adjusted net debt $ 393.9
Slide 35: Q1 2021 Consolidated Adjusted EBITDA Reconciliation
Q1 2021 Consolidated Adjusted EBITDA* Reconciliation Last 12 ($ millions) Months Net Income attributable to SPX Corporation common shareholders $ 101.3 Income tax provision 16.8 Interest expense 17.9 Income before interest and taxes 136.0 Depreciation and amortization 43.6 EBITDA 179.6 Adjustments:
Slide 36: Q1 2021 Adjusted Free Cash Flow Reconciliation
Q1 2021 Adjusted Free Cash Flow Reconciliation ($ millions) Q 1 2021 Operating cash flow from continuing operations $ 63.7 Capital expenditures (2.6) Free cash flow from continuing operations 61.1 Adjustments* (9.7) Adjusted free cash flow from continuing operations $ 51.4 * Adjustments align with o