Slide 1: Q3 2021 Earnings Presentation
Q3 2021 Earnings Presentation November 3, 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 – Q3 2021
Executive Summary – Q3 2021 Transformer Solution sale closed 10/1 Well-positioned to execute on growth initiatives Strong closing balance sheet / pipeline of acquisition targets Very strong demand in Q3 Organic orders* up 36% y/y Organic backlog* up 48% y/y Supply chain challenges Ac
Slide 5: Q3 2021 Results Summary
Q3 2021 Results Summary ($ millions) Q3 2021 Year-to-Date Solid revenue growth (6.6%) Acquisitions in Detection & Measurement were key contributor Adjusted operating income / margin declined y/y Supply chain issues constrained production Partially offset by cost controls and efficiency ini
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 • Strategic platforms • Integrity • Significant capital to deploy • Results/acc
Slide 7: Q3 Financial Review
Q3 Financial Review Jamie Harris
Slide 8: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q3 2020 Q3 2021 GAAP EPS from continuing operations $0.34 $0.17 Other segment (South Africa) $0.07 $0.11 Acquisition-related $0.01 $0.03 Non-service pension items & other $0.00 $0.01 Amortization $0.06 $0.09 Adj EPS from continuing operations $0.48 $0.41 Q3 2021 Adjusted
Slide 9: Q3 2021 Results Summary
Q3 2021 Results Summary ($ millions) Q3 Adjusted Revenue: Q3 2021 Year-to-Date 6.6% year-over-year increase: 0.7% organic* increase 5.1% acquisition impact (Sealite, ULC, ECS, SenSoft) 0.8% currency impact Q3 Adjusted Segment Income and Margin: $4.2M decrease in Adjusted Segment Income 2
Slide 10: Summary Q3 2021 Adjusted Segment Results
Summary Q3 2021 Adjusted Segment Results Q3 2021 Y/Y % Y/Y Change Change in Adjusted Segment in Revenue Segment Margin HVAC (1.8%) (280) bps Detection & Measurement 24.9% (270) bps Total Adjusted SPX 6.6% (250) bps Note: Adjusted results are non-GAAP financial measures that exclude, among other item
Slide 11: HVAC Q3 2021 Results
HVAC Q3 2021 Results ($ millions) Q3 Revenue: Q3 2021 Year-to-Date 1.8% year-over-year decrease: 2.4% organic* decrease driven by lower * Cooling volumes 0.6% currency impact Q3 Adjusted Segment Income and Margin: $5.5M decrease in Adjusted Segment Income* 280 bps of margin decrease driven
Slide 12: Detection & Measurement Q3 2021 Results
Detection & Measurement Q3 2021 Results ($ millions) Q3 Revenue: Q3 2021 Year-to-Date 24.9% year-over-year increase: 7.6% organic* increase primarily due to strong sales * at Location & Inspection, CommTech, and AtoN 16.2% acquisition impact (Sealite, ULC, ECS, SenSoft) 1.1% currency impact
Slide 13: Financial Position and Guidance Update
Financial Position and Guidance Update Jamie Harris
Slide 14: Financial Position - Capital Structure & Liquidity Update
Financial Position - Capital Structure & Liquidity Update Pro Forma with ECS ($millions) Q2 2021 Q3 2021 2.1x 1.7x Impact of Short-term debt $169 $2 Transformers Sale Current maturities of long-term debt 10 12 1.8x 1.6x 1.5x Long-term debt 238 234 Total Debt $417 $248 Less: Cash on hand (69) (560) -
Slide 15: 2021 Guidance (Changes Underlined)
2021 Guidance (Changes Underlined) Revenue Segment Income Margin ~$755-765 million ~14% HVAC (prior ~$770-780 million) (prior ~14.5%) Detection & ~$460-470 million ~19% Measurement (prior ~$465-475 million) (prior ~20.5%) ~$1.22-1.24 billion ~16% Total SPX Adjusted (prior ~$1.25 bi
Slide 16: End Market Overview and Closing Remarks
End Market Overview and Closing Remarks Gene Lowe
Slide 17: Market Commentary
Market Commentary Market Comments Cooling: ‒ Solid bookings/growing lead times in Americas and APAC ‒ Labor constraints in Americas Heating: ‒ Strong demand/pricing trends ‒ Supply chain is key Q4 driver Run-rate: ‒ Strong Location & Inspection demand exceeds 2019 levels ‒ Steady demand for At
Slide 18: Executive Summary
Executive Summary Strong demand backdrop Challenging supply chain environment Transformer sale positions company for next phase of growth Multiple growth and margin levers Continue to Control Key Levers of Growth Roadmap November 3, 2021 18
Slide 19: Questions
SPX4 Questions
Slide 20: Modeling Considerations – Full Year 2021
Modeling Considerations – Full Year 2021 Metric Considerations Corporate expense ~$50m, including TSA income Long-term incentive comp ~$13m Restructuring costs ~$1m Interest cost ~$13m Other income/(expense), and Non-service pension ~$8m benefit/(expense) Tax rate ~18% Capex ~$15m Cash cost of pensi
Slide 21: 2021 Adjusted EPS Guidance - Key Drivers
2021 Adjusted EPS Guidance - Key Drivers • Favorable economic policy/infrastructure stimulus $2.27 • Moderating supply chain challenges and input costs • Accelerated project-related sales $2.23 Base Case • Worsening supply chain challenges and input costs • Delayed project-related sales $2.18 • Unfa
Slide 22: Adjusted Segment Income Phasing and Reconciliations
Adjusted Segment Income Phasing and Reconciliations ($ millions) 35% 34% 22% 23% 24% 20% 21% 21% Q1 Q2 Q3 Q4 2019 2020 November 3, 2021 22
Slide 23: 2020 Adjusted SPX Results by Quarter
2020 Adjusted SPX Results by Quarter ($ millions) Q1 Q2 Q3 Q4 2020 Revenue $256.8 $258.0 $268.3 $349.0 $1,132.1 Adjusted Revenue (exclude "Other") 254.7 257.3 267.8 348.3 1,128.1 Segment Income 31.6 31.3 35.7 51.8 150.4 Exclude: "Other" segment income 4.3 4.3 5.3 5.2 19.1 Exclude: One time acquisiti
Slide 24: 2021 YTD Adjusted SPX Results by Quarter
2021 YTD Adjusted SPX Results by Quarter Q1 Q2 Q3 ($ millions) Revenue $287.9 $296.7 $285.8 Adjusted Revenue (exclude "Other") 287.2 296.6 285.7 Segment Income 37.7 32.9 27.2 Exclude: "Other" segment income 4.6 3.9 4.1 Exclude: One time acquisition related costs 0.7 0.9 3.3 Exclude: Intangible amort
Slide 25: Q3 2021 U.S. GAAP to Adjusted EPS Reconciliation
Q3 2021 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) (1) Segment income $ 27.2 $ 12.9 $ 40.1 Corporate expense (2) (11.5) 0.5 (11.0) Long-term incentive compensation expense (3.4) - (3.4) Special charges, net (3) (0.5) 0.5 - Other operating expense - - - Operating
Slide 26: Q3 2020 U.S. GAAP to Adjusted EPS Reconciliation
Q3 2020 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) Segment income (1) $ 35.7 $ 8.6 $ 44.3 Corporate expense (2) (11.8) 0.7 (11.1) Long-term incentive compensation expense (3.2) - (3.2) Special charges, net (0.3) - (0.3) Operating income 20.4 9.3 29.7 Other income
Slide 27: Q3 2021 U.S. GAAP to Adjusted Operating Income Reconciliation
Q3 2021 U.S. GAAP to Adjusted Operating Income Reconciliation ($ millions) Three months ended Nine months ended O ctober 2, 2021 September 26, 2020 O ctober 2, 2021 September 26, 2020 Operating income $ 11.8 $ 20.4 $ 44.7 $ 54.0 Exclude: Aggregate operating losses of the South Africa business (1) (4
Slide 28: Q3 2021 Non-GAAP Reconciliation - Organic Revenue
Q3 2021 Non-GAAP Reconciliation - Organic Revenue Three months ended O ctober 2, 2021 Detection & HVAC Measurement Net Revenue Growth (Decline) (1.8) % 24.9 % Exclude: Foreign Currency 0.6 % 1.1 % Exclude: Acquisitions -% 16.2 % Organic Revenue Growth (Decline) (2.4) % 7.6 % November 3, 2021 28
Slide 29: Adjusted Revenue and Adjusted Segment Income Reconciliation
Q3 2021 and 2020 U.S. GAAP to Adjusted Revenue and Adjusted Segment Income Reconciliation ($ millions) CONSOLIDATED SPX: Three months ended Nine months ended O ctober 2, 2021 September 26, 2020 O ctober 2, 2021 September 26, 2020 Consolidated revenue $ 285.8 $ 268.3 $ 870.4 $ 783.1 Exclude: "Other"
Slide 30: Adjusted Segment Income Reconciliations
Q3 2021 and 2020 U.S. GAAP to Adjusted Segment Income Reconciliations ($ millions) HVAC REPORTABLE SEGMENT: Three months ended Nine months ended O ctober 2, 2021 September 26, 2020 O ctober 2, 2021 September 26, 2020 HVAC segment income $ 21.4 $ 26.8 $ 69.1 $ 64.1 (1) Exclude: Acquisition related co
Slide 31: Q3 2021 Debt Reconciliation
Q3 2021 Debt Reconciliation ($ millions) Q 3 2021 Short-term debt $ 2.3 Current maturities of long-term debt 11.4 Long-term debt 233.9 Gross debt 247.6 plus: adjustment associated with acquisitions (1) 7.7 Adjusted gross debt 255.3 less: cash and equivalents (559.6) Adjusted net debt $ (304.3) 1) In
Slide 32: Q3 2021 Consolidated Adjusted EBITDA Reconciliation
Q3 2021 Consolidated Adjusted EBITDA* Reconciliation Last 12 ($ millions) Months Net Income attributable to SPX Corporation common shareholders $ 120.6 Income tax benefit (20.3) Interest expense 15.5 Income before interest and taxes 115.8 Depreciation and amortization 49.8 EBITDA 165.6 Adjustments:
Slide 33: Q3 2021 Adjusted Free Cash Flow Reconciliation
Q3 2021 Adjusted Free Cash Flow Reconciliation ($ millions) Q 3 2021 Operating cash flow from continuing operations $ 55.1 Capital expenditures (3.3) Free cash flow from continuing operations 51.8 Adjustments* (15.7) Adjusted free cash flow from continuing operations $ 36.1 * Adjustments align with