Slide 1: Q1 2022 Earnings Presentation
Q1 2022 Earnings Presentation May 4, 2022 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 2022 Results
Executive Summary – Q1 2022 Results Solid start to 2022 Exceeded internal expectations Supply constraints continue; seeing some improvement Executing on growth strategy ITL acquisition further builds out AtoN Updating guidance for ITL acquisition Well-Positioned to Continue Value Creatio
Slide 5: Q1 2022 Results Summary
Q1 2022 Results Summary ($ millions) Q1 2022 Lower organic D&M revenues Y/Y * As anticipated Location & Inspection and Transportation outperformed Continued demand strength Acquisitions supporting growth On Track for Double Digit Earnings Growth *Adjusted results are non-GAAP financial mea
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 platform focus • Integrity • Significant capital to deploy • Result
Slide 7: ITL Acquisition
ITL Acquisition ~$40-60m ~$25-30m* ~$30-40m* ~$18m* Terrestrial Marine Obstruction Airfield Ground and Bolt-on Terrestrial Obstruction Lighting Lighting Marine Obstruction Obstruction Lighting Lighting Transformed ~$40-60m Obstruction Lighting Business into ~$150m Global Leader in Aids to Navigation
Slide 8: Reinvesting Proceeds of Transformers Sale
Reinvesting Proceeds of Transformers Sale ~$540m* net proceeds CAPITAL ~$320m deployed ~60% SEGMENT Low $40Ms Transformers INCOME † High $20Ms ~60% Recent Acquisitions** ~10% MARGIN High teens % +800 bps ~2% GROWTH ~4%+ ~Double • Net after-tax proceeds received for sale of Transformer Solutions (Oct
Slide 9: Q1 Financial Review
Q1 Financial Review Jamie Harris
Slide 10: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q1 2021 Q1 2022 GAAP EPS from continuing operations $0.50 $0.28 Amortization $0.07 $0.15 Acquisition-related $0.02 $0.03 Non-service pension & other ($0.10) ($0.06) Adj. EPS from continuing operations* $0.49 $0.40 Q1 2022 Adjusted EPS of $0.40 Note: Adjusted results are n
Slide 11: Adjusted Q1 2022 Results
Adjusted Q1 2022 Results ($ millions) Q1 Adjusted Results: Q1 2022 6.9% year-over-year increase: * -2.5% organic decrease due to lower D&M volumes, partially offset by price increases in HVAC 9.9% acquisition impact (Sealite, ECS and Cincinnati Fan) -0.5% currency impact from stronger USD Q1
Slide 12: Summary Q1 2022 Adjusted Segment Results
Summary Q1 2022 Adjusted Segment Results Q1 2022 Y/Y % Y/Y Change Change in Adjusted Segment Segment in Revenue Income Margin* HVAC 10.0% (240) Bps Detection & Measurement 2.2% (480) Bps Total SPX 6.9% (350) bps Organic -2.5% Acquisitions 9.9% Currency -0.5% *Adjusted results are non-GAAP financial
Slide 13: HVAC Q1 2022 Results
HVAC Q1 2022 Results ($ millions) Q1 Revenue: Q1 2022 10.0% year-over-year Increase: * 0.4% organic increase. Strong demand and pricing, tempered by production and labor constraints 9.6% acquisition impact (Cincinnati Fan) Q1 Adjusted Segment Income* and Margin*: $2.4m decrease in Adjusted S
Slide 14: Detection & Measurement Q1 2022 Results
Detection & Measurement Q1 2022 Results ($ millions) Q1 Revenue: Q1 2022 2.2% year-over-year increase: * -7.0% organic decrease due to lower revenues from CommTech and ULC, partially offset by significant strength in locator sales 10.3% acquisition impact (Sealite and ECS) -1.1% currency imp
Slide 15: Financial Position and Liquidity Review
Financial Position and Liquidity Review Jamie Harris
Slide 16: Financial Position - Capital Structure & Liquidity Update
Financial Position - Capital Structure & Liquidity Update ($millions) Q4 2021 Q1 2022 Short-term debt $2 $2 Current maturities of long-term debt 13 13 1.5x 1.5x Long-term debt 231 228 Total Debt $246 $243 -0.1x -0.9x Less: Cash on hand (395) (270) ** Net Debt $(149) $(27) Q3 2021 Q1 2022 Gross Lever
Slide 17: 2022 Guidance (Updated)
2022 Guidance (Updated) Revenue Segment Income Margin $855-$890m 14.0-14.5% HVAC Detection & $500-$535m (+$15m) 19.0%-21.0% Measurement ($485-$520m prior) $1.36-$1.43B (+$15m) 16%-17% Total SPX ($1.34-$1.41B prior) Adj. Operating Income of $153-173m (+$3m), 11%-12% margin; Adj. EPS* of $
Slide 18: End Market Overview and Closing Remarks
End Market Overview and Closing Remarks Gene Lowe
Slide 19: Market Commentary
Market Commentary Market Comments Cooling: ‒ Solid commercial demand in Americas ‒ Labor constraints / pandemic restrictions Heating: ‒ Demand strong / No material order cancellations ‒ Managing production constraints (key driver of 2022 results) Run-rate: ‒ Continued strength in Location & In
Slide 20: Executive Summary
Executive Summary Solid start to year Executing on growth strategy (ITL acquisition) Strong end market demand; managing production constraints Significant capital available Well-Positioned to Achieve “SPX 2025” Targets May 4, 2022 20
Slide 21: Questions
SPX4 Questions
Slide 22: Modeling Considerations – Full Year 2022
Modeling Considerations – Full Year 2022 Metric Considerations Corporate expense $47-49m Long-term incentive comp $12-14m Restructuring costs $1m Interest cost ~$8-9m Other income/(expense), and Non-service pension $4-5m benefit/(expense) Tax rate 20-22% Capex $15-20m Cash cost of pension + OPEB $12
Slide 23: 2022 Adjusted EPS Guidance - Key Drivers
2022 Adjusted EPS Guidance - Key Drivers • Favorable economic policy/infrastructure stimulus $2.85 • Accelerated project-related sales • Moderating supply chain challenges and input costs $2.70 Base Case • Worsening supply chain challenges and input costs • Delayed project-related sales $2.55 • Unfa
Slide 24: Adjusted Segment Income Phasing and Reconciliations
Adjusted Segment Income Phasing and Reconciliations 34% 31% 23% 23% 23% 22% 24% 21% Q1 Q2 Q3 Q4 2020 2021 May 4, 2022 24
Slide 25: Adjusted SPX Results by Quarter
Adjusted SPX Results by Quarter ($ millions) Q1 Q2 Q3 Q4 2021 Q1 2022 Segment Income 42.3 37.3 32.9 61.4 173.9 30.2 Exclude: One time acquisition related costs 0.7 0.9 3.2 0.3 5.1 0.1 Exclude: Intangible amortization 4.0 6.5 5.5 5.6 21.6 9.3 Adjusted Segment Income 47.0 44.7 41.6 67.3 200.6 39.6 Ope
Slide 26: HVAC Segment Results – 2021-2022
HVAC Segment Results – 2021-2022 ($ millions) Q1 Q2 Q3 Q4 2021 Q1 2022 Revenue $175.6 $185.4 $179.3 $211.8 $752.1 $193.1 GAAP Segment Income 22.3 25.9 23.0 33.0 104.2 15.2 Exclude: One time acquisition related costs - - - 0.1 0.1 - Exclude: Intangible amortization 0.7 0.7 0.6 1.4 3.4 5.4 Adjusted Se
Slide 27: D&M Segment Results – 2021-2022
D&M Segment Results – 2021-2022 ($ millions) Q1 Q2 Q3 Q4 2021 Q1 2022 Revenue $111.6 $111.2 $106.4 $138.2 $467.4 $114.0 GAAP Segment Income 20.0 11.4 9.9 28.4 69.7 15.0 Exclude: One time acquisition related costs 0.7 0.9 3.2 0.2 5.0 0.1 Exclude: Intangible amortization 3.3 5.8 4.9 4.2 18.2 3.9 Adjus
Slide 28: Q1 2022 U.S. GAAP to Adjusted EPS Reconciliation
Q1 2022 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted Segment income (1) $ 30.2 $ 9.4 $ 39.6 ($ millions) (2) Corporate expense (16.6) 5.2 (11.4) Long-term incentive compensation expense (3.1) - (3.1) Special charges, net - - - Other operating income (3) 0.9 (0.9) - Operating in
Slide 29: Q1 2021 U.S. GAAP to Adjusted EPS Reconciliation
Q1 2021 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted Segment income (1) $ 42.3 $ 4.7 $ 47.0 ($ millions) Corporate expense (2) (14.4) 0.9 (13.5) Long-term incentive compensation expense (2.7) - (2.7) Special charges, net (0.2) - (0.2) Operating income 25.0 5.6 30.6 Other income
Slide 30: U.S. GAAP to Adjusted Operating Income Reconciliation
U.S. GAAP to Adjusted Operating Income Reconciliation Three months ended ($ millions) April 2, 2022 April 3, 2021 Operating income $ 11.4 $ 25.0 Include - TSA Income (1) 0.9 - Exclude: Acquisition related and other costs (2) (4.4) (1.6) Other operating income (3) 0.9 - Amortization expense (4) (9.3)
Slide 31: Q1 2022 Non-GAAP Reconciliation - Organic Revenue
Q1 2022 Non-GAAP Reconciliation - Organic Revenue Three months ended April 2, 2022 Detection & HVAC Measurement Consolidated Net Revenue Growth 10.0 % 2.2 % 6.9 % Exclude: Foreign Currency -% (1.1) % (0.5) % Exclude: Acquisitions 9.6 % 10.3 % 9.9 % Organic Revenue Growth (Decline) 0.4 % (7.0) % (2.5
Slide 32: U.S. GAAP Adjusted Segment Income Reconciliation
U.S. GAAP Adjusted Segment Income Reconciliation ($ millions) CONSOLIDATED SPX: Three months ended April 2, 2022 April 3, 2021 Total segment income $ 30.2 $ 42.3 Exclude: Acquisition related costs (1) (0.1) (0.7) Exclude: Amortization expense (2) (9.3) (4.0) Adjusted segment income $ 39.6 $ 47.0 as
Slide 33: U.S. GAAP to Adjusted Segment Income Reconciliations
U.S. GAAP to Adjusted Segment Income Reconciliations HVAC REPORTABLE SEGMENT: Three months ended ($ millions) April 2, 2022 April 3, 2021 HVAC segment income $ 15.2 $ 22.3 Exclude: Acquisition related costs (1) - - Exclude: Amortization expense (2) (5.4) (0.7) HVAC adjusted segment income $ 20.6 $ 2
Slide 34: Q1 2022 Debt Reconciliation
Q1 2022 Debt Reconciliation ($ millions) Q 1 2022 Short-term debt $ 2.0 Current maturities of long-term debt 13.0 Long-term debt 227.7 Gross debt 242.7 less: adjustment associated with acquisitions (1) 0.4 Adjusted gross debt 242.3 less: cash and equivalents (2) (268.9) Adjusted net debt $ 26.6 (1)
Slide 35: Q1 2022 Consolidated Adjusted EBITDA Reconciliation
Q1 2022 Consolidated Adjusted EBITDA* Reconciliation Last 12 ($ millions) Months Net Income attributable to SPX Corporation common shareholders $ 87.0 Income tax provision (22.6) Interest expense 11.5 Income before interest and taxes 75.9 Depreciation and amortization 50.1 EBITDA 126.0 Adjustments:
Slide 36: Q1 2022 Adjusted Free Cash Flow Reconciliation
Q1 2022 Adjusted Free Cash Flow Reconciliation ($ millions) Q1 2022 Operating cash from continuing operations $ (48.6) Capital Expenditures (2.1) Free Cashflow from continuing Operations (50.7) Adjustment* 13.9 Adjusted free cash flow from continuing operations (36.8) * Adjustments align with our re