Slide 1: SPX Technologies Q4 2023 Earnings Presentation
SPX Technologies Q4 2023 Earnings Presentation February 22, 2024
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
Executive Summary ❑ Strong close to 2023 ✓ 50% Adjusted EBITDA* growth y/y ✓ Solid performance from acquisitions ❑ Ingénia further builds attractive EAM position ✓ Preferred applications in key growth markets ✓ Flexible, rapid design and automated production ❑ Introducing 2024 Guidance ✓ ~25% Adjust
Slide 5: Q4 2023 Results Summary
Q4 2023 Results Summary ($ millions) Q4 2023 FY 2023 Revenue ❑ Revenue growth of 9.3% Adjusted Operating Income / Margin* ✓ Growth driven by acquisitions in HVAC ❑ Strong margin performance ✓ 18.7% growth in Adj. Operating Income* ✓ 150 bps of margin* expansion Solid Demand Trends and Strong Operati
Slide 6: Value Creation Framework
Value Creation Framework Organic Growth SPX Business System • New products • Digital initiatives • Channel expansion • Continuous Improvement • Adjacent markets • Sustainability Inorganic Growth Culture & Values • Strategic platform focus • Integrity • Significant capital to deploy • Results/account
Slide 7: Building Strategic Platforms – Cooling EAM
Building Strategic Platforms – Cooling EAM CINCINNATI FAN TAMCO Custom Fans, High Blowers, and Performance High Performance ~$250m Industrial and Critical Exhaust Industrial and Commercial Air Revenue* Systems Commercial Air Handling Systems Control Comprehensive Solutions Engineered Air Movement So
Slide 8: Q4 Financial Review
Q4 Financial Review Mark Carano
Slide 9: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q4 2022 Q4 2023 FY 2022 FY 2023 GAAP EPS from continuing operations ($0.55) $0.67 $0.43 $3.10 Amortization $0.09 $0.18 $0.46 $0.71 Acquisition-related $0.02 $0.02 $0.06 $0.21 Asbestos-related $1.65 - $2.03 - Non-service pension & other* ($0.04) $0.38 $0.12 $0.29 Adj EPS f
Slide 10: Q4 2023 Results
Q4 2023 Results ($ millions) Q4 Revenue: Q4 2023 FY 2023 ❑ 9.3% year-over-year increase: Revenue Consolidated Segment Income / Margin* ✓ -1.4% organic decline due primarily to lower Heating volumes ✓ 10.0% acquisition impact (TAMCO & ASPEQ) ✓ 0.7% currency impact Q4 Consolidated Segment Income* and
Slide 11: HVAC Q4 2023 Results
HVAC Q4 2023 Results ($ millions) Q4 Revenue: Q4 2023 FY 2023 ❑ 14.0% year-over-year increase: Revenue Segment Income / Margin ✓ 15.7% acquisition impact (TAMCO & ASPEQ) ✓ -2.0% organic decline, with growth in Cooling offset by a decline in Heating ✓ 0.3% currency impact Q4 Segment Income and Margin
Slide 12: Detection & Measurement Q4 2023 Results
Detection & Measurement Q4 2023 Results ($ millions) Q4 2023 FY 2023 Q4 Revenue: Revenue Segment Income / Margin ❑ 1.2% year-over-year increase: ✓ -0.2% organic decline with lower run-rate sales offset by higher project sales ✓ 1.4% currency impact Q4 Segment Income and Margin: ❑ -$7.4m decline in S
Slide 13: Financial Position and Liquidity Review
Financial Position and Liquidity Review Mark Carano
Slide 14: Financial Position - Capital Structure & Liquidity Update
Financial Position - Capital Structure & Liquidity Update ($ millions) Q3 2023 Q4 2023 Ingénia Q3 2023 Q4 2023 2.5 Impact Short-term debt $130 $18 2 2.3x Current maturities of long-term debt 14 17 2.0x 1.5 Long-term debt 530 523 1 2.0x Total Debt $674 $558 1.7x 1.5x 1.3x 0.5 Less: Cash on hand ** (1
Slide 15: 2024 Guidance
2024 Guidance Detection & Total SPX HVAC Measurement Revenue $1.93-$2.00B $1,325-$1,375m $605-$625m Prior year $1.74B $1.12B 619m Segment Income Margin* 21.0%-22.0% 21.25%-22.25% 20.0%-21.0% Prior year 20.3% 20.9% 19.2% Adj. EBITDA* $375-$405m Prior year $310M Adj. EBITDA Margin* Anticipate achievin
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: ‒ Strong demand trends (data centers, semiconductors, etc.) ‒ Stable labor and supply chain ❑ Heating: ‒ Decarbonization driving commercial and industrial demand ‒ Hydronics demand impacted by warm winter (Q4/Q1) ❑ Project-oriented: ‒ Overall project dema
Slide 18: Executive Summary
Executive Summary ❑ Solid close to 2023 ❑ Ingénia further builds attractive EAM position ❑ Continued demand strength in core markets ❑ Well-positioned to achieve “SPX 2025” targets ahead of schedule Significant Growth and Value-Creation Opportunities Ahead February 22, 2024 18
Slide 19: Questions
SPX4 TECHNOLOGIES Questions
Slide 20: Appendix
SPX4 TECHNOLOGIES Appendix
Slide 21: Modeling Considerations – Full Year 2024
Modeling Considerations – Full Year 2024 Metric Considerations Corporate expense $46.0-48.0m Long-term incentive comp $14.5-15.5m Restructuring costs $1.0-2.0m Interest cost $44.0-47.5m Other income/(expense), and Non-service pension benefit/(expense) ~$1-2m Tax rate 24.0%-26.0% Capex ~$40m Cash cos
Slide 22: 2024 Adjusted EPS Guidance - Key Drivers
2024 Adjusted EPS Guidance - Key Drivers • Favorable economic trends $5.15 • Improving short-cycle conditions • Accelerated project-related sales • Favorable heating season $5.00 Base Case • Worsening short-cycle conditions • Unfavorable heating season • Delayed project-related sales $4.85 • Unfavor
Slide 23: Consolidated Segment Income Phasing
Consolidated Segment Income* Phasing 36% 29% 25% 26% 23% 24% 21% 16% Q1 Q2 Q3 Q4 2022 2023 *Consolidated Segment income margin for a period is calculated by dividing consolidated segment income for the period by revenue for the period. February 22, 2024 23
Slide 24: GAAP Reconciliation Results by Quarter
GAAP Reconciliation Results by Quarter ($ millions) 2022 2023 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Consolidated Segment income* $ 39.6 $ 56.1 $ 63.4 $ 90.5 $ 249.6 $ 74.4 $ 84.4 $ 91.6 $ 102.8 $ 353.2 Corporate expense (16.6) (16.4) (17.2) (18.4) (68.6) (14.6) (16.6) (13.0) (14.2) (58.4) Acquisition-relate
Slide 25: Adjusted SPX Results by Quarter
Adjusted SPX Results by Quarter ($ millions, except per share values) 2022 2023 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY HVAC segment income $ 20.6 $ 28.3 $ 33.1 $ 53.5 $ 135.5 $ 47.7 $ 55.2 $ 58.3 $ 73.2 $ 234.4 Detection & Measurement segment income 19.0 27.8 30.3 37.0 114.1 26.7 29.2 33.3 29.6 118.8 Consoli
Slide 26: HVAC Segment Results
HVAC Segment Results ($ millions) 2022 2023 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue $193.1 $218.7 $227.8 $274.2 $913.8 $251.6 $269.0 $289.2 $312.5 $1,122.3 Segment income $20.6 $28.3 $33.1 $53.5 $135.5 $47.7 $55.2 $58.3 $73.2 $234.4 11% 13% 15% 20% 15% 19% 21% 20% 23% 21% February 22, 2024 26
Slide 27: Detection & Measurement Segment Results
Detection & Measurement Segment Results ($ millions) 2022 2023 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue $114.0 $135.3 $142.7 $155.1 $547.1 $148.2 $154.3 $159.5 $156.9 $618.9 Segment income $19.0 $27.8 $30.3 $37.0 $114.1 $26.7 $29.2 $33.3 $29.6 $118.8 17% 21% 21% 24% 21% 18% 19% 21% 19% 19% February 22,
Slide 28: Q4 2023 U.S. GAAP to Adjusted EPS Reconciliation
Q4 2023 U.S. GAAP to Adjusted EPS Reconciliation ($ millions, GAAP Adjustments Adjusted except per share values) Segment income $ 102.8 $ — $ 102.8 Corporate expense (1) (14.2) 0.8 (13.4) Acquisition-related and other costs (2) (0.8) 0.8 — Long-term incentive compensation expense (3.4) — (3.4) Amort
Slide 29: Q4 2022 U.S. GAAP to Adjusted EPS Reconciliation
Q4 2022 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions, except per Segment income $ 90.5 $ — $ 90.5 share values) Corporate expense (1) (18.4) 2.9 (15.5) Acquisition-related and other costs (2) (0.8) 0.8 — Long-term incentive compensation expense (3.2) — (3.2) Amortiz
Slide 30: FY 2023 U.S. GAAP to Adjusted EPS Reconciliation
FY 2023 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions, except per Segment income $ 353.2 $ — $ 353.2 share values) Corporate expense (1) (58.4) 8.1 (50.3) Acquisition-related and other costs (2) (5.8) 5.8 — Long-term incentive compensation expense (13.4) — (13.4) Amo
Slide 31: FY 2022 U.S. GAAP to Adjusted EPS Reconciliation
FY 2022 U.S. GAAP to Adjusted EPS Reconciliation ($ millions, GAAP Adjustments Adjusted except per Segment income $ 249.6 $ — $ 249.6 share values) Corporate expense (1) (68.6) 18.2 (50.4) Acquisition-related and other costs (2) (1.9) 1.9 — Long-term incentive compensation expense (3) (10.9) (0.8) (
Slide 32: U.S. GAAP to Adjusted Operating Income Reconciliation
U.S. GAAP to Adjusted Operating Income Reconciliation Three months ended Twelve months ended ($ millions) December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Operating income (loss) $ 63.1 $ (24.9) $ 221.9 $ 51.0 Include - TSA Income (1) — 0.5 0.3 2.9 Exclude: Acquisition-related
Slide 33: Q4 2023 Non-GAAP Reconciliation - Organic Revenue
Q4 2023 Non-GAAP Reconciliation - Organic Revenue Three months ended December 31, 2023 Detection & HVAC Measurement Consolidated Net Revenue Growth 14.0 % 1.2 % 9.3 % . Exclude: Foreign Currency 0.3 % 1.4 % 0.7 % Exclude: Acquisitions 15.7 % - % 10.0 % Organic Revenue Decline (2.0) % (0.2) % (1.4) %
Slide 34: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ millions) 2022 2023 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Net income (loss) $ 11.4 $ 13.0 $ 3.1 $ (27.3) $ 0.2 $ 42.8 $ 36.0 $ (20.4) $ 31.5 $ 89.9 Exclude: Income tax (provision) benefit (2.6) (4.4) 2.5 (2.8) (7.3) (11.3) (7.8) (12.4) (10.1) (41.6) Interest expense, net (2
Slide 35: Q4 2023 Adjusted Free Cash Flow Reconciliation
Q4 2023 Adjusted Free Cash Flow Reconciliation ($ millions) FY 2023 Operating cash flow from continuing operations $ 243.8 Capital expenditures (23.9) Free cash flow from continuing operations 219.9 Adjustments* 10.2 Adjusted free cash flow from continuing operations $ 230.1 * Adjustments represent