Slide 1: Q4 2021 Earnings Presentation
Q4 2021 Earnings Presentation February 23, 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 – 2021 Results and 2022 Outlook
Executive Summary – 2021 Results and 2022 Outlook Solid close to 2021 Detection & Measurement performance drove strength Strong balance sheet and liquidity Progressing on key initiatives Continuous Improvement, Digital, Diversity & Inclusion, ESG Positioned for solid growth in 2022 Mor
Slide 5: Adjusted Q4 and 2021 Year/Year Summary
Adjusted Q4 and 2021 Year/Year Summary ($ millions) Solid Top-Line Performance Q4 2021 Full-Year D&M project deliveries offset supply * chain / labor headwinds in HVAC Segment Income and Margin resilient Acquisitions support segment income Favorable mix impact on margin Strong Demand Outlo
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: Q4 Financial Review
Q4 Financial Review Jamie Harris
Slide 8: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q4 2020 Q4 2021 FY 2020 FY 2021 GAAP EPS from continuing operations $0.44 $0.10 $1.61 $1.27 Amortization $0.10 $0.09 $0.24 $0.36 Acquisition-related $0.04 ($0.09) $0.06 $0.00 Asbestos charges $0.28 $0.74 $0.29 $0.78 Non-service pension & other* $0.08 $0.04 ($0.08) ($0.08)
Slide 9: Adjusted Q4 and 2021 Year/Year Results
Adjusted Q4 and 2021 Year/Year Results ($ millions) Q4 Revenue: Q4 2021 Full-Year 0.5% year-over-year increase: (4.5%) organic* decrease due to lower HVAC volumes, partially offset by higher Detection & Measurement 4.9% acquisition impact (Sealite, ECS) 0.1% currency impact Q4 Adjusted Opera
Slide 10: Summary of Q4 and 2021 Adjusted Segment Results
Summary of Q4 and 2021 Adjusted Segment Results Q4 2021 2021 Y/Y % Y/Y Change Y/Y % Y/Y Change Change in Adjusted Segment Change in Adjusted Segment Segment in Revenue Income Margin in Revenue Income Margin HVAC (8.0%) (60) bps 1.5% 0 bps Detection & Measurement 17.0% 130 bps 20.7% (100) bps Total A
Slide 11: HVAC Q4 and 2021 Year/Year Results
HVAC Q4 and 2021 Year/Year Results ($ millions) Q4 Revenue: Q4 2021 Full-Year (8.0%) year-over-year decrease: (9.0%) organic* decrease due to lower shipments in * Heating and Cooling 0.9% acquisition impact (Cincinnati Fan) Q4 Adjusted Segment Income and Margin: $4.5m decrease in Adjusted Se
Slide 12: Detection & Measurement Q4 and 2021 Year/Year Results
Detection & Measurement Q4 and 2021 Year/Year Results ($ millions) Q4 Revenue: Q4 2021 Full-Year 17.0% year-over-year increase: 4.2% organic* increase primarily due to higher sales * of Transportation, CommTech and AtoN products 12.8% acquisition impact (Sealite and ECS) Q4 Adjusted Segment In
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 ($millions) Impact of Q3 2021 Q4 2021 Cincinnati Fan Acquisition Short-term debt $2 $2 1.6x 1.6x Current maturities of long-term debt 12 13 Long-term debt 234 231 -0.9x Total Debt $248 $246 -1.9x Less: Cash on hand (560) (396) * Net Debt $(31
Slide 15: 2022 Guidance
2022 Guidance Revenue Segment Income Margin $855-$890m 14.0-14.5% HVAC ($752m in 2021) (14.3% in 2021) Detection & $485-$520m 19.0%-21.0% Measurement ($467m in 2021) (19.9% in 2021) $1.34-$1.41B 16%-17% Total SPX Adjusted ($1.22B in 2021) (16.4% in 2021) Adjusted Operating Income in a Ra
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 commercial HVAC growth in Americas ‒ Labor constraints in Americas Heating: ‒ Demand remains strong with no material order cancellations ‒ Supply chain is a key 2022 driver Run-rate: ‒ Continued strength in Location & Inspection ‒ Steady deman
Slide 18: Executive Summary
Executive Summary Solid close to 2021 Focused on higher margin/growth platforms Progressing on key initiatives Demand supports solid 2022 outlook Positioned to Continue Growth / Value Creation February 23, 2022 18
Slide 19: Questions
SPX4 Questions
Slide 20: Modeling Considerations – Full Year 2022
Modeling Considerations – Full Year 2022 Metric Considerations Corporate expense $47-49m Long-term incentive comp $13-15m Restructuring costs $1m Interest cost $7-9m Other income/(expense), and Non-service pension $4-6m benefit/(expense) Tax rate 20-22% Capex $15-20m Cash cost of pension + OPEB $12-
Slide 21: 2022 Adjusted EPS Guidance - Key Drivers
2022 Adjusted EPS Guidance - Key Drivers • Favorable economic policy/infrastructure stimulus $2.80 • Moderating supply chain challenges and input costs • Accelerated project-related sales $2.65 Base Case • Worsening supply chain challenges and input costs • Delayed project-related sales $2.50 • Unfa
Slide 22: Adjusted Segment Income Phasing and Reconciliations
Adjusted Segment Income Phasing and Reconciliations ($ millions) 35% 34% 22% 23% 24% 20% 21% 21% Q1 Q2 Q3 Q4 2020 2021 February 23, 2022 22
Slide 23: 2020 Adjusted SPX Results by Quarter
2020 Adjusted SPX Results by Quarter ($ millions) Q1 Q2 Q3 Q4 2020 Segment Income 36.4 36.1 40.8 58.5 171.8 Exclude: One time acquisition related costs 0.1 - - 1.2 1.3 Exclude: Intangible amortization 2.6 2.4 3.3 5.7 14.0 Adjusted Segment Income 39.1 38.5 44.1 65.4 187.1 Operating Income from Contin
Slide 24: 2021 Adjusted SPX Results by Quarter
2021 Adjusted SPX Results by Quarter ($ millions) Q1 Q2 Q3 Q4 2021 Segment Income 42.3 37.3 32.9 61.4 173.9 Exclude: One time acquisition related costs 0.6 0.9 3.3 0.3 5.1 Exclude: Intangible amortization 4.0 6.5 5.5 5.6 21.6 Adjusted Segment Income 46.9 44.7 41.7 67.3 200.6 Operating Income from Co
Slide 25: HVAC Segment Results – 2020-2021
HVAC Segment Results – 2020-2021 ($ millions) Q1 Q2 Q3 Q4 2020 Revenue $162.8 $165.2 $182.6 $230.2 $740.8 GAAP Segment Income 18.2 20.1 26.6 37.8 102.7 Exclude: One time acquisition related costs 0.1 - - 0.5 0.6 Exclude: Intangible amortization 0.8 0.7 0.7 0.7 2.9 Adjusted Segment Income $19.1 $20.8
Slide 26: D&M Segment Results – 2020-2021
D&M Segment Results – 2020-2021 ($ millions) Q1 Q2 Q3 Q4 2020 Revenue $91.9 $92.1 $85.2 $118.1 $387.3 GAAP Segment Income 18.2 16.0 14.2 20.7 69.1 Exclude: One time acquisition related costs - - - 0.7 0.7 Exclude: Intangible amortization 1.8 1.7 2.6 5.0 11.1 Adjusted Segment Income $20.0 $17.7 $16.8
Slide 27: Q4 2021 U.S. GAAP to Adjusted EPS Reconciliation
Q4 2021 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) Segment income (1) $ 61.4 $ 5.9 $ 67.3 Corporate expense (2) (20.6) 5.2 (15.4) Long-term incentive compensation expense (3.4) - (3.4) Impairment of intangible assets (3) (5.7) 5.7 - (4) Special charges, net (0.3)
Slide 28: Q4 2020 U.S. GAAP to Adjusted EPS Reconciliation
Q4 2020 U.S. GAAP to Adjusted EPS Reconciliation GAAP Adjustments Adjusted ($ millions) (1) Segment income $ 58.5 $ 6.9 $ 65.4 Corporate expense (2) (14.7) 1.3 (13.4) Long-term incentive compensation expense (3.6) - (3.6) Impairment of intangible assets (3) (0.7) 0.7 - Special charges, net (1.0) - (
Slide 29: U.S. GAAP to Adjusted Operating Income Reconciliation
U.S. GAAP to Adjusted Operating Income Reconciliation ($ millions) Three months ended Twelve months ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Operating income $ 13.9 $ 29.1 $ 73.7 $ 96.9 Include - TSA Income (1) 0.9 - 0.9 - Exclude: Acquisition related and other c
Slide 30: Q4 2021 Non-GAAP Reconciliation - Organic Revenue
Q4 2021 Non-GAAP Reconciliation - Organic Revenue Three months ended December 31, 2021 Detection & HVAC Measurement Net Revenue Growth (Decline) (8.0)% 17.0 % Exclude: Foreign Currency 0.1 % -% Exclude: Acquisitions 0.9 % 12.8 % Organic Revenue Growth (Decline) (9.0)% 4.2 % February 23, 2022 30
Slide 31: U.S. GAAP to Revenue and Adjusted Segment Income Reconciliation
U.S. GAAP to Revenue and Adjusted Segment Income Reconciliation ($ millions) CONSOLIDATED SPX: Three months ended Twelve months ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Total segment income $ 61.4 $ 58.5 $ 173.9 $ 171.8 Exclude: Acquisition related costs (1) (0.3
Slide 32: U.S. GAAP to Adjusted Segment Income Reconciliations
U.S. GAAP to Adjusted Segment Income Reconciliations ($ millions) HVAC REPORTABLE SEGMENT: Three months ended Twelve months ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 HVAC segment income $ 33.0 $ 37.8 $ 104.2 $ 102.7 Exclude: Acquisition related costs (1) (0.1) (0.
Slide 33: Q4 2021 Debt Reconciliation
Q4 2021 Debt Reconciliation ($ millions) Q 4 2021 Short-term debt $ 2.2 Current maturities of long-term debt 13.0 Long-term debt 230.8 Gross debt 246.0 plus: adjustment associated with acquisitions (1) 1.6 Adjusted gross debt 247.6 (2) less: cash and equivalents (395.4) Adjusted net debt $ (147.8) 1
Slide 34: 2021 Consolidated Adjusted EBITDA Reconciliation
2021 Consolidated Adjusted EBITDA* Reconciliation ($ millions) 2021 Net Income attributable to SPX Corporation common shareholders $ 102.0 Income tax provision (18.2) Interest expense 13.3 Income before interest and taxes 97.1 Depreciation and amortization 46.9 EBITDA 144.0 Adjustments: (Gains)/Loss
Slide 35: Q4 2021 Adjusted Free Cash Flow Reconciliation
Q4 2021 Adjusted Free Cash Flow Reconciliation ($ millions) Q 4 2021 2021 Operating cash flow from continuing operations $ 35.6 $ 131.2 Capital expenditures (2.1) (9.6) Free cash flow from continuing operations 33.5 121.6 Adjustments* (1.3) (18.1) Adjusted free cash flow from continuing operations $