Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation OCTOBER 30, 2024 Q3 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, results of operations, product introductions, and financial projections, are forward-looking statements within the meaning of Section 27A of
Slide 3: Introductory Comments
Introductory Comments Gene Lowe, President & Chief Executive Officer OCTOBER 30, 2024 Q3 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 3|
Slide 4: Executive Summary
Executive Summary ▪ Strong Q3 results » Solid revenue growth and substantial increases in key profit measures ▪ Significant Y/Y margin expansion » Increases in both segments ▪ Continued progress on value-creation initiatives » Key wins in sustainability and continuous improvement ▪ Healthy M&A pipel
Slide 5: Q3 2024 Results Summary
Q3 2024 Results Summary ($ in millions) Third Quarter ▪ Revenue growth of 7.8% Revenue » Strong performance in HVAC Cooling Adjusted EBITDA/ Margin1 ▪ Adjusted EBITDA1 growth of 27.0% » 320 bps of margin1 expansion with increases in both segments 1 Adjusted results are non-GAAP measures. Reconciliat
Slide 6: Value Creation Framework
Value Creation Framework Strong Foundation Business System Target Model Engineered Niches Leading Positions Excellence Growth 15%+ Adj. EBITDA1 Growth Tech-Enabled Digital Strategic M&A Moats Continuous Improvement New Product Development 20%+ Adj. EBITDA1 Margin Talent Commercial Sustainable Excell
Slide 7: Q3 2024 Financial Review
Q3 2024 Financial Review Mark A. Carano, Chief Financial Officer OCTOBER 30, 2024 Q3 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 7|
Slide 8: Adjusted Earnings Per Share
Adjusted Earnings Per Share Q3 2023 Q3 2024 GAAP EPS from continuing operations $0.76 $1.08 Amortization $0.24 $0.26 Acquisition-related $0.05 $0.03 Non-service pension & other $0.01 $0.02 Adj EPS1 from continuing operations $1.06 $1.39 1 Adjusted results are non-GAAP measures. Reconciliations of hi
Slide 9: Q3 2024 Results
Q3 2024 Results ($ in millions) Q3 Revenue: Third Quarter ▪ 7.8% year-over-year increase: Revenue » 3.0% organic1 increase driven by HVAC Consolidated Segment Income / Margin1 » 4.4% acquisition impact » 0.4% currency impact Q3 Consolidated Segment Income / Margin1: ▪ HVAC was primary driver » Conso
Slide 10: HVAC Q3 2024 Results
HVAC Q3 2024 Results ($ in millions) Q3 Revenue: Third Quarter ▪ 15.9% year-over-year increase: Revenue » 9.0% organic1 increase due to higher Cooling sales Segment Income / Margin » 6.8% acquisition impact (Ingénia) » 0.1% currency impact Q3 Segment Income / Margin: ▪ Cooling was key driver of: » S
Slide 11: Detection & Measurement Q3 2024 Results
Detection & Measurement Q3 2024 Results ($ in millions) Q3 Revenue: Third Quarter ▪ -7.0% year-over-year decrease: Revenue » -7.8% organic1 decrease due primarily to project timing Segment Income / Margin » 0.8% currency impact Q3 Segment Income / Margin: ▪ More favorable mix and continuous improvem
Slide 12: Financial Position & Guidance
Financial Position & Guidance Mark A. Carano, Chief Financial Officer OCTOBER 30, 2024 Q3 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 12 |
Slide 13: Financial Position Update
Financial Position Update ($ in millions) Q2 2024 Q3 2024 Q2 2024 Q3 2024 2.11 1.91 Short-term debt $256 $49 1.71 Current maturities of long-term debt 24 24 1.51 1.31 Long-term debt 510 665 1.11 2.0x 0.91 1.8x Total Debt $790 $738 1.6x 0.71 1.4x 2 Less: Cash on hand (133) (129) 0.51 0.31 Net Debt $6
Slide 14: 2024 Guidance Update
2024 Guidance1 Update Detection & Total SPX HVAC Measurement Revenue $1.970-$2.000b $1,365-$1,385m $605-$615m Prior $1.970-$2.020b $1,365-$1,405m $605-$615m Segment Income Margin1 22.6%-23.2% 23.25%-23.75% 21.25%-22.00% Prior 22.3%-23.3% 23.00%-24.00% 20.75%-21.75% Adj. EBITDA1 $410-$430m Prior $410
Slide 15: End Market Review & Closing Comments
End Market Review & Closing Comments Gene Lowe, President & Chief Executive Officer OCTOBER 30, 2024 Q3 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 15 |
Slide 16: Market Commentary
Market Commentary Cooling Heating Project Oriented Run-Rate ▪ Strong demand trends ▪ Late start to winter ▪ Overall project demand ▪ Mixed global demand continue heating shipments healthy with regional variation ▪ Multiple areas of strength ▪ Infrastructure spending on horizon Key Market Strength Su
Slide 17: Executive Summary
Executive Summary ▪ Strong Q3 results ▪ Significant margin expansion in both segments ▪ Well-positioned to achieve full-year guidance ▪ Attractive, active acquisition pipeline Well-Positioned to Continue Value-Creation Journey OCTOBER 30, 2024 Q3 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TEC
Slide 18: Appendix
Appendix OCTOBER 30, 2024 Q3 2024 EARNINGS PRESENTATION | COPYRIGHT © 2024 SPX TECHNOLOGIES 19 |
Slide 19: Modeling Considerations – Full-Year 2024
Modeling Considerations – Full-Year 2024 Metric Considerations Corporate expense $48.0-50.0m Long-term incentive comp $14.0-15.5m Restructuring costs $1.0-2.0m Interest cost $44.0-46.0m Other income/(expense), and Non-service pension benefit/(expense) $0.0-2.5m Tax rate 24.0%-25.0% Capex ~$40m Cash
Slide 20: GAAP Reconciliation Results by Quarter
GAAP Reconciliation Results by Quarter ($ in millions) 2023 2024 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD 1 Consolidated segment income $ 74.4 $ 84.4 $ 91.6 $ 102.8 $ 353.2 $ 99.8 $ 117.6 $ 113.8 331.2 Corporate expense (14.6) (16.6) (13.0) (14.2) (58.4) (13.9) (12.0) (12.4) (38.3) Acquisition-related and other
Slide 21: Segment Results
Segment Results ($ in millions) 2023 2024 HVAC Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD Revenue $251.6 $269.0 $289.2 $312.5 $1,122.3 $302.4 $356.5 $335.3 $994.2 Segment income $47.7 $55.2 $58.3 $73.2 $234.4 $68.4 $83.7 $80.0 $232.1 19% 21% 20% 23% 21% 23% 23% 24% 23% Detection and 2023 2024 Measurement Q1 Q2 Q3
Slide 22: Q3 2024 Revenue by Major product lines
Q3 2024 Revenue by Major product lines ($ in millions) Three months ended September 28, 2024 Detection and Reportable Segments HVAC Measurement Total Major product lines Package and process cooling equipment and services, and engineered air movement solutions $ 217.7 $ — $ 217.7 Boilers, electrical
Slide 23: Q3 2023 Revenue by Major product lines
Q3 2023 Revenue by Major product lines ($ in millions) Three months ended September 30, 2023 Detection and Reportable Segments HVAC Measurement Total Major product lines Package and process cooling equipment and services, and engineered air movement solutions $ 170.8 $ — $ 170.8 Boilers, electrical
Slide 24: Q3 2024 U.S. GAAP to Adjusted EPS Reconciliation
Q3 2024 U.S. GAAP to Adjusted EPS Reconciliation ($ in millions, except per share values) GAAP Adjustments Adjusted Segment income $ 113.8 $ — $ 113.8 Corporate expense (1) (12.4) 0.6 (11.8) Acquisition-related costs (2) (1.4) 1.4 — Long-term incentive compensation expense (4.0) — (4.0) Amortization
Slide 25: Q3 2023 U.S. GAAP to Adjusted EPS Reconciliation
Q3 2023 U.S. GAAP to Adjusted EPS Reconciliation ($ in millions, except per share values) GAAP Adjustments Adjusted Segment income $ 91.6 $ — $ 91.6 Corporate expense (1) (13.0) 0.6 (12.4) Acquisition-related and other costs (2) (2.9) 2.9 — Long-term incentive compensation expense (3.4) — (3.4) Amor
Slide 26: U.S. GAAP to Adjusted Operating Income Reconciliation
U.S. GAAP to Adjusted Operating Income Reconciliation ($ in millions) Three months ended Nine months ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Operating income $ 78.9 $ 57.7 $ 218.1 $ 158.8 Include - TSA Income (1) — 0.1 — 0.3 Exclude: Acquisition-related and
Slide 27: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) Three months ended September 28, 2024 September 30, 2023 Net income (loss) $ 50.2 $ (20.4) Exclude: Income tax provision (15.1) (12.4) Interest expense, net (11.5) (9.4) Amortization expense (1) (16.8) (14.6) Depreciation expense (6.7) (5.1) Loss from d
Slide 28: Q3 2024 Non-GAAP Reconciliation – Organic Revenue
Q3 2024 Non-GAAP Reconciliation – Organic Revenue Three months ended September 28, 2024 Detection & HVAC Measurement Consolidated Net Revenue Growth (Decline) 15.9 % (7.0) % 7.8 % Exclude: Foreign Currency 0.1 % 0.8 % 0.4 % Exclude: Acquisitions 6.8 % - % 4.4 % Organic Revenue Growth (Decline) 9.0 %
Slide 29: Q3 2024 Adjusted Free Cash Flow Reconciliation
Q3 2024 Adjusted Free Cash Flow Reconciliation ($ in millions) Q3 2024 Operating cash flow from continuing operations $ 77.0 Capital expenditures (7.9) Free cash flow from continuing operations 69.1 Adjustments 1 (7.9) Adjusted free cash flow from continuing operations $ 61.2 (1)Adjustments represen