SPX Reports Third Quarter 2022 Results
Q3 GAAP EPS of
Organic Growth Across All Platforms; Solid Contribution from Acquisitions
Raising Full-Year 2022 Adjusted EPS* Guidance to Range of
Third Quarter 2022 Overview:
For the third quarter of 2022, the company reported revenue of
Adjusted operating income* was
Third Quarter and Year-to-Date Financial Comparisons:
($ millions) | Q3 2022 | Q3 2021 | 2022 YTD | 2021 YTD | ||||||||
Revenue | $ | 370.5 | $ | 285.7 | $ | 1,031.6 | $ | 869.5 | ||||
Income from continuing operations | 12.5 | 13.9 | 44.6 | 54.6 | ||||||||
Segment Income* | 56.6 | 32.9 | 134.9 | 112.5 | ||||||||
Operating Income | 37.3 | 17.7 | 75.9 | 59.8 |
Adjusted Segment Income* | 63.4 | 41.7 | 159.1 | 133.4 | ||||||||
Adjusted Operating Income* | 48.3 | 27.4 | 115.6 | 86.7 |
* Non-GAAP financial measure. See attached schedules for reconciliation of the historical non-GAAP financial measure to most comparable GAAP financial measure.
HVAC Segment
Revenue for the third quarter of 2022 was
Segment income in the third quarter of 2022 was
Adjusted segment income*, which excludes intangible amortization expense of
Detection & Measurement Segment
Revenue for the third quarter of 2022 was
Segment income for the third quarter of 2022 was
Adjusted segment income*, which excludes intangible amortization expense and acquisition-related costs of
Financial Update:
As of
2022 Guidance Update:
SPX is updating full-year 2022 guidance, and is now targeting consolidated revenue of approximately
Segment and company performance is expected to be as follows:
Revenue | Segment Income Margin % | |||
HVAC | ( |
~14.0% (14.0% prior) | ||
Detection & Measurement | ( |
20.0%-21.0% (19.0%-21.0% prior) |
||
Total SPX | ( |
~16.5% (16.0% prior) |
Non-GAAP Presentation: To provide additional clarity to its operating results, the company discusses results that include “adjusted” non-GAAP financial measures. Reconciliations of historical adjusted results to the most comparable GAAP measures are available in the exhibits of this press release.
Form 10-Q: The company expects to file its quarterly report on Form 10-Q for the quarter ended
Conference Call: SPX will host a conference call at
New Call Access Process: To access the call by phone, please use the link below to receive dial-in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available until
https://register.vevent.com/register/BI92e3e13598a9411f86c3a41c65d60107
Upcoming Investor Events: Company management plans to conduct meetings with investors during the fourth quarter of 2022 and the company will also be participating in Baird’s 2022
About
*Non-GAAP financial measure. See attached schedules for reconciliation of each historical non-GAAP measure to the respective most comparable GAAP financial measure.
Note: Our non-GAAP financial guidance excludes items, which would be included in our GAAP financial measures, that we do not consider indicative of our on-going performance; and are calculated in a manner consistent with the presentation of the similarly titled historical non-GAAP measures presented in this press release. These items include, but are not limited to, acquisition costs, costs associated with dispositions, and potential non-cash income or expense items associated with changes in market interest rates and actuarial or other data related to our pension and postretirement plans, as the ultimate aggregate amounts associated with these items are out of our control and/or cannot be reasonably predicted. Accordingly, a reconciliation of our non-GAAP financial guidance to the most comparable GAAP financial measures is not practicable. Full-year guidance excludes changes in the number of shares outstanding; impacts from future acquisitions, dispositions and related transaction costs, restructuring costs, incremental impacts of tariffs and trade tensions on market demand and costs subsequent to the end of the third quarter, the impact of foreign exchange rate changes subsequent to the end of the third quarter, impacts from further spread of COVID-19, and environmental and litigation charges.
Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. The company’s business operations and financial profile are subject to risks and uncertainties, including those identified in SPX’s documents filed with the
Actual results may differ materially from these statements. The words “guidance,” “believe,” “expect,” “anticipate,” “project” and similar expressions identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
Statements in this press release speak only as of the date of this press release, and SPX disclaims any responsibility to update or revise such statements, except as required by law.
Investor and Media Contacts:
Phone: 980-474-3806
E-mail: spx.investor@spx.com
SOURCE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(Unaudited; in millions, except per share amounts) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
Revenues | $ | 370.5 | $ | 285.7 | $ | 1,031.6 | $ | 869.5 | |||||||
Costs and expenses: | |||||||||||||||
Cost of products sold | 237.4 | 189.9 | 669.9 | 567.0 | |||||||||||
Selling, general and administrative | 89.1 | 72.7 | 261.6 | 223.3 | |||||||||||
Intangible amortization | 6.7 | 5.5 | 23.1 | 16.0 | |||||||||||
Impairment of goodwill and intangible assets | — | 24.3 | — | 24.3 | |||||||||||
Special charges, net | — | (0.1 | ) | 0.1 | 0.7 | ||||||||||
Other operating (income) expense, net | — | (24.3 | ) | 1.0 | (21.6 | ) | |||||||||
Operating income | 37.3 | 17.7 | 75.9 | 59.8 | |||||||||||
Other income (expense), net | (24.6 | ) | 3.8 | (19.8 | ) | 17.6 | |||||||||
Interest expense | (2.6 | ) | (3.5 | ) | (7.3 | ) | (10.9 | ) | |||||||
Interest income | 1.0 | 0.1 | 1.4 | 0.2 | |||||||||||
Loss on amendment/refinancing of senior credit agreement | (1.1 | ) | — | (1.1 | ) | (0.2 | ) | ||||||||
Income from continuing operations before income taxes | 10.0 | 18.1 | 49.1 | 66.5 | |||||||||||
Income tax (provision) benefit | 2.5 | (4.2 | ) | (4.5 | ) | (11.9 | ) | ||||||||
Income from continuing operations | 12.5 | 13.9 | 44.6 | 54.6 | |||||||||||
Income (loss) from discontinued operations, net of tax | — | (35.3 | ) | — | 9.4 | ||||||||||
Income (loss) on disposition of discontinued operations, net of tax | (9.4 | ) | 351.7 | (17.1 | ) | 355.0 | |||||||||
Income (loss) from discontinued operations, net of tax | (9.4 | ) | 316.4 | (17.1 | ) | 364.4 | |||||||||
Net income | $ | 3.1 | $ | 330.3 | $ | 27.5 | $ | 419.0 | |||||||
Basic income per share of common stock: | |||||||||||||||
Income from continuing operations | $ | 0.28 | $ | 0.31 | $ | 0.98 | $ | 1.21 | |||||||
Income (loss) from discontinued operations | (0.21 | ) | 6.98 | (0.38 | ) | 8.05 | |||||||||
Net income per share | $ | 0.07 | $ | 7.29 | $ | 0.60 | $ | 9.26 | |||||||
Weighted-average number of common shares outstanding — basic | 45.144 | 45.331 | 45.382 | 45.244 | |||||||||||
Diluted income per share of common stock: | |||||||||||||||
Income from continuing operations | $ | 0.27 | $ | 0.30 | $ | 0.96 | $ | 1.18 | |||||||
Income (loss) from discontinued operations | (0.20 | ) | 6.78 | (0.37 | ) | 7.84 | |||||||||
Net income per share | $ | 0.07 | $ | 7.08 | $ | 0.59 | $ | 9.02 | |||||||
Weighted-average number of common shares outstanding — diluted | 46.132 | 46.650 | 46.253 | 46.455 | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited; in millions) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 183.4 | $ | 388.2 | |||
Accounts receivable, net | 266.1 | 223.4 | |||||
Contract assets | 30.2 | 28.9 | |||||
Inventories, net | 265.2 | 189.8 | |||||
Other current assets | 92.8 | 73.1 | |||||
Total current assets | 837.7 | 903.4 | |||||
Property, plant and equipment: | |||||||
Land | 13.9 | 13.9 | |||||
Buildings and leasehold improvements | 62.3 | 62.9 | |||||
Machinery and equipment | 227.8 | 231.4 | |||||
304.0 | 308.2 | ||||||
Accumulated depreciation | (197.0 | ) | (194.9 | ) | |||
Property, plant and equipment, net | 107.0 | 113.3 | |||||
448.6 | 457.3 | ||||||
Intangibles, net | 403.7 | 415.5 | |||||
Other assets | 619.8 | 675.9 | |||||
Deferred income taxes | 24.5 | 11.0 | |||||
Assets of DBT and Heat Transfer (includes cash and cash equivalents of |
41.2 | 52.2 | |||||
TOTAL ASSETS | $ | 2,482.5 | $ | 2,628.6 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 125.2 | $ | 119.6 | |||
Contract liabilities | 45.5 | 44.7 | |||||
Accrued expenses | 194.6 | 217.9 | |||||
Income taxes payable | 6.8 | 42.1 | |||||
Short-term debt | 1.9 | 2.2 | |||||
Current maturities of long-term debt | 0.4 | 13.0 | |||||
Total current liabilities | 374.4 | 439.5 | |||||
Long-term debt | 244.6 | 230.8 | |||||
Deferred and other income taxes | 25.5 | 31.3 | |||||
Other long-term liabilities | 726.9 | 788.5 | |||||
Liabilities of DBT and Heat Transfer | 31.4 | 35.6 | |||||
Total long-term liabilities | 1,028.4 | 1,086.2 | |||||
Stockholders' Equity: | |||||||
Common stock | 0.5 | 0.5 | |||||
Paid-in capital | 1,331.9 | 1,334.2 | |||||
Retained deficit | (24.3 | ) | (51.8 | ) | |||
Accumulated other comprehensive income | 237.2 | 263.9 | |||||
Common stock in treasury | (465.6 | ) | (443.9 | ) | |||
Total stockholders' equity | 1,079.7 | 1,102.9 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,482.5 | $ | 2,628.6 | |||
RESULTS OF REPORTABLE SEGMENTS | ||||||||||||||||||||||||||||
(Unaudited; in millions) | ||||||||||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||||||
Δ | %/bps | Δ | %/bps | |||||||||||||||||||||||||
HVAC reportable segment | ||||||||||||||||||||||||||||
Revenues | $ | 227.8 | $ | 179.3 | $ | 48.5 | 27.0% | $ | 639.6 | $ | 540.3 | $ | 99.3 | 18.4% | ||||||||||||||
Gross profit | 69.3 | 51.5 | 17.8 | 188.0 | 161.5 | 26.5 | ||||||||||||||||||||||
Selling, general and administrative expense | 36.2 | 27.9 | 8.3 | 106.0 | 88.3 | 17.7 | ||||||||||||||||||||||
Intangible amortization expense | 2.2 | 0.6 | 1.6 | 10.3 | 2.0 | 8.3 | ||||||||||||||||||||||
Income | $ | 30.9 | $ | 23.0 | $ | 7.9 | 34.3% | $ | 71.7 | $ | 71.2 | $ | 0.5 | 0.7% | ||||||||||||||
as a percent of revenues | 13.6 | % | 12.8 | % | 80 bps | 11.2 | % | 13.2 | % | -200 bps | ||||||||||||||||||
Detection & Measurement reportable segment | ||||||||||||||||||||||||||||
Revenues | $ | 142.7 | $ | 106.4 | $ | 36.3 | 34.1% | $ | 392.0 | $ | 329.2 | $ | 62.8 | 19.1% | ||||||||||||||
Gross profit | 63.8 | 44.3 | 19.5 | 173.7 | 141.0 | 32.7 | ||||||||||||||||||||||
Selling, general and administrative expense | 33.6 | 29.5 | 4.1 | 97.7 | 85.7 | 12.0 | ||||||||||||||||||||||
Intangible amortization expense | 4.5 | 4.9 | (0.4 | ) | 12.8 | 14.0 | (1.2 | ) | ||||||||||||||||||||
Income | $ | 25.7 | $ | 9.9 | $ | 15.8 | 159.6% | $ | 63.2 | $ | 41.3 | $ | 21.9 | 53.0% | ||||||||||||||
as a percent of revenues | 18.0 | % | 9.3 | % | 870 bps | 16.1 | % | 12.5 | % | 360 bps | ||||||||||||||||||
Consolidated Revenues | $ | 370.5 | $ | 285.7 | $ | 84.8 | 29.7% | $ | 1,031.6 | $ | 869.5 | $ | 162.1 | 18.6% | ||||||||||||||
Consolidated Segment Income | 56.6 | 32.9 | 23.7 | 72.0% | 134.9 | 112.5 | 22.4 | 19.9% | ||||||||||||||||||||
as a percent of revenues | 15.3 | % | 11.5 | % | 380 bps | 13.1 | % | 12.9 | % | 20 bps | ||||||||||||||||||
Total segment income | $ | 56.6 | $ | 32.9 | $ | 23.7 | $ | 134.9 | $ | 112.5 | $ | 22.4 | ||||||||||||||||
Corporate expense | 17.2 | 11.9 | 5.3 | 50.2 | 39.9 | 10.3 | ||||||||||||||||||||||
Long-term incentive compensation expense | 2.1 | 3.4 | (1.3 | ) | 7.7 | 9.4 | (1.7 | ) | ||||||||||||||||||||
Impairment of goodwill and intangible assets | — | 24.3 | (24.3 | ) | — | 24.3 | (24.3 | ) | ||||||||||||||||||||
Special charges, net | — | (0.1 | ) | 0.1 | 0.1 | 0.7 | (0.6 | ) | ||||||||||||||||||||
Other operating income/expense, net | — | (24.3 | ) | 24.3 | 1.0 | (21.6 | ) | 22.6 | ||||||||||||||||||||
Consolidated operating income | $ | 37.3 | $ | 17.7 | $ | 19.6 | 110.7% | $ | 75.9 | $ | 59.8 | $ | 16.1 | 26.9% | ||||||||||||||
as a percent of revenues | 10.1 | % | 6.2 | % | 390 bps | 7.4 | % | 6.9 | % | 50 bps | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(Unaudited; in millions) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
Cash flows from (used in) operating activities: | ||||||||||||||||
Net income | $ | 3.1 | $ | 330.3 | $ | 27.5 | $ | 419.0 | ||||||||
Less: Income (loss) from discontinued operations, net of tax | (9.4 | ) | 316.4 | (17.1 | ) | 364.4 | ||||||||||
Income from continuing operations | 12.5 | 13.9 | 44.6 | 54.6 | ||||||||||||
Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities: | ||||||||||||||||
Special charges, net | — | (0.1 | ) | 0.1 | 0.7 | |||||||||||
(Gain) loss on change in fair value of equity security | 7.4 | (1.6 | ) | 3.0 | (9.0 | ) | ||||||||||
Deferred and other income taxes | (7.9 | ) | (0.3 | ) | (16.9 | ) | 1.9 | |||||||||
Depreciation and amortization | 11.3 | 12.0 | 36.9 | 31.9 | ||||||||||||
Pension and other employee benefits | 3.7 | — | 10.0 | 1.0 | ||||||||||||
Long-term incentive compensation | 2.1 | 3.4 | 7.7 | 9.4 | ||||||||||||
Other, net | 0.4 | 0.4 | 1.4 | 3.6 | ||||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||||||||||||
Accounts receivable and other assets | (15.9 | ) | 43.6 | (20.9 | ) | 74.9 | ||||||||||
Inventories | (33.5 | ) | (15.3 | ) | (78.4 | ) | (21.6 | ) | ||||||||
Accounts payable, accrued expenses and other | 14.1 | — | (76.5 | ) | (50.6 | ) | ||||||||||
Cash spending on restructuring actions | (0.1 | ) | — | (0.4 | ) | (1.2 | ) | |||||||||
Net cash from (used in) continuing operations | (5.9 | ) | 56.0 | (89.4 | ) | 95.6 | ||||||||||
Net cash from (used in) discontinued operations | (8.1 | ) | 18.9 | (21.1 | ) | 58.2 | ||||||||||
Net cash from (used in) operating activities | (14.0 | ) | 74.9 | (110.5 | ) | 153.8 | ||||||||||
Cash flows from (used in) investing activities: | ||||||||||||||||
Proceeds related to company-owned life insurance policies, net | 3.0 | 4.3 | 4.6 | 8.2 | ||||||||||||
Business acquisitions, net of cash acquired | 1.4 | (38.1 | ) | (40.0 | ) | (120.0 | ) | |||||||||
Capital expenditures | (4.0 | ) | (3.3 | ) | (10.0 | ) | (7.5 | ) | ||||||||
Net cash from (used in) continuing operations | 0.4 | (37.1 | ) | (45.4 | ) | (119.3 | ) | |||||||||
Net cash from (used in) discontinued operations | — | 619.1 | (13.9 | ) | 617.9 | |||||||||||
Net cash from (used in) investing activities | 0.4 | 582.0 | (59.3 | ) | 498.6 | |||||||||||
Cash flows from (used in) financing activities: | ||||||||||||||||
Borrowings under senior credit facilities | 245.0 | 107.1 | 245.0 | 209.1 | ||||||||||||
Repayments under senior credit facilities | (237.4 | ) | (248.7 | ) | (243.7 | ) | (343.6 | ) | ||||||||
Borrowings under trade receivables arrangement | — | 47.0 | — | 179.0 | ||||||||||||
Repayments under trade receivables arrangement | — | (73.0 | ) | — | (207.0 | ) | ||||||||||
Net repayments under other financing arrangements | (0.5 | ) | (0.3 | ) | (0.7 | ) | (0.3 | ) | ||||||||
Payment of contingent consideration | — | — | (1.3 | ) | — | |||||||||||
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options | 0.3 | 0.1 | (4.9 | ) | (3.7 | ) | ||||||||||
Repurchases of common stock | — | — | (33.7 | ) | — | |||||||||||
Financing fees paid | (1.9 | ) | — | (1.9 | ) | — | ||||||||||
Net cash from (used in) continuing operations | 5.5 | (167.8 | ) | (41.2 | ) | (166.5 | ) | |||||||||
Net cash from (used in) discontinued operations | 0.7 | 0.1 | 1.0 | (0.3 | ) | |||||||||||
Net cash from (used in) financing activities | 6.2 | (167.7 | ) | (40.2 | ) | (166.8 | ) | |||||||||
Change in cash and equivalents due to changes in foreign currency exchange rates | (0.5 | ) | 1.8 | 1.3 | 6.2 | |||||||||||
Net change in cash and equivalents | (7.9 | ) | 491.0 | (208.7 | ) | 491.8 | ||||||||||
Consolidated cash and equivalents, beginning of period | 195.2 | 69.1 | 396.0 | 68.3 | ||||||||||||
Consolidated cash and equivalents, end of period | $ | 187.3 | $ | 560.1 | $ | 187.3 | $ | 560.1 | ||||||||
CASH AND DEBT RECONCILIATION | ||||||||||||||||||
(Unaudited; in millions) | ||||||||||||||||||
Nine months ended | ||||||||||||||||||
Beginning cash and equivalents | $ | 396.0 | ||||||||||||||||
Cash used in continuing operations | (89.4 | ) | ||||||||||||||||
Capital expenditures | (10.0 | ) | ||||||||||||||||
Business acquisitions, net of cash acquired | (40.0 | ) | ||||||||||||||||
Proceeds related to company-owned life insurance policies, net | 4.6 | |||||||||||||||||
Payment of contingent consideration | (1.3 | ) | ||||||||||||||||
Borrowings under senior credit facilities | 245.0 | |||||||||||||||||
Repayments under senior credit facilities | (243.7 | ) | ||||||||||||||||
Net repayments under other financing arrangements | (0.7 | ) | ||||||||||||||||
Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options | (4.9 | ) | ||||||||||||||||
Repurchases of common stock | (33.7 | ) | ||||||||||||||||
Financing fees paid | (1.9 | ) | ||||||||||||||||
Cash used in discontinued operations | (34.0 | ) | ||||||||||||||||
Change in cash due to changes in foreign currency exchange rates | 1.3 | |||||||||||||||||
Ending cash and equivalents | $ | 187.3 | ||||||||||||||||
Debt at | Debt at | |||||||||||||||||
Borrowings | Repayments | Other | ||||||||||||||||
Revolving loans | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Term loan | 243.7 | 245.0 | (243.7 | ) | — | 245.0 | ||||||||||||
Trade receivables financing arrangement | — | — | — | — | — | |||||||||||||
Other indebtedness | 3.3 | 0.1 | (0.8 | ) | — | 2.6 | ||||||||||||
Less: Deferred financing costs associated with the term loan | (1.0 | ) | — | — | 0.3 | (0.7 | ) | |||||||||||
Totals | $ | 246.0 | $ | 245.1 | $ | (244.5 | ) | $ | 0.3 | $ | 246.9 | |||||||
NON-GAAP RECONCILIATION - ORGANIC REVENUE | |||||||
HVAC AND DETECTION & MEASUREMENT REPORTABLE SEGMENTS | |||||||
(Unaudited) | |||||||
Three months ended |
|||||||
HVAC | Detection & Measurement |
||||||
Net Revenue Growth | 27.0 | % | 34.1 | % | |||
Exclude: Foreign Currency | (0.6 | ) | % | (4.3 | ) | % | |
Exclude: Acquisitions | 11.3 | % | 14.4 | % | |||
Organic Revenue Growth | 16.3 | % | 24.0 | % | |||
NON-GAAP RECONCILIATION - ADJUSTED SEGMENT INCOME | ||||||||||||||||
(Unaudited; in millions) | ||||||||||||||||
CONSOLIDATED SPX: | Three months ended | Nine months ended | ||||||||||||||
Total segment income | $ | 56.6 | $ | 32.9 | $ | 134.9 | $ | 112.5 | ||||||||
Exclude: Acquisition related costs (1) | (0.1 | ) | (3.3 | ) | (1.1 | ) | (4.9 | ) | ||||||||
Exclude: Amortization expense (2) | (6.7 | ) | (5.5 | ) | (23.1 | ) | (16.0 | ) | ||||||||
Adjusted segment income | $ | 63.4 | $ | 41.7 | $ | 159.1 | $ | 133.4 | ||||||||
as a percent of revenues (3) | 17.1 | % | 14.6 | % | 15.4 | % | 15.3 | % | ||||||||
HVAC REPORTABLE SEGMENT: | ||||||||||||||||
Three months ended | ||||||||||||||||
Segment income | $ | 30.9 | $ | 23.0 | ||||||||||||
Exclude: Amortization expense (2) | (2.2 | ) | (0.6 | ) | ||||||||||||
Adjusted segment income | $ | 33.1 | $ | 23.6 | ||||||||||||
as a percent of segment revenues (3) | 14.5 | % | 13.2 | % | ||||||||||||
DETECTION & MEASUREMENT REPORTABLE SEGMENT: | ||||||||||||||||
Three months ended | ||||||||||||||||
Segment income | $ | 25.7 | $ | 9.9 | ||||||||||||
Exclude: Acquisition related costs (1) | (0.1 | ) | (3.3 | ) | ||||||||||||
Exclude: Amortization expense (2) | (4.5 | ) | (4.9 | ) | ||||||||||||
Adjusted segment income | $ | 30.3 | $ | 18.1 | ||||||||||||
as a percent of segment revenues (3) | 21.2 | % | 17.0 | % | ||||||||||||
(1) Represents (i) additional “Cost of products sold” of |
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(2) Represents amortization expense associated with acquired intangible assets. | ||||||||||||||||
(3) See "Results of Reportable Segments" for applicable percentages based on GAAP results. | ||||||||||||||||
NON-GAAP RECONCILIATION - ADJUSTED OPERATING INCOME | ||||||||||||||||
(Unaudited; in millions) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
Operating income | $ | 37.3 | $ | 17.7 | $ | 75.9 | $ | 59.8 | ||||||||
Include - TSA Income (1) | 0.6 | — | 2.4 | — | ||||||||||||
Exclude: | ||||||||||||||||
Acquisition related and other costs (2) | (3.7 | ) | (4.2 | ) | (13.2 | ) | (8.2 | ) | ||||||||
Impairment of goodwill and intangible assets (3) | — | (24.3 | ) | — | (24.3 | ) | ||||||||||
Other operating income/expense, net (4) | — | 24.3 | (1.0 | ) | 21.6 | |||||||||||
Amortization expense (5) | (6.7 | ) | (5.5 | ) | (23.1 | ) | (16.0 | ) | ||||||||
Adjusted operating income | $ | 48.3 | $ | 27.4 | $ | 115.6 | $ | 86.7 | ||||||||
as a percent of revenues (6) | 13.0 | % | 9.6 | % | 11.2 | % | 10.0 | % | ||||||||
(1) Represents transition services income related to the Transformer Solutions disposition. Amount recorded in non-operating income for |
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(2) For the three and nine months ended |
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(3) For the three and nine months ended |
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(4) For the nine months ended |
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(5) Represents amortization expense associated with acquired intangible assets. |
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(6) See "Results of Reportable Segments" for applicable percentages based on GAAP results. |
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NON-GAAP RECONCILIATION - EARNINGS PER SHARE | |||||||||||
Three Months Ended |
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(Unaudited; in millions, except per share values) | |||||||||||
GAAP | Adjustments | Adjusted | |||||||||
Segment income (1) | $ | 56.6 | $ | 6.8 | $ | 63.4 | |||||
Corporate expense (2) | (17.2 | ) | 5.0 | (12.2 | ) | ||||||
Long-term incentive compensation expense (3) | (2.1 | ) | (0.8 | ) | (2.9 | ) | |||||
Special charges, net | — | — | — | ||||||||
Other operating expense, net | — | — | — | ||||||||
Operating income | 37.3 | 11.0 | 48.3 | ||||||||
Other income (expense), net (4) | (24.6 | ) | 26.4 | 1.8 | |||||||
Interest expense, net | (1.6 | ) | — | (1.6 | ) | ||||||
Loss on amendment/refinancing of senior credit agreement (5) | (1.1 | ) | 1.1 | — | |||||||
Income from continuing operations before income taxes | 10.0 | 38.5 | 48.5 | ||||||||
Income tax (provision) benefit (6) | 2.5 | (13.5 | ) | (11.0 | ) | ||||||
Income from continuing operations | 12.5 | 25.0 | 37.5 | ||||||||
Diluted shares outstanding | 46.132 | 46.132 | |||||||||
Earnings per share from continuing operations | $ | 0.27 | $ | 0.81 | |||||||
(1) Adjustment represents the removal of (i) amortization expense associated with acquired intangible assets ( |
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(2) Adjustment represents the removal of acquisition and strategic/transformation related expenses ( |
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(3) Adjustment represents the removal of a benefit of |
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(4) Adjustment represents the removal of (i) asbestos-related charges ( |
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(5) Adjustment represents the removal of a non-cash charge and certain expenses incurred in connection with an amendment to our senior credit agreement. | |||||||||||
(6) Adjustment represents the tax impact of items (1) through (5) above and removal of certain non-recurring income tax benefits. | |||||||||||
NON-GAAP RECONCILIATION - EARNINGS PER SHARE | |||||||||||
Three Months Ended |
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(Unaudited; in millions, except per share values) | |||||||||||
GAAP | Adjustments | Adjusted | |||||||||
Segment income (1) | $ | 32.9 | $ | 8.8 | $ | 41.7 | |||||
Corporate expense (2) | (11.9 | ) | 0.9 | (11.0 | ) | ||||||
Long-term incentive compensation expense | (3.4 | ) | — | (3.4 | ) | ||||||
Impairment of goodwill and intangible assets (3) | (24.3 | ) | 24.3 | — | |||||||
Special charges, net | 0.1 | — | 0.1 | ||||||||
Other operating income, net (4) | 24.3 | (24.3 | ) | — | |||||||
Operating income | 17.7 | 9.7 | 27.4 | ||||||||
Other income, net (5) | 3.8 | (2.4 | ) | 1.4 | |||||||
Interest expense, net (6) | (3.4 | ) | 0.1 | (3.3 | ) | ||||||
Income from continuing operations before income taxes | 18.1 | 7.4 | 25.5 | ||||||||
Income tax provision (7) | (4.2 | ) | (0.6 | ) | (4.8 | ) | |||||
Income from continuing operations | 13.9 | 6.8 | 20.7 | ||||||||
Diluted shares outstanding | 46.650 | 46.650 | |||||||||
Earnings per share from continuing operations | $ | 0.30 | $ | 0.44 | |||||||
(1) Adjustment represents the removal of (i) amortization expense associated with acquired intangible assets ( |
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(2) Adjustment represents the removal of acquisition related expenses incurred during the period ( |
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(3) Adjustment represents the removal of non-cash charges related to the impairment of certain goodwill and intangible assets. | |||||||||||
(4) Adjustment represents the removal of a gain ( |
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(5) Adjustment represents the removal of (i) a gain on an equity security associated with a fair value adjustment ( |
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(6) Adjustment relates to the removal of amounts associated with the write-off of deferred finance costs in connection with a reduction of our foreign credit facilities primarily used to support our |
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(7) Adjustment primarily represents the tax impact of items (1) through (6) above and the removal of certain non-recurring income tax charges. |
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Source: SPX Technologies