SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 12, 2002 SPX CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-6498 38-1016240 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation or organization) Identification No.) 2300 One Wachovia Center Charlotte, NC 28202-6039 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (704) 347-6800 700 Terrace Point Drive Muskegon, Michigan 49443 -------------------------------------------------------------------- (Former name or former address, if changed since last report.)
Item 5. Other Events. On February 12, 2002, we issued the press release filed as Exhibit 99.1 hereto and incorporated herein by reference. Item 7. Financial Statements Pro Forma Financial Information and Exhibits. (c) Exhibits. 99.1 Press Release issued February 12, 2002
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SPX CORPORATION Date: February 19, 2002 By: /s/ Patrick J. O'Leary ----------------------------------------- Patrick J. O'Leary Vice President Finance, Treasurer and Chief Financial Officer
INDEX TO EXHIBITS Exhibit Number Description - ------ ----------- 99.1 Press Release issued February 12, 2002
EXHIBIT 99.1 Contact: Charles A. Bowman 800-727-1779 E-mail: investor@spx.com SPX REPORTS 2001 FOURTH QUARTER AND FULL YEAR RESULTS Reported Fourth Quarter 2001 Free Cash Flow From Operations 296% of Net Income; Full Year 168% CHARLOTTE, NC - February 12, 2002 - SPX Corporation (NYSE:SPW) today announced fourth quarter 2001 financial results of $1.3 billion in revenues and earnings per share of $1.58 or $2.04 before unusual items. Reported fourth quarter 2001 results include $24.4 million in special charges and unusual gains. Commenting on the company's fourth quarter results, John B. Blystone, Chairman, President and CEO said, "We continue to meet our commitments and targets in an extremely difficult economic environment. The quality of our reported earnings is clearly reflected in our cash flow performance. The SPX Value Improvement Process(R) has been and will continue to be applied to our businesses to create value for our shareholders." FINANCIAL HIGHLIGHTS: - -------------------- Earnings Per Share: Reported fourth quarter earnings of $1.58 per share include - ------------------ net unusual items of $0.46 described below. Without the impact of the unusual items earnings per share was $2.04 for the fourth quarter, a 22.9% improvement compared to $1.66 per share in the fourth quarter of 2000. Fourth quarter reported earnings per share include the following: . A $40.0 million pretax special charge, $28.1 million after-tax or $0.68 per share primarily associated with special charges at our Inrange Technologies subsidiary and facility consolidations within the SPX Valves business. . A $15.6 million pretax gain, $9.3 million after-tax or $0.22 per share associated with the Snap-On arbitration award and other legal matters. This gain is included in SG&A on the income statement as required by GAAP.
. Fourth quarter 2001 earnings per share, without the impact of these items, was $2.04, exceeding First Call's consensus estimate of $2.03. The reported twelve months 2001 earnings per share of $4.67 includes unusual gains and special charges of $1.73 per share. Without the unusual gains and special charges, earnings per share was $6.40, an 8.3% improvement over the comparable twelve months 2000 earnings per share of $5.91.
Revenues: Reported revenues for the fourth quarter grew by 83.9% to $1.3 billion - -------- compared with fourth quarter 2000 revenues of $710.9 million. Full year revenues grew by 53.6% to $4.1 billion compared with full year 2000 revenues of $2.7 billion. Pro forma revenue for 2001 had SPX owned UDI since January 1, 2001 is $5.0 billion. The following schedule summarizes internal growth by segment for the fourth quarter and the full year: Fourth Quarter Full Year ---------------------------------- ------------------------------- Pro Forma Pro Forma Including Including Revenue Growth By Segment Reported Internal UDI Reported Internal UDI - ------------------------- -------- -------- --------- -------- -------- --------- Technical Products and Systems 64.9% 9.6% 4.1% 42.8% 8.4% 6.8% Industrial Products and Services 83.0% 13.4% 2.0% 55.8% 7.2% -0.9% Flow Technology 314.6% 2.0% 0.7% 218.2% 1.0% -1.7% Service Solutions -1.0% -16.7% -14.4% -4.2% -14.0% -12.1% -------------------------------- ------------------------------- Consolidated 83.9% 3.0% -0.7% 53.6% 1.2% -1.5% - - Technical Products and Systems reported revenues for the fourth quarter ------------------------------ 2001 of $376.4 million. In this segment revenue growth was the result of strong sales of automated fare collection systems, digital broadcast antennas and life science equipment. - - Industrial Products and Services reported revenues for the fourth quarter -------------------------------- 2001 of $402.4 million. Revenues in this segment were driven by strong internal growth at Waukesha Electric, the company's power systems business. Demand for high-tech castings and engineered components was also strong during the quarter. - - Flow Technology reported revenues for the fourth quarter of $352.4 million. -------------- Strong sales of cooling towers, cast iron boilers and valves led sales in the Flow Technology segment. - - Service Solutions reported revenues for the fourth quarter 2001 of $175.9 ----------------- million. Internal revenue growth was impacted by changes in the launch timing for special tool programs and completion of the Worldwide Diagnostic System (WDS) program for Ford. This segment will benefit in 2002 from cost savings initiatives launched in 2001.
Operating Margins: Fourth quarter operating margins, excluding special charges, - ----------------- increased 200 basis points to 13.5%, compared to 11.7% for the pro forma fourth quarter 2000. This increase was a result of UDI cost reduction initiatives and actions to properly size the businesses in the current economic environment. Fourth Quarter Full Year -------------- --------- Reported Reported Pro Forma Reported Reported Pro Forma Operating Margin By Segment 2001 2000 2000 2001 2000 2000 - --------------------------- ---- ------ ---- ---- ----- ---- Technical Products and Systems 17.9% 20.4% 18.8% 15.7% 19.5% 17.8% Industrial Products and Services 13.5% 19.1% 12.0% 13.4% 17.5% 12.9% Flow Technology 16.6% 10.7% 11.4% 14.9% 12.3% 9.5% Service Solutions* 7.0% 9.6% 9.7% 7.9% 9.8% 9.5% Consolidated* 13.5% 14.8% 11.7% 12.3% 14.2% 11.2% *For comparison purposes margins exclude the $15.6 million gain from the Snap-On arbitration award. Cash Flow: The company generated EBIT of $184.9 million and EBITDA of $235.7 million for the fourth quarter 2001, compared to EBIT of $112.8 million and EBITDA of $140.2 million for the fourth quarter 2000 excluding unusual items. The company generated EBIT of $545.3 million and EBITDA of $720.2 million for the full year, compared to EBIT of $412.6 million and EBITDA of $523.5 million for the full year 2000 excluding unusual items. . Fourth quarter net cash from operations of $255.6 million, less capital spending of $36.6 million, plus $29.4 million of cash restructuring costs, resulted in free cash from operations of $248.4 million or 296.4% of net income excluding unusual items. Full year net cash from operations of $492.2 million, less capital spending of $150.0 million, plus $55.0 million of cash restructuring costs, resulted in free cash from operations of $397.2 million or 167.5% of net income excluding unusual items. . Fourth quarter 2001 EBITDA margins were 18.0% compared to 16.4% for pro forma fourth quarter 2000. . Non-cash earnings from pension plans was $8.7 million for the fourth quarter compared to $11.1million for the fourth quarter 2000, and $37.1 million for the full year 2001 compared to $44.5 for the year. . There were no stock repurchases during the quarter.
2002 Guidance: Based on strong performance of certain businesses and the - ------------- increased savings from cost reduction actions, the company is comfortable with the Q1 2002 First Call consensus earnings estimate of $1.62 per share and the full year 2002 First Call consensus earnings estimate of $8.76 per share excluding goodwill and other intangible amortization. SPX Corporation is a global provider of technical products and systems, industrial products and services, flow technology and service solutions. The Internet address for SPX Corporation's home page is www.spx.com. Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. Please refer to the Company's public filings for discussion of certain important factors that relate to forward-looking statements contained in this press release. In addition, the Company's future results may be affected by the impact of events flowing from the September 11, 2001 terrorist attacks. The words "believe," "expect," "anticipate," "estimate," "guidance," "target" and similar expressions identify forward-looking statements. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
SPX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($ in millions) December 31, December 31, 2001 2000 ------------ ------------ ASSETS Current assets: Cash and equivalents $ 460.0 $ 73.7 Accounts receivable 976.2 547.7 Inventories 625.5 299.6 Prepaid and other current assets 130.7 57.7 Deferred income taxes and refunds 236.6 84.2 ---------- ---------- Total current assets 2,429.0 1,062.9 Property, plant and equipment 1,279.2 884.7 Accumulated depreciation (439.7) (392.7) ---------- ---------- Net property, plant and equipment 839.5 492.0 Goodwill and intangible assets, net 3,061.7 1,211.8 Other assets 749.9 397.9 ---------- ---------- Total assets $ 7,080.1 $ 3,164.6 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 514.3 $ 289.4 Accrued expenses 856.9 347.7 Current maturities of long-term debt 161.6 137.5 ---------- ---------- Total current liabilities 1,532.8 774.6 Long-term debt 2,450.8 1,158.1 Deferred income taxes 752.6 403.4 Other long-term liabilities 603.6 192.1 ---------- ---------- Total long-term liabilities 3,807.0 1,753.6 Minority Interest 25.0 28.2 Shareholders' equity: Common stock 416.5 357.7 Paid-in capital 1,139.0 492.5 Retained earnings 350.8 177.8 Unearned compensation -- (9.5) Accumulated other comprehensive loss (90.5) (23.0) Common stock in treasury (100.5) (387.3) ---------- ---------- Total shareholders' equity 1,715.3 608.2 ---------- ---------- Total liabilities and shareholders' equity $ 7,080.1 $ 3,164.6 ========== ==========
SPX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME ($ in millions, except per share data) Three months ended Twelve months ended December 31, December 31, ---------------------- ------------------------ 2001 2000 2001 2000 ----------- --------- ---------- ----------- Revenues $ 1,307.1 $ 710.9 $ 4,114.3 $ 2,678.9 Costs and expenses: Cost of products sold 858.0 470.0 2,761.6 1,776.7 Selling, general and administrative 233.6 125.3 775.1 495.2 Goodwill/intangible amortization 22.9 10.6 69.4 40.0 Special charges 40.0 5.4 87.9 90.9 ----------- --------- ---------- ----------- Operating income 152.6 99.6 420.3 276.1 Gain on issuance of Inrange stock - - - 98.0 Other (expense) income, net (0.2) 0.4 (7.6) 22.2 Equity earnings in joint ventures 8.1 7.4 35.0 34.3 Interest expense, net (39.1) (24.4) (133.7) (95.0) ----------- --------- ---------- ----------- Income before income taxes 121.4 83.0 314.0 335.6 Provision for income taxes (56.4) (33.7) (141.0) (137.3) ----------- --------- ---------- ----------- Income before loss on early extinguishment of debt 65.0 49.3 173.0 198.3 Loss on early extinguishment of debt, net of tax - - - (8.8) ----------- --------- ---------- ----------- Net income $ 65.0 $ 49.3 $ 173.0 $ 189.5 =========== ========= ========== =========== Basic income per share of common stock Income before loss on early extinguishment of debt $ 1.61 $ 1.61 $ 4.77 $ 6.44 Loss on early extinguishment of debt - - - (0.29) ----------- --------- ---------- ----------- Net income per share $ 1.61 $ 1.61 $ 4.77 $ 6.15 =========== ========= ========== =========== Weighted average number of common shares outstanding 40.339 30.561 36.308 30.796 Diluted income per share of common stock Income before loss on early extinguishment of debt $ 1.58 $ 1.56 $ 4.67 $ 6.25 Loss on early extinguishment of debt - - - (0.28) ----------- --------- ---------- ----------- Net income per share $ 1.58 $ 1.56 $ 4.67 $ 5.97 =========== ========= ========== =========== Weighted average number of common shares outstanding 41.172 31.629 37.060 31.751
SPX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in millions) Twelve months ended December 31, ---------------------------- 2001 2000 ------------- ----------- Cash flows from (used in) operating activities: Net income $ 173.0 $ 189.5 Adjustments to reconcile net income to net cash from operating activities - Loss on sale of businesses 11.8 - Special charges 101.4 103.2 Loss on early extinguishment of debt, net of tax - 8.8 Gain on issuance of Inrange Stock - (98.0) Deferred income taxes 103.4 107.6 Depreciation 91.5 64.3 Amortization of goodwill and intangibles 83.4 46.6 Employee benefits (34.1) (38.1) Other, net (6.7) (9.7) Changes in operating assets and liabilities, net of effects from acquisitions and divestitures: Accounts receivable and other (66.6) (46.8) Inventories 47.0 (15.1) Accounts payable, accrued expenses and other 43.1 (43.3) Accrued restructuring liabilities (55.0) (28.8) Taxes paid on the sale of Best Power - (69.0) ------------- ----------- Net cash from operating activities 492.2 171.2 Cash flows from (used in) investing activities: Proceeds from business divestitures 182.9 - Business acquisitions and investments, net of cash acquired (528.1) (220.8) Capital expenditures (150.0) (123.3) Other, net (22.5) (10.2) ------------- ----------- Net cash used in investing activities (517.7) (354.3) Cash flows from (used in) financing activities: Net borrowings under revolving credit agreement - 155.0 Borrowings under other debt agreements 1,746.7 509.9 Payments under other debt agreements (1,333.2) (484.0) Debt issuance fees paid (46.6) (7.5) Proceeds from Issuance of Inrange Stock - 128.2 Treasury stock purchased - (138.8) Common stock issued under stock incentive programs 44.9 15.2 Cash flows from (used in) operating activities: ------------- ----------- Net cash from financing activities 411.8 178.0 Cash flows from (used in) operating activities: ------------- ----------- Net increase (decrease) in cash and equivalents 386.3 (5.1) Cash and equivalents, beginning of period 73.7 78.8 ------------- ----------- Cash and equivalents, end of period $ 460.0 $ 73.7 ============= ===========
SPX CORPORATION AND SUBSIDIARIES RECONCILIATION OF RESULTS ON A COMPARABLE BASIS EXCLUDING UNUSUAL ITEMS ($ in millions, except per share amounts) Three months ended Twelve months ended December 31, December 31, ----------------------------- ----------------------- 2001 2000 2001 2000 ---- ---- ---- ---- Income before income taxes $ 121.4 $ 83.0 $ 314.0 $ 335.6 Special charges and gains: Restructuring and other special charges (1) (2) 40.0 5.4 101.4 103.2 Loss on sale of GSE - - 11.8 - Gain on issuance of Inrange stock - - - (98.0) Gain on settlement of Snap-On arbitration / APC litigation (15.6) - (15.6) (23.2) --------------------------- ------------------------- Pretax income excluding unusual items 145.8 88.4 411.6 317.6 Income taxes (1) (62.0) (35.9) (174.4) (129.9) --------------------------- ------------------------- Net income from continuing operations excluding unusual items $ 83.8 $ 52.5 $ 237.2 $ 187.7 =========================== ========================= Diluted EPS from continuing operations excluding unusual items $ 2.04 $ 1.66 $ 6.40 $ 5.91 =========================== ========================= Shares Outstanding 41.172 31.629 37.060 31.751 (1) 2001 twelve month reported effective tax rate of 44.9% is higher than reconciliation effective rate due to restructuring actions recorded at lower marginal tax rates. (2) For the twelve months ended December 31, 2001 and 2000, special charges of $13.5 and $12.3 have been reported in cost of products sold.
SPX CORPORATION AND SUBSIDIARIES RESULTS OF OPERATING INCOME BY SEGMENT ($ in millions) Three months ended Twelve months ended December 31, December 31, ------------------ ------------------- 2001 2000 (1) % 2001 2000(1) % ---- ------- - ---- ------- - Technical Products and Systems Revenues $ 376.4 $ 228.3 64.9% $ 1,137.9 $ 796.8 42.8% Gross profit 166.0 105.3 487.0 352.4 Selling, general & administrative 92.9 57.1 293.3 193.1 Goodwill/intangible amortization 5.6 1.6 15.1 4.1 ------- ------- --------- -------- Operating income $ 67.5 $ 46.6 44.8% $ 178.6 $ 155.2 15.1% ======= ======= ========= ======== as a percent of revenues 17.9% 20.4% 15.7% 19.5% Industrial Products and Services Revenues $ 402.4 $ 219.9 83.0% $ 1,391.4 $ 893.3 55.8% Gross profit 106.3 67.6 361.4 262.1 Selling, general & administrative 44.4 21.0 148.7 86.1 Goodwill/intangible amortization 7.6 4.7 26.2 19.3 ------- ------- --------- -------- Operating income $ 54.3 $ 41.9 29.6% $ 186.5 $ 156.6 19.1% ======= ======= ========= ======== as a percent of revenues 13.5% 19.1% 13.4% 17.5% Flow Technology Revenues $ 352.4 $ 85.0 314.6% $ 912.5 $ 286.8 218.2% Gross profit 126.2 25.5 323.5 102.0 Selling, general & administrative 62.8 16.3 176.9 66.7 Goodwill/intangible amortization 5.0 0.1 10.6 0.1 ------- ------- --------- -------- Operating income $ 58.4 $ 9.1 541.8% $ 136.0 $ 35.2 286.4% ======= ======= ========= ======== as a percent of revenues 16.6% 10.7% 14.9% 12.3% Service Solutions Revenues $ 175.9 $ 177.7 -1.0% $ 672.5 $ 702.0 -4.2% Gross profit 50.6 42.5 194.3 198.0 Selling, general & administrative 18.0 21.1 108.3 112.5 Goodwill/intangible amortization 4.7 4.2 17.5 16.5 ------- ------- --------- -------- Operating income $ 27.9 $ 17.1 63.2% $ 68.5 $ 68.9 -0.6% ======= ======= ========= ======== as a percent of revenues (2) 15.9% 9.6% 10.2% 9.8% Corporate expenses $ 15.5 $ 9.8 $ 47.9 $ 36.8 Consolidated operating margins 14.7% 14.8% 12.7% 14.2% Consolidated operating margins excluding Snap-On gain 13.5% 14.8% 12.3% 14.2% (1) Year 2000 results represent the SPX businesses before the acquisition of UDI. (2) Excluding the $15.6 gain on the Snap-On arbitration award, operating margins for Service Solutions for the three and twelve months ended December 31, 2001 were 7.0% and 7.9% respectively. (3) All amounts exclude special charges, including those recorded in cost of products sold.
SPX CORPORATION AND SUBSIDIARIES FREE CASH FLOW AS % OF NET INCOME ($ in millions) 2001 1Q 2Q 3Q Q4 Year --------------------------------------------------- Cash flow from operations (GAAP) $ 19.0 $ 96.9 $ 120.7 $ 255.6 $ 492.2 Capital expenditures 33.0 48.0 32.4 36.6 150.0 --------------------------------------------------- Free cash flow before restructuring (14.0) 48.9 88.3 219.0 342.2 --------------------------------------------------- Cash restructuring 4.2 4.5 16.9 29.4 55.0 --------------------------------------------------- Normalized free cash flow (9.8) 53.4 105.2 248.4 397.2 --------------------------------------------------- Net income (excluding unusuals) $ 37.4 $ 54.4 $ 61.6 $ 83.8 $ 237.2 Net income reported $ 35.4 $ 13.4 $ 59.2 $ 65.0 $ 173.0 % of net income (excluding unusuals) NM 98.2% 170.8% 296.4% 167.5% % of net income reported NM 364.9% 149.2% 336.9% 197.8% NM=Not Meaningful Three Year Average - Free Cash Flow as % of Net Income Three Year 1999 2000* 2001 Average ----------------------------------------- Cash flow from operations (GAAP) $ 211.8 $ 240.2 $ 492.2 $ 314.7 Capital expenditures 102.0 123.3 150.0 125.1 ----------------------------------------- Free cash flow before restructuring 109.8 116.9 342.2 189.6 ----------------------------------------- Cash restructuring 33.0 28.8 55.0 38.9 ----------------------------------------- Normalized free cash flow 142.8 145.7 397.2 228.6 ----------------------------------------- Net income (excluding unusuals) $ 157.1 $ 187.7 $ 237.2 $ 194.0 Net income reported $ 101.5 $ 189.5 $ 173.0 $ 154.7 % of net income (excluding unusuals) 90.9% 77.6% 167.5% 117.8% % of net income reported 108.2% 61.7% 197.8% 122.6% * excludes taxes on the sale of Best Power
SPX CORPORATION AND SUBSIDIARIES CASH RECONCILIATION ($ in millions) Three months Twelve months ended ended 12/31/01 12/31/01 ------------ ------------- Beginning cash $ 340.5 $ 73.7 Operational cash flow 255.6 492.2 Proceeds from business divestitures 19.9 182.9 Acquisition of UDI, net of cash acquired - (49.6) Acquisition of Kendro, net of cash acquired - (320.0) Other acquisitions (24.6) (158.5) Capital expenditures (36.6) (150.0) Net borrowings/payments (104.6) 413.5 Other equity issuances 16.3 44.9 Debt issuance fees - (46.6) Other (6.5) (22.5) ----------- ------------ Ending cash $ 460.0 $ 460.0 =========== ============ Ending LYONS Ending Debt Net Debt Discount Debt 12/31/2000 Change Acquired Accretion 12/31/2001 ------------ ------------- ------------- ------------ ------------ Revolver 220.0 (220.0) - Tranche A 525.0 (131.3) 393.7 Tranche B 496.3 (6.3) 490.0 Tranche C 823.0 823.0 February LYONS 576.2 14.7 590.9 May LYONS 240.3 4.5 244.8 IRB 16.1 (15.1) 1.0 Medium-term notes 25.0 (25.0) - Debt acquired from UDI (843.0) 884.1 41.1 Other 13.2 14.7 27.9 ----------- ------------ ----------- ---------- ---------- Totals $ 1,295.6 $ 413.5 $ 884.1 $ 19.2 $ 2,612.4 =========== ============ =========== ========== ==========