News

Feb 13, 2024

SPX Technologies Reports Second Quarter 2023 Results

Q2 GAAP EPS of $0.82 ; Adjusted EPS* of $1.06 Raising Full-Year 2023 Adjusted EPS* Guidance to Range of $4.15-4.30 CHARLOTTE, N.C., Aug. 02, 2023 (GLOBE NEWSWIRE) -- SPX Technologies, Inc. (NYSE:SPXC)

Q2 GAAP EPS of $0.82 ; Adjusted EPS* of $1.06 Raising Full-Year 2023 Adjusted EPS* Guidance to Range of $4.15-4.30

CHARLOTTE, N.C., Aug. 02, 2023 (GLOBE NEWSWIRE) -- SPX Technologies, Inc. (NYSE:SPXC) (“SPX”, the “Company”, “we” or “our”) today reported results for the second quarter ended July 1, 2023.

Gene Lowe, President and CEO, remarked, “I am very pleased with our Q2 and year-to-date results, which were driven by overall strong demand and execution. Our HVAC Cooling platform, in particular, continued to achieve strong performance facilitated by our investments in efficiency and continuous improvement, and benefited from a high level of backlog and more stable labor and supply chain conditions.”

Mr. Lowe continued, “Considering our strong year-to-date results and outlook, we are raising our full-year 2023 guidance for Adjusted EPS* to a range of $4.15-$4.30, reflecting year-over-year growth at the midpoint of approximately 36%.”

Mr. Lowe further commented, “With a strong backlog, solid order trends, and outstanding operational performance in our plants, I feel confident in our ability to achieve our updated guidance and to continue progressing toward our ‘SPX 2025’ target of $5 per share of Adjusted EPS*.”

Second Quarter 2023 Overview:

For the second quarter of 2023, the company reported revenue of $423.3 million and operating income of $51.3 million, compared with revenue of $354.0 million and operating income of $27.2 million in the second quarter of 2022. Diluted income per share from continuing operations in the second quarter of 2023 was $0.82, compared with $0.41 in the second quarter of 2022.

Adjusted operating income* was $69.4 million, compared with $42.2 million in the second quarter of 2022. Adjusted earnings per share* in the second quarter of 2023 was $1.06, compared with $0.71 in the second quarter of 2022. Adjusted operating income* and Adjusted earnings per share* exclude amortization expense, and acquisition and strategic transformation-related costs, among other items.

Second Quarter and Year-to-Date Financial Comparisons:

* Non-GAAP financial measure. See attached schedules for reconciliation of each historical non-GAAP measure to the respective most comparable GAAP financial measure.

HVAC Segment

Revenue for the second quarter of 2023 was $269.0 million, compared with $218.7 million in the second quarter of 2022, an increase of 23.0%, including a 15.0% increase in organic revenue, a 8.6% increase from the acquisitions of TAMCO and ASPEQ, and a 0.6% unfavorable impact related to the translation effect of currency fluctuation. The organic increase in revenue was associated with price increases, and volume increases resulting from greater plant throughput and more stable labor and supply chain environments.

Segment income in the second quarter of 2023 was $55.2 million, or 20.5% of revenue. This compares with segment income of $28.3 million, or 12.9% of revenue in the second quarter of 2022. The increase in segment income and 760 basis points increase in segment income margin were primarily due to price increases and greater absorption of manufacturing costs resulting from the higher volumes and more stable labor and supply chain environments.

Detection & Measurement Segment

Revenue for the second quarter of 2023 was $154.3 million, compared with $135.3 million in the second quarter of 2022, an increase of 14.0%. This increase, all of which was organic, was primarily due to the execution of large projects within the communication technologies, transportation and aids to navigation businesses.

Segment income for the second quarter of 2023 was $29.2 million, or 18.9% of revenue. This compares with segment income of $27.8 million, or 20.5% of revenue in the second quarter of 2022. The increase in segment income was due to the higher revenue noted above. The decrease of 160 basis points in segment income margin was primarily due to less favorable sales mix resulting from the higher volume of large project revenues.

Financial Update: As of July 1, 2023, SPX Technologies had total outstanding debt of $675.6 million and total cash of $95.6 million. During the second quarter of 2023, SPX’s net operating cash flow from continuing operations totaled $73.8 million. Capital expenditures for continuing operations for the second quarter of 2023 were $4.7 million.

2023 Guidance Update:

SPX is updating full-year 2023 guidance, and is now targeting consolidated revenue of approximately $1.72-$1.75 billion ($1.68-$1.72 billion prior), an adjusted operating income margin* of approximately 16.00%-16.25% (15.00%-15.75% prior), and adjusted earnings per share* in a range of $4.15-$4.30 ($3.90-$4.05 prior).

Segment and company performance is expected to be as follows:

Form 10-Q: The company expects to file its quarterly report on Form 10-Q for the quarter ended July 1, 2023 with the Securities and Exchange Commission on or before August 10, 2023. This press release should be read in conjunction with that filing, which will be available on the company's website at www.spx.com, in the Investor Relations section.

Conference Call : SPX Technologies will host a conference call at 4:45 p.m. (EDT) today to discuss second quarter results. The call will be simultaneously webcast via the company's website at www.spx.com and the slide presentation will be available in the Investor Relations section of the site.

Call Access: To access the call by phone, please go to this link https://register.vevent.com/register/BId6ac9e388ea7423cb9d1e2d994018d6d and you will be provided with 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 for a limited time at www.spx.com.

Upcoming Investor Events: Company management plans to conduct virtual meetings with investors during the third quarter of 2023 and the company will also be participating virtually in the Seaport Annual Summer Conference on August 23rd and the Jefferies Industrial Conference in New York on September 6th.

About SPX Technologies, Inc.: SPX Technologies, Inc. is a diversified, global supplier of highly engineered products and technologies, holding leadership positions in the HVAC and detection and measurement markets. Based in Charlotte, North Carolina, SPX Technologies, Inc. has more than 4,000 employees in 15 countries. SPX Technologies, Inc. is listed on the New York Stock Exchange under the ticker symbol “SPXC.” For more information, please visit www.spx.com.

Non-GAAP Financial Information: This press release contains certain non-GAAP financial measures, including total segment income, adjusted operating income, adjusted income from continuing operations before income taxes, adjusted income from continuing operations, adjusted earnings per share from continuing operations (or, adjusted EPS) and organic revenue growth. These non-GAAP financial measures do not provide investors with an accurate measure of, and should not be used as a substitute for, the comparable financial measures as determined in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company believes these non-GAAP financial measures, when read in conjunction with the comparable GAAP financial measures, give investors a useful tool to assess and understand the Company’s overall financial performance, because they exclude items of income or expense that the Company believes are not reflective of its ongoing operating performance, allowing for a better period-to-period comparison of operations of the Company. Additionally, the Company’s management uses these non-GAAP financial measures as measures of the Company’s performance. The Company acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.

Refer to the tables included in this press release for the components of each of the non-GAAP financial measures, and for the reconciliations of historical non-GAAP financial measures to their respective comparable GAAP measures. 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 second quarter, the impact of foreign exchange rate changes subsequent to the end of the second quarter, and environmental and litigation charges.

Forward Looking Statements: 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. Please read these results in conjunction with the Company’s documents filed with the Securities and Exchange Commission, including the Company’s most recent annual report on Form 10-K. These filings identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements, including the following: cyclical changes and specific industry events in the Company’s markets; changes in anticipated capital investment and maintenance expenditures by customers; availability, limitations or cost increases of raw materials and/or commodities that cannot be recovered in product pricing; the impact of competition on profit margins and the Company’s ability to maintain or increase market share; inadequate performance by third-party suppliers and subcontractors for outsourced products, components and services and other supply-chain risks; the uncertainty of claims resolution with respect to the large power projects in South Africa, as well as claims with respect to, environmental and other contingent liabilities; the impact of climate change and any legal or regulatory actions taken in response there to; cyber-security risks; risks with respect to the protection of intellectual property, including with respect to the Company’s digitalization initiatives; the impact of overruns, inflation and the incurrence of delays with respect to long-term fixed-price contracts; defects or errors in current or planned products; the impact of the pandemic and governmental and other actions taken in response; domestic economic, political, legal, accounting and business developments adversely affecting the Company’s business, including regulatory changes; changes in worldwide economic conditions; uncertainties with respect to SPX Technologies’ ability to identify acceptable acquisition targets; uncertainties surrounding timing and successful completion of any announced acquisition or disposition transactions, including with respect to integrating acquisitions and achieving cost savings or other benefits from acquisitions; the impact of retained liabilities of disposed businesses; potential labor disputes; and extreme weather conditions and natural and other disasters.

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 Technologies disclaims any responsibility to update or revise such statements, except as required by law.

SOURCE SPX Technologies, Inc.

Investor and Media Contacts: Paul Clegg, VP, Investor Relations and Communications Garrett Roelofs, Assistant Manager, Investor Relations Phone: 980-474-3806 E-mail: [email protected] Source: SPX Technologies, Inc.