SPX(SPXC) - 2024 Q2 - Quarterly Results

Performance Highlights and Management Commentary SPX Technologies reported strong Q2 2024 results with substantial profit growth and margin expansion, leading to raised full-year 2024 Adjusted EPS guidance - Management expressed satisfaction with the strong Q2 performance, noting significant growth in profit, margin expansion in both segments, solid market demand, and good operational execution[1] - The company raised its full-year 2024 Adjusted EPS guidance to a new range of $5.45-$5.60, up from the previous $5.15-$5.40[1] Q2 2024 Key Performance Indicators | Indicator | Q2 2024 Value ($) | | :--- | :--- | | GAAP EPS | $0.96 | | Adjusted EPS* | $1.42 | Financial and Operational Overview SPX achieved significant Q2 2024 growth in revenue and operating income, driven by HVAC, while Detection & Measurement improved margins despite a revenue dip Consolidated Results Consolidated Q2 2024 financials show strong year-over-year growth in revenue, operating income, and net income - Q2 2024 results included an $8.4 million charge related to a settlement with the seller of ULC Robotics regarding contingent consideration[2] Q2 2024 vs Q2 2023 Consolidated Financials (Millions $) | Metric | Q2 2024 (Millions $) | Q2 2023 (Millions $) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $501.3 | $423.3 | +18.4% | | Operating Income | $74.6 | $51.3 | +45.4% | | Net Income | $44.2 | $36.0 | +22.8% | | Adjusted EBITDA* | $108.9 | $75.1 | +45.0% | | Diluted EPS | $0.96 | $0.82 | +17.1% | | Adjusted EPS* | $1.42 | $1.06 | +34.0% | HVAC Segment Performance The HVAC segment demonstrated robust Q2 2024 growth in revenue and segment income, driven by organic sales and acquisitions - Revenue growth was driven by a 17.7% increase in organic revenue (from higher cooling product sales and a large service project) and a 15.0% increase from the acquisitions of Ingénia and ASPEQ[4] HVAC Segment Q2 Performance (Millions $) | Metric | Q2 2024 (Millions $) | Q2 2023 (Millions $) | Change | | :--- | :--- | :--- | :--- | | Revenue | $356.5 | $269.0 | +32.5% | | Segment Income | $83.7 | $55.2 | +51.6% | | Segment Income Margin | 23.5% | 20.5% | +300 bps | Detection & Measurement Segment Performance Despite a revenue decrease, the Detection & Measurement segment significantly improved its Q2 2024 margin due to a favorable product mix - The organic revenue decrease was primarily due to higher large project volume in the communication technologies business in the prior-year quarter[4] - The significant margin expansion was driven by a more favorable product mix from large projects and efficiency initiatives[5] Detection & Measurement Segment Q2 Performance (Millions $) | Metric | Q2 2024 (Millions $) | Q2 2023 (Millions $) | Change | | :--- | :--- | :--- | :--- | | Revenue | $144.8 | $154.3 | -6.2% | | Segment Income | $33.9 | $29.2 | +16.1% | | Segment Income Margin | 23.4% | 18.9% | +450 bps | Financial Position SPX Technologies maintained a solid financial position as of June 29, 2024, with substantial cash and managed debt levels Financial Position as of June 29, 2024 (Millions $) | Item | Amount (Millions $) | | :--- | :--- | | Total Outstanding Debt | $790.3 | | Total Cash | $133.0 | | Q2 Net Operating Cash Flow | $58.7 | | Q2 Capital Expenditures | $10.4 | Full-Year 2024 Guidance Update SPX Technologies raised its full-year 2024 guidance for Adjusted EBITDA, Adjusted EPS, and segment income margins, reflecting positive operational momentum Full-Year 2024 Consolidated Guidance Update (Millions $, except EPS) | Metric | New Guidance | Prior Guidance | | :--- | :--- | :--- | | Consolidated Revenue | $1,970 - $2,020 | $1,965 - $2,025 | | Adjusted EBITDA* | $410 - $430 | $390 - $420 | | Adjusted EPS* | $5.45 - $5.60 | $5.15 - $5.40 | Full-Year 2024 Segment Guidance Update | Segment | Metric | New Guidance | Prior Guidance | | :--- | :--- | :--- | :--- | | HVAC | Revenue (Millions $) | $1,365 - $1,405 | $1,360 - $1,400 | | HVAC | Segment Income Margin (%) | 23.00% - 24.00% | 22.25% - 23.25% | | Detection & Measurement | Revenue (Millions $) | $605 - $615 | $605 - $625 | | Detection & Measurement | Segment Income Margin (%) | 20.75% - 21.75% | 20.00% - 21.00% | Consolidated Financial Statements This section presents the unaudited consolidated statements of operations, balance sheets, and cash flows for Q2 and YTD 2024, detailing the company's financial performance and position Condensed Consolidated Statements of Operations The condensed consolidated statements of operations detail revenues, operating income, and net income for the three and six months ended June 29, 2024 Statement of Operations Highlights (Millions $) | Line Item | Three Months Ended Jun 29, 2024 (Millions $) | Three Months Ended Jul 1, 2023 (Millions $) | Six Months Ended Jun 29, 2024 (Millions $) | Six Months Ended Jul 1, 2023 (Millions $) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $501.3 | $423.3 | $966.5 | $823.1 | | Operating Income | $74.6 | $51.3 | $139.2 | $101.1 | | Income from Continuing Operations | $45.2 | $38.3 | $94.4 | $77.4 | | Net Income | $44.2 | $36.0 | $93.2 | $78.8 | Condensed Consolidated Balance Sheets The condensed consolidated balance sheets provide a snapshot of assets, liabilities, and equity as of June 29, 2024, and December 31, 2023 Balance Sheet Highlights (Millions $) | Line Item | June 29, 2024 (Millions $) | December 31, 2023 (Millions $) | | :--- | :--- | :--- | | Cash and equivalents | $128.1 | $99.4 | | Total Current Assets | $808.7 | $709.6 | | Total Assets | $2,783.1 | $2,439.7 | | Total Current Liabilities | $633.3 | $401.2 | | Total Liabilities | $1,499.3 | $1,245.1 | | Total Stockholders' Equity | $1,283.8 | $1,194.6 | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows detail cash movements from operating, investing, and financing activities for the six months ended June 29, 2024 Cash Flow Highlights (Millions $) | Line Item | Six Months Ended Jun 29, 2024 (Millions $) | Six Months Ended Jul 1, 2023 (Millions $) | | :--- | :--- | :--- | | Net cash from continuing operations | $69.4 | $74.6 | | Net cash from (used in) investing activities | ($271.5) | ($554.8) | | Net cash from (used in) financing activities | $230.5 | $426.2 | | Net change in cash and equivalents | $28.1 | ($61.5) | | Ending cash and equivalents | $133.0 | $95.6 | Non-GAAP Financial Measures and Reconciliations This section reconciles non-GAAP financial measures like organic revenue, adjusted operating income, adjusted EPS, and adjusted EBITDA to GAAP, clarifying adjustments for operational performance insights Organic Revenue Reconciliation This reconciliation details the components contributing to organic revenue growth for the HVAC and Detection & Measurement segments in Q2 2024 Q2 2024 Organic Revenue Growth Reconciliation | Segment | Net Revenue Growth (%) | Foreign Currency Impact (%) | Acquisitions Impact (%) | Organic Revenue Growth (%) | | :--- | :--- | :--- | :--- | :--- | | HVAC | 32.5% | (0.2)% | 15.0% | 17.7% | | Detection & Measurement | (6.2)% | 0.0% | 0.0% | (6.2)% | Adjusted Operating Income Reconciliation This reconciliation presents the adjustments made to GAAP operating income to derive adjusted operating income for Q2 2024 and Q2 2023 Q2 Adjusted Operating Income Reconciliation (Millions $) | Line Item | Q2 2024 (Millions $) | Q2 2023 (Millions $) | | :--- | :--- | :--- | | Operating income (GAAP) | $74.6 | $51.3 | | Adjustments | $28.2 | $18.1 | | Adjusted operating income (Non-GAAP) | $102.8 | $69.4 | Adjusted EPS Reconciliation This reconciliation details the adjustments from GAAP income from continuing operations and diluted EPS to their adjusted non-GAAP counterparts for Q2 2024 and Q2 2023 Q2 2024 EPS Reconciliation | Line Item | GAAP (Millions $, except EPS) | Adjustments (Millions $, except EPS) | Adjusted (Non-GAAP) (Millions $, except EPS) | | :--- | :--- | :--- | :--- | | Income from cont. ops (M) | $45.2 | $21.7 | $66.9 | | Diluted EPS | $0.96 | $0.46 | $1.42 | Q2 2023 EPS Reconciliation | Line Item | GAAP (Millions $, except EPS) | Adjustments (Millions $, except EPS) | Adjusted (Non-GAAP) (Millions $, except EPS) | | :--- | :--- | :--- | :--- | | Income from cont. ops (M) | $38.3 | $11.2 | $49.5 | | Diluted EPS | $0.82 | $0.24 | $1.06 | Adjusted EBITDA Reconciliation This reconciliation provides the adjustments from GAAP net income to derive Adjusted EBITDA for both Q2 and year-to-date periods in 2024 and 2023 Q2 Adjusted EBITDA Reconciliation (Millions $) | Line Item | Q2 2024 (Millions $) | Q2 2023 (Millions $) | | :--- | :--- | :--- | | Net Income (GAAP) | $44.2 | $36.0 | | EBITDA | $96.3 | $67.3 | | Adjustments | $12.6 | $7.8 | | Adjusted EBITDA (Non-GAAP) | $108.9 | $75.1 | YTD Adjusted EBITDA Reconciliation (Millions $) | Line Item | YTD 2024 (Millions $) | YTD 2023 (Millions $) | | :--- | :--- | :--- | | Net Income (GAAP) | $93.2 | $78.8 | | EBITDA | $177.9 | $130.3 | | Adjustments | $23.0 | $7.5 | | Adjusted EBITDA (Non-GAAP) | $200.9 | $137.8 |