Q4 and Full-Year 2019 GAAP EPS of $0.75 and $1.67
Q4 and Full-Year 2019 Adjusted EPS* of $0.96 and $2.76
Introducing 2020 Full-Year Adjusted EPS* Guidance Range of $2.90-$3.05CHARLOTTE, N.C., Feb. 13, 2020 (GLOBE NEWSWIRE) — SPX Corporation (NYSE:SPXC) today reported results for the fourth quarter and the year ended December 31, 2019.Gene Lowe, President and CEO, remarked, “2019 was another milestone year for our company with several notable accomplishments that reflect the hard work and effort of our team. For the fourth year in a row SPX reported significant growth in adjusted EPS and free cash flow. We also completed three attractive, strategic acquisitions, including the fourth quarter purchase of Patterson-Kelley, within our HVAC segment, which accelerates our growth and strengthens our market position in commercial high efficiency boilers.”Mr. Lowe commented further, “SPX is well positioned to continue delivering on our value creation framework. Our significant after-market and replacement revenue, and steady end-market drivers provide a stable platform for further earnings growth and strong cash generation. Our focus on successful new product introductions and channel initiatives continues to yield organic growth, while our business system drives operational improvements across the company. Additionally, our strong balance sheet and substantial capital availability support further strategic investments to enhance and accelerate our value creation strategy.” Fourth Quarter 2019 Overview:For the fourth quarter of 2019, the company reported revenue of $444.6 million and operating income of $51.0 million, compared with revenue of $445.0 million and operating income of $52.2 million in the fourth quarter of 2018. Diluted per share income from continuing operations attributable to SPX Corporation in the fourth quarter of 2019 was $0.75, compared with a net income per share of $0.88 in the fourth quarter of 2018.SPX’s adjusted revenue* was $445.1 million and adjusted operating income* was $62.6 million, compared with adjusted revenue* of $428.6 million and adjusted operating income* of $60.4 million in the fourth quarter of 2018. Adjusted income per share* in the fourth quarter of 2019 was $0.96, compared with $0.91 in the fourth quarter of 2018. Full-Year 2019 Overview:For the full-year 2019, the company reported revenue of $1.5 billion and operating income of $107.9 million, compared with revenue of $1.5 billion and operating income of $107.6 million in 2018. Diluted per share income from continuing operations in 2019 was $1.67, compared with $1.75 in 2018.SPX’s adjusted revenue* for 2019 was $1.5 billion and adjusted operating income* was $172.3 million, compared with adjusted revenue* of $1.4 billion and adjusted operating income* of $146.2 million in 2018. Adjusted income per share* in 2019 was $2.76, compared with $2.27 in 2018.Fourth Quarter and Full-Year Financial Comparisons:
* Non-GAAP financial measure. See attached schedules for reconciliation to most comparable GAAP financial measure.HVACRevenue for Q4 2019 was $193.8 million, compared with $182.7 million in Q4 2018, an increase of 6.1%, including a 4.1% increase from the acquisitions of SGS and Patterson-Kelley and a 0.1% unfavorable impact related to currency fluctuation. Organic revenue* increased 2.1%, reflecting an increase in cooling product sales.Segment income in Q4 2019 was $38.1 million, compared to $37.3 million in Q4 2018. Adjusted segment income*, which excludes intangible amortization expense of $1.1 million, was $39.2 million, or 20.2% of revenue. This compares with adjusted segment income* of $37.4 million, or 20.5% of revenue in Q4 2018, which excludes intangible amortization expense of $0.1 million. The increase in adjusted segment income* was due to revenue growth and operational improvements within the cooling business. The 30 basis point decrease in adjusted segment income margin* was due to a less favorable sales mix. Full-year 2019 revenue increased to $593.2 million in 2019, from $582.1 million in 2018, an increase of 1.9%. The increase was due to the acquisitions of SGS and Patterson-Kelley and, to a lesser extent, an increase in organic revenue* of 0.5% from higher sales of heating products. Full-year 2019 segment income was $95.4 million in 2019, compared to $90.0 million in 2018. Adjusted segment income*, which excludes intangible amortization expense of $1.4 million, was $96.8 million, or 16.3% of revenue. This compares with adjusted segment income* of $90.4 million in 2018, or 15.5% of revenue, which excludes intangible amortization expense of $0.4 million. The increase in segment income and margin was due primarily to more favorable pricing and operational improvements within the segment’s cooling business.Detection & MeasurementRevenue in Q4 2019 was $100.5 million, compared with of $96.4 million in Q4 2018, an increase of 4.3%, including a 0.1% favorable currency impact. Compared with adjusted revenue* of $96.9 million in Q4 2018, revenue increased 3.7%, including an 8.7% increase from the acquisition of Sabik. Organic revenue* decreased 5.0%, largely due to the timing of project-related sales of communication technologies products compared with 2018. Segment income in Q4 2019 was $22.5 million, compared to $24.7 million in Q4 2018. Adjusted segment income*, which excludes intangible amortization expense of $1.8 million and an acquisition related adjustment of ($0.2) million, was $24.1 million, or 24.0% of revenue. This compares with adjusted segment income* of $26.8 million, or 27.7% of adjusted revenue*, in Q4 2018, which excludes intangible amortization expense of $1.4 million and acquisition related adjustment of $0.7 million. The 370 basis point decrease in adjusted segment income margin* was driven primarily by the timing of communications technologies project revenues noted above and a less favorable mix. Full-year 2019 revenue was $384.9 million in 2019 compared with $320.9 million in 2018, an increase of 19.9%. Adjusted revenue* in 2018 was $321.4 million. The increase in revenue was due primarily to the impact of the acquisitions of Schonstedt and CUES in 2018, and the Sabik acquisition in 2019. Full-year 2019 segment income was $81.7 million in 2019, compared to $72.4 million in 2018. Adjusted segment income*, which excludes intangible amortization expense of $7.5 million and acquisition related adjustments of $2.0 million, was $91.2 million, or 23.7% of revenue. This compares with adjusted segment income* of $81.2 million in 2018, or 25.3% of revenue, which excludes intangible amortization expense of $3.7 million and acquisition related adjustments of $5.1 million. The increase in adjusted segment income was due to the revenue increase noted above. The decrease in margin was due primarily to a less favorable sales mix.Engineered SolutionsRevenue in Q4 2019 was $150.8 million, compared with $149.1 million in Q4 2018, an increase of 1.1%, driven by higher revenue from the sale of transformer products.Segment income in Q4 2019 was $16.1 million, or 10.7% of revenue, compared with segment income of $11.3 million, or 7.6% of revenue in Q4 2018. The increase in segment income and margin was due to higher revenues from transformer products and, to a lesser extent, a more profitable sales mix of process cooling products.Full-year 2019 revenue increased 2.2% to $548.9 million in 2019, from $537.0 million in 2018, driven by higher revenues in our transformers business due to operational improvements. Full-year 2019 segment income was $43.0 million in 2019, or 7.8% of revenue, compared to segment income of $35.0 million, or 6.5% of revenue, in 2018. The increase in segment income and margin was primarily due to the increase in revenue noted above. All OtherAll Other, which includes the South African and Heat Transfer operations, had revenue of ($0.5) million in Q4 2019, compared with $16.8 million in Q4 2018. The decrease was due to lower sales associated with projects in South Africa, which are substantially complete, and the wind-down of the Heat Transfer business. All Other incurred a loss in Q4 2019 of $7.8 million, compared with a loss of $2.4 million in Q4 2018. The increase in the loss was due primarily to lower revenue and higher legal fees associated with the projects in South Africa. Full-year 2019 revenue decreased to ($1.6) million in 2019, from $98.6 million in 2018. The decrease was due to lower sales associated with projects in South Africa and the Heat Transfer business. Full-year revenue includes adjustments that reduced revenue associated with the South African projects. All Other incurred a loss of $46.1 million in 2019, compared with a loss of $18.9 million in 2018, with the increase in the loss due primarily to the adjustments noted above associated with the projects in South Africa. Financial Update:As of December 31, 2019, SPX had total outstanding debt of $393.5 million and total cash of $54.7 million. During the full-year 2019, SPX generated net operating cash from continuing operations of $152.9 million. Capital expenditures for continuing operations for the full-year 2019 were $17.8 million. Net leverage, as calculated under the company’s bank credit agreement was 1.6x, compared with 1.7x at the end of 2018.2020 Guidance:SPX is targeting 2020 adjusted revenue* of approximately $1.6 billion with adjusted segment income margin* of 15.0-16.0% and adjusted operating income margin* of approximately 11.5%. Adjusted earnings per share* is expected to be in a range of $2.90 to $3.05.Segment performance, on a year-over-year basis, is expected to be as follows:Non-GAAP Presentation: To provide additional clarity to its operating results, the company discusses results and guidance that include “adjusted” non-GAAP financial measures. Adjusted results for the company exclude, among other items, the effect of the South African and Heat Transfer operations, categorized as “All Other” in the company’s segment reporting structure. The company reports separately on the results of the All Other category. The company anticipates reporting the results of businesses included in the “All Other” category as discontinued operations, at such time as they meet the accounting requirements for this treatment. Form 10-K: The company expects to file its annual report on Form 10-K for the year ended December 31, 2019 with the Securities and Exchange Commission on or before March 2, 2020. 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 will host a conference call at 4:45 p.m. (ET) today to discuss fourth quarter results and 2019 financial guidance. 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.Conference call
Dial in: 877-341-7727
From outside the United States: +1 262-558-6098
Participant code: 3086045A replay of the call will be available by telephone through Thursday, February 20th.To listen to a replay of the call
Dial in: 855-859-2056
From outside the United States: +1 404-537-3406
Participant code: 3086045Other Matters: In December 2019, SPX entered into an amendment with its bank group to extend its credit facility until December 17, 2024. The amendment also increased the size of the revolving credit facility to $450 million from $350 million previously, and reduced the size of the term loan facility to $250 million from an initial amount of $350 million previously. Other changes to the credit agreement are described in Form 8-K filed with the Securities and Exchange Commission on December 18, 2019.Upcoming Investor Events: Company management plans to be on the road during the first quarter of 2020 meeting with investors in Texas and in the Midwest. In addition, SPX will also be attending the Sidoti & Company, LLC 2020 Spring Investor Conference in New York on March 26th. About SPX Corporation: SPX Corporation is a supplier of highly engineered products and technologies, holding leadership positions in the HVAC, detection and measurement, and engineered solutions markets. Based in Charlotte, North Carolina, SPX Corporation had approximately $1.5 billion in annual revenue in 2019 and over 4,500 employees in 17 countries. SPX Corporation is listed on the New York Stock Exchange under the ticker symbol “SPXC.” For more information, please visit www.spx.com.*Non-GAAP financial measure. See attached schedules for reconciliation to 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, the results of our South African operations, the results of our Heat Transfer business, 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 nearest corresponding GAAP financial measures is not practicable.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 reports 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. Actual results may differ materially from these statements. The words “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. In addition, estimates of future operating results are based on the company’s current complement of businesses, which is subject to change.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.SOURCE SPX Corporation.Investor and Media Contacts:
Paul Clegg, VP, Investor Relations and Communications
Phone: 980-474-3806
E-mail: [email protected]Pat Uotila, Manager, Investor Relations
Phone: 980-474-3806
E-mail: [email protected]
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