Q3 GAAP EPS of $0.47; Adjusted EPS* of $0.60
Strong Performance in HVAC and Detection & Measurement Segments
Increasing Midpoint of 2019 Adjusted EPS* Guidance RangeCHARLOTTE, N.C., Oct. 30, 2019 (GLOBE NEWSWIRE) — SPX Corporation (NYSE:SPXC) today reported results for the quarter ended September 28, 2019. Gene Lowe, President and CEO, commented, “I am very pleased with our third quarter results, which reflect strong performances in our HVAC and Detection & Measurement segments. Based on our year-to-date results and visibility into Q4, we are raising the lower end of our guidance for Adjusted EPS to a new range of $2.65-$2.72, up from the prior range of $2.60-$2.72.”Mr. Lowe continued, “As we look forward, we continue to feel good about the performance trajectory of our company and our opportunities for growth. With our strong balance sheet, we also remain well-positioned to deploy capital to drive shareholder value, including for highly strategic acquisitions, where we remain active.”
Third Quarter 2019 Overview:For Q3 2019, the company reported revenue of $364.8 million and operating income of $27.6 million, compared with $362.5 million and $13.4 million, respectively, in Q3 2018. Net earnings per share from continuing operations were $0.47 in Q3 2019, compared with $0.15 for Q3 2018. SPX’s adjusted revenue* was $358.8 million and adjusted operating income* was $37.1 million for Q3 2019, compared with $341.1 million and $27.1 million, respectively, in Q3 2018. Adjusted earnings per share* for Q3 2019 were $0.60, compared with $0.39 for Q3 2018.GAAP Results:Adjusted Results:HVAC
Revenue for Q3 2019 was $140.1 million, compared with $132.0 million in Q3 2018, an increase of 6.1%, including a 2.5% increase from an acquisition and a 0.6% decrease from currency fluctuations. Organic revenue* increased 4.2%, due primarily to higher sales of heating products.Segment income was $22.2 million in Q3 2019. Adjusted segment income*, which excludes $0.1 million of intangible amortization expense, was $22.3 million, or 15.9% of revenue. This compares with segment income of $15.6 million and adjusted segment income* of $15.7 million, or 11.9% of revenue, in Q3 2018. The 400 basis point increase in margin was primarily due to operating leverage on increased revenue, a more profitable sales mix and operational improvements. Detection & MeasurementRevenue for Q3 2019 was $97.6 million, compared with $84.3 million in Q3 2018, an increase of 15.8%, including a 6.6% increase from acquisitions and a 1.0% decrease from currency fluctuations. Organic revenue* increased 10.2%, largely reflecting strong project-related sales of communication technologies products. Segment income was $20.5 million in Q3 2019. Adjusted segment income*, which excludes $1.9 million of intangible amortization expense, was $22.4 million, or 23.0% of revenue. This compares with segment income of $15.5 million and adjusted segment income* of $19.6 million, or 23.3% of revenue, in Q3 2018. The 30 basis point decrease in margin was primarily due to sales mix. Engineered SolutionsRevenue in Q3 2019 was $121.1 million, compared with $124.8 million in Q3 2018, a decrease of 3.0%. The revenue decline was driven by lower volumes in our process cooling business. Segment income in Q3 2019 was $5.9 million, or 4.9% of revenue, compared with segment income of $6.5 million, or 5.2% of revenues, in Q3 2018. The decrease in margin was driven by the lower volumes in our process cooling business noted above.All OtherAll Other, which includes the South African and Heat Transfer operations, had revenue of $6.0 million in Q3 2019, compared with $21.4 million in Q3 2018. The decrease was due primarily to lower organic revenue associated with the process of winding-down both operations.All Other incurred a loss in Q3 2019 of $5.7 million, compared with a loss of $8.0 million in Q3 2018. The smaller loss was due primarily to the wind-down activities noted above. Financial Update:As of September 28, 2019, SPX had total outstanding debt of $382.9 million and total cash of $49.3 million. During Q3 2019, SPX generated net operating cash from continuing operations of $45.3 million, including $7.3 million of cash inflows associated with the South African projects. Net leverage, as calculated under the company’s bank credit agreement, was 1.6x at the end of Q3 2019, including short-term financing related to acquisitions. Updating 2019 Adjusted EPS* Guidance:SPX continues to expect 2019 adjusted revenue* of approximately $1.50 billion, adjusted segment income margin* of approximately 15.0% and adjusted operating income margin* of approximately 11%. Adjusted earnings per share* is now expected to be in a range of $2.65 to $2.72, an increase from the previous guidance range of $2.60 to $2.72.Segment performance, on a year-over-year basis, is expected to be as follows (unchanged):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-Q: The company expects to file its quarterly report on Form 10-Q for the quarter ended September 28, 2019 with the Securities and Exchange Commission on or before November 7, 2019. 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. (EDT) today to discuss third 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.Conference call
Dial in: 877-341-7727
From outside the United States: +1 262-558-6098
Participant code: 6886828A replay of the call will be available by telephone through Wednesday, November 6th.To listen to a replay of the call
Dial in: 855-859-2056
From outside the United States: +1 404-537-3406
Participant code: 6886828Upcoming Investor Events: Company management plans to be on the road during the fourth quarter of 2019 meeting with investors, including presenting at the Baird Industrials Conference on November 6th.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 $1.4 billion in annual revenue in 2018 and approximately 4,000 employees in about 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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