SPX CORPORATION (NYSE:SPXC) Files An 8-K Results of Operations and Financial Condition

SPX CORPORATION (NYSE:SPXC) Files An 8-K Results of Operations and Financial Condition
Item 2.02. Results of Operations and Financial Condition.

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On February14, 2019, SPX Corporation (the “Company”) held a previously announced conference call to discuss the Company’s results for the three and twelve months ended December31, 2018 and its 2019 financial guidance. The conference call was simultaneously webcast via the Company’s website at www.spx.com and the slide presentation was available in the Investor Relations section of the Company’s website. A transcript of the conference call and the slide presentation accompanying the conference call are furnished as Exhibits 99.1 and 99.2 hereto, respectively, and are incorporated into this Item 2.02 by reference.

The conference call transcript and slide presentation incorporated by reference into this Item 2.02 contain certain non-GAAP financial measures, including disclosure regarding “adjusted revenues” and “adjusted segment income (loss)”, defined as revenues and segment income (loss) for the Company excluding the “All Other” group of operating segments, with “All Other” comprised of the results of the South African operations and SPX Heat Transfer business (“Heat Transfer”). Due, in part, to certain wind-down activities, and the related decline in volumes, the South African operations and Heat Transfer have a diminishing impact on the Company’s operating results over the long term. As such, the Company’s management believes it is useful to investors to disclose revenues and segment income (loss) without the results of the “All Other” group of operating segments to provide investors with metrics that the Company’s management uses to measure the overall performance of its businesses. Additionally, during the three and twelve months ended December31, 2018, the Company included adjustments to arrive at adjusted revenues and adjusted segment income (loss) by excluding non-recurring charges associated with (i)the step-up of inventory (to fair value) acquired in connection with the Schonstedt and Cues’ acquisitions that were completed on March1, 2018, and June7, 2018, respectively, (ii)amortization expense associated with the backlog intangible asset acquired in connection with the Cues’ acquisition, and (iii)deferred revenues acquired in the Cues’ transaction. Adjusted revenues and adjusted segment income (loss) do not provide investors with an accurate measure of, and should not be used as substitutes for, the Company’s revenues and segment income (loss) as determined in accordance with accounting principles generally accepted in the United States (“GAAP”), and may not be comparable to similarly titled measures reported by other companies.

The conference call transcript and slide presentation incorporated by reference into this Item 2.02 also contain disclosure for the three and twelve months ended December31, 2018 regarding “adjusted revenue” and “adjusted segment income” for the Company’s Detection and Measurement reportable segment, defined as revenue and segment income for its Detection and Measurement reportable segment excluding the inventory step-up charges, backlog amortization, and the adjustment to acquired deferred revenue noted above. Adjusted revenue and adjusted segment income for the Detection and Measurement reportable segment does not provide investors with an accurate measure of, and should not be used as a substitute for, revenue and segment income of the Detection and Measurement reportable segment as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.

The conference call transcript and slide presentation incorporated by reference into this Item 2.02 also contain disclosure regarding “adjusted operating income (loss)” and “adjusted earnings (loss) per share”, defined as operating income (loss) and diluted net income (loss) per share from continuing operations excluding the following items: (a)results of the “All Other” group of operating segments, (b)non-service pension and postretirement expense (income), (c)acquisition related charges, (d)losses on the sale of the Company’s Dry Cooling business, (e)non-cash charges associated with the amendment/refinancing of our senior credit agreement, (f)a non-recurring gain on interest rate swaps that no longer qualified for hedge accounting, and (g)the removal of certain discrete income tax benefits, as applicable, as well as (h)the income tax impact of items (a)through (f). In addition to the Company’s “All Other” group of operating segments, as described above, the Company’s management views the impact related to each of the other items as not indicative of the Company’s ongoing performance. The Company believes that inclusion of only the service cost and prior service cost components of pension and postretirement expense better reflects the ongoing costs of providing pension and postretirement benefits to its employees. Other components of GAAP pension and postretirement expense (income) are mainly driven by market performance, and the Company manages these separately from the operational performance of its business. The Company believes adjusted operating income (loss) and adjusted earnings (loss) per share, when read in conjunction with operating income (loss) and diluted net income (loss) per share from continuing operations, gives 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 adjusted operating income (loss) and adjusted earnings (loss) per share as measures of the Company’s performance. The adjusted operating income (loss) and adjusted earnings (loss) per share measures do not provide investors with an accurate measure of the actual operating income (loss) and diluted net income (loss) per share from continuing operations reported by the Company and should not be considered as substitutes for operating income (loss) and diluted net income (loss) per share from continuing operations as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.

The conference call transcript and slide presentation incorporated by reference into this Item 2.02 also contain disclosure regarding organic revenue growth (decline), defined as revenue growth (decline) excluding the effects of foreign currency fluctuations and acquisitions/divestitures, as applicable. The Company’s management believes that organic revenue growth (decline) is a useful financial measure for investors in evaluating operating performance for the periods presented, because excluding the effect of currency fluctuations and acquisitions/divestitures, when read in conjunction with the Company’s revenues, presents a useful tool to evaluate the Company’s ongoing operations and provides investors with a tool they can use to evaluate the Company’s management of assets held from period to period. In addition, organic revenue growth (decline) is one of the factors the Company’s management uses in internal evaluations of the overall performance of its business. This metric, however, should not be considered a substitute for revenue growth (decline) as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.

The conference call transcript and slide presentation incorporated by reference into this Item 2.02 also contain disclosure regarding adjusted free cash flow from (used in) continuing operations, defined as net cash from (used in) continuing operations, less capital expenditures of continuing operations and excluding the free cash flow of the “All Other” group of operating segments. The Company’s management believes that adjusted free cash flow from (used in) continuing operations is a useful financial measure for investors in evaluating the cash flow performance of multi-industrial companies, since it provides insight into the on-going cash flow available to fund such things as mandatory and discretionary debt reduction, equity repurchases, and acquisitions or other strategic investments. Adjusted free cash flow from (used in) continuing operations is not a measure of financial performance under GAAP. This measure should not be considered a substitute for net cash flow from (used in) continuing operations, as determined in accordance with GAAP, but rather should be used in combination with cash flows from (used in) operating activities as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.

Refer to the tables included in the slide presentation for the components of each of the Company’s non-GAAP financial measures referred to above, and for the reconciliations of these numbers to their respective comparable GAAP measures.

The information in this Report is being furnished and shall not be deemed “filed” for the purposes of Section18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

SPX CORP Exhibit
EX-99.1 2 a19-4933_1ex99d1.htm EX-99.1 Exhibit 99.1   SPX Corporation (NYSE: SPXC)   SPX Corporation Reports Fourth Quarter and Full Year 2018 Results   Transcription of Call   February 14,…
To view the full exhibit click here

About SPX CORPORATION (NYSE:SPXC)

SPX Corporation is a diversified, global supplier of infrastructure equipment. The Company operates through three segments: heating, ventilation and air conditioning (HVAC); Detection and Measurement, and Power. The HVAC solutions offered by its businesses include package cooling towers, residential and commercial boilers, heating and ventilation products. Its detection and measurement product lines encompass underground pipe and cable locators, and inspection equipment. Within its power platform, it is a manufacturer of medium and large power transformers, as well as equipment for various types of power plant, including cooling equipment, heat exchangers and pollution control systems. Its heating and ventilation products are sold under the Berko, Qmark, Farenheat, and Leading Edge brands, while its Marley-Wylain subsidiary sells Weil-McLain and Williamson-Thermoflo brands. Its power products are sold under the brand names of SPX Cooling, Marley, Balcke Duerr, Yuba and Ecolaire.

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