CHARLOTTE, N.C., Aug. 6, 2019 /PRNewswire/ -- SPX FLOW, Inc. (NYSE: FLOW), a leading provider of process solutions, today reported results for the quarter ended June 29, 2019. As previously announced, the company is focusing its strategy on building a premier process solutions enterprise and in conjunction, pursuing a sale of its Power and Energy business. Notably, the results for the Power and Energy business were reported as discontinued operations for all periods presented, reflecting management's determination that it is probable the sale of this business will be completed within the next twelve months. The continuing operations of the company were reported in two segments: Food and Beverage and Industrial, the latter of which now includes certain product lines previously reported in the former Power and Energy reportable segment that are not being offered for sale.
"During a busy second quarter our team worked diligently to improve customer fulfillment and operating performance while also executing on strategic actions. We reduced gross debt by $20 million and net leverage declined to 1.8x, a significant milestone. Additionally, we amended our credit facility, achieving modestly better pricing, increased revolver capacity and extending maturity out to 2024. I'm pleased with the progress made on many fronts and confident in our long-term plan to create value by building a premier process solutions enterprise with a strong balance sheet and customer-centered growth strategy," said Marc Michael, President and CEO.
"On the strategic front, we have been taking deliberate steps to reduce our exposure to cyclical power and energy markets and large, project-based dry dairy applications. These verticals contributed to volatility in our historical operating performance and overshadowed the underlying profitability and quality of revenue generated in our high value product lines."
"As we begin the second half of 2019, we are at a pivot point in this portfolio transformation. In dry dairy, the few remaining large projects in backlog are ramping down, and accordingly we completed actions late in the quarter to reduce our cost structure in that technology category. In parallel, the process to sell our Power and Energy business is moving forward with positive momentum. That business performed well in Q2, delivering double-digit operating margins with orders up sharply from Q1, driven by pipeline valve orders in North America and global aftermarket. We understand the scope of the supporting costs for the Power and Energy business and are well-prepared to reduce overhead in a timely manner upon completing the divestiture. Once complete, we intend to deploy the net proceeds from this divestiture to organic growth initiatives, further deleveraging and return to shareholders," continued Michael.
"With an eye on the future, we have begun tailoring our organizational design to emphasize greater customer intimacy, new product development and innovative customer and market analytics. We will leverage our "Pathway to Excellence" lean program to increase the speed and efficiency of customer fulfillment with the goal of delivering a world class customer experience while improving our cost productivity by 2%-3% of revenue," continued Michael.
"Turning to the economic environment, moderating macro-economic conditions contributed to year-over-year order declines across most of our business in the first half. Second quarter orders declined 13.9% year-over-year on an organic basis, reflecting delayed capital spending broadly across our customer base and a slowdown in short cycle activity across most of our industries. From a regional perspective, the order decline was most prominent in North America, with Asia Pacific orders also down versus the prior year."
"On a sequential basis, orders in our Food & Beverage and Industrial segments were stable, an encouraging sign."
"This morning we provided full year 2019 guidance on a continuing operations basis. On this basis, we are targeting revenue between $1,485 and $1,515 million, adjusted EPS* to be in the range of $1.75 to $1.95 per share, adjusted EBITDA* between $175 and $185 million and adjusted free cash flow* between $80 and $90 million. This includes approximately $6 million of annual cost associated with supporting the Power and Energy business that is held for sale. It does not include any cost or benefit from our 2%-3% cost productivity goal and does not contemplate use of divestiture proceeds."
"In summary, 2019 represents a significant pivot point for our business as we execute our portfolio strategy, simplify our operating structure and enhance our customer focus. I want to thank our teams across the enterprise for their hard work, tireless effort and positive contributions to the quarter. We are excited about the future and remain committed to creating long-term value for our shareholders, customers and employees," concluded Michael.
Second Quarter 2019 Consolidated Results (continuing operations unless otherwise noted)
$ millions; except per share data |
Q2 2019 |
Q2 2018 |
Variance |
Organic Variance |
|||||||||
Backlog |
$ |
527.6 |
$ |
656.2 |
(19.6)% |
(18.1)% |
|||||||
Orders |
355.6 |
425.8 |
(16.5)% |
(13.9)% |
|||||||||
Revenues |
385.4 |
406.5 |
(5.2)% |
(2.7)% |
|||||||||
Operating income |
29.7 |
32.3 |
(8.0)% |
||||||||||
Margin % |
7.7% |
7.9% |
-20bps |
||||||||||
Income from continuing operations, net of tax |
$ |
11.4 |
$ |
14.2 |
(19.7)% |
||||||||
Income from discontinued operations, net of tax (1) |
51.2 |
8.7 |
488.5% |
||||||||||
Net income attributable to SPX FLOW |
62.6 |
22.9 |
173.4% |
||||||||||
Diluted EPS from continuing operations |
$ |
0.27 |
$ |
0.34 |
(22.1)% |
||||||||
Diluted EPS from discontinued operations (1) |
1.20 |
0.20 |
488.5% |
||||||||||
Diluted EPS |
1.47 |
0.54 |
172.2% |
||||||||||
Operating Cash Flow from (used in) continuing operations |
$ |
9.5 |
$ |
(3.2) |
|||||||||
Operating Cash Flow from discontinued operations |
12.9 |
6.2 |
|||||||||||
Operating Cash Flow |
22.4 |
3.0 |
|||||||||||
Free Cash Flow* - Total company |
$ |
14.0 |
$ |
(4.2) |
|||||||||
Note: The commentary below is compared to the prior year period. Organic changes exclude the effects of currency fluctuations.
Second Quarter 2019 Results by Segment |
|||||||||||||
Food and Beverage |
|||||||||||||
$ millions |
Q2 2019 |
Q2 2018 |
Variance |
Organic Variance |
|||||||||
Backlog |
$ |
270.7 |
$ |
382.9 |
(29.3)% |
(27.9)% |
|||||||
Orders |
153.8 |
199.3 |
(22.8)% |
(20.6)% |
|||||||||
Revenues |
178.6 |
187.6 |
(4.8)% |
(2.3)% |
|||||||||
Income |
14.0 |
20.0 |
(30.0)% |
||||||||||
As a percent of revenues |
7.8% |
10.7% |
-290bps |
Note: The commentary below is compared to the prior year period. Organic changes exclude the effects of currency fluctuations.
Industrial |
|||||||||||||
$ millions |
Q2 2019 |
Q2 2018 |
Variance |
Organic Variance |
|||||||||
Backlog |
$ |
256.9 |
$ |
273.3 |
(6.0)% |
(4.4)% |
|||||||
Orders |
201.8 |
226.5 |
(10.9)% |
(8.0)% |
|||||||||
Revenues |
206.8 |
218.9 |
(5.5)% |
(3.1)% |
|||||||||
Income |
30.7 |
28.5 |
7.7% |
||||||||||
As a percent of revenues |
14.8% |
13.0% |
180bps |
Note: The commentary below is compared to the prior year period. Organic changes exclude the effects of currency fluctuations.
OTHER ITEMS
Form 10-Q: The company expects to file its quarterly report on Form 10-Q for the quarter ended June 29, 2019 with the Securities and Exchange Commission on August 7, 2019. This news release should be read in conjunction with that filing, which will be available on the company's website at www.spxflow.com , in the Investor Relations section.
Discontinued Operations: On May 2, 2019, the company announced that its Board of Directors initiated a process to divest a substantial portion of the company's Power and Energy segment. The results for the Power and Energy business were reported as discontinued operations for all periods presented, reflecting management's determination that it is probable the sale of this business will be completed within the next twelve months. The continuing operations of the company were reported in two segments: Food and Beverage and Industrial, the latter of which now includes certain product lines previously reported in the former Power and Energy reportable segment that are not being offered for sale.
Debt Repayment: During the quarter, the company made a voluntary prepayment of $20.0 million on its term loan.
Senior Credit Facilities: On June 27, 2019 the company, in conjunction with its lenders, amended and restated its senior credit facilities. More details can be found within a form 8-K, filed on July 1, 2019 with the Securities and Exchange Commission which is available on the company's website at www.spxflow.com.
About SPX FLOW, Inc.: Based in Charlotte, North Carolina, SPX FLOW, Inc. (NYSE: FLOW) innovates with customers to help feed and enhance the world by designing, delivering and servicing high value process solutions at the heart of growing and sustaining our diverse communities. The company's product offering is concentrated in process technologies that perform mixing, blending, fluid handling, separation, thermal heat transfer and other activities that are integral to processes performed across a wide variety of sanitary and industrial markets. SPX FLOW has approximately $1.5 billion in annual revenues with operations in more than 30 countries and sales in more than 140 countries. To learn more about SPX FLOW, please visit www.spxflow.com .
*Non-GAAP measure. See attached schedules for reconciliation from most comparable GAAP measure. Management believes these Non-GAAP metrics are commonly used financial measures for investors to evaluate our operating performance for the periods presented, and when read in conjunction with our condensed consolidated financial statements, present a useful tool to evaluate continuing operations and provide investors with metrics they can use to evaluate our management of the business from period to period. In addition, these are some of the factors we use in internal evaluations of the overall performance of our business.
Management 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.
(1) During the three months ended June 29, 2019, we recorded an income tax benefit of $37.8 on $12.9 of pre-tax income from discontinued operations, resulting in an effective tax rate of (293.0)%. This compares to an income tax provision for the three months ended June 30, 2018 of $3.7 on $12.4 of pre-tax income from discontinued operations, resulting in an effective tax rate of 29.8%. The effective tax rate for the second quarter of 2019 was impacted by a benefit of $40.6 resulting from basis differences that will be realized through the disposition of the held-for-sale assets.
During the six months ended June 29, 2019, we recorded an income tax benefit of $37.8 on $17.8 of pre-tax income from discontinued operations, resulting in an effective tax rate of (212.4)%. This compares to an income tax provision for the six months ended June 30, 2018 of $7.5 on $19.8 of pre-tax income from discontinued operations, resulting in an effective tax rate of 37.9%. The effective tax rate for the first six months of 2019 was impacted by a benefit of $40.6 resulting from basis differences that will be realized through the disposition of the held-for-sale assets. The effective tax rate for the first six months of 2018 was impacted by an expense of $1.1 resulting from an adjustment to the valuation allowance on certain deferred tax assets for which no benefit is expected to be recognized.
Note: Net leverage is as defined by the company's credit facility.
Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Exchange 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 its annual report on Form 10-K for the year ended December 31, 2018. 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 "expect," "anticipate," "plan," "target," "project," "believe" 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. These statements are only predictions. Actual events or results may differ materially because of market conditions or other factors, and forward-looking statements should not be relied upon as a prediction of actual results. All the forward-looking statements in this press release are qualified in their entirety by reference to the factors discussed under the heading "Risk Factors" in the 2018 Form 10-K and in any other documents filed by the company with the Securities and Exchange Commission that describe risks and factors that could cause results to differ materially from those projected in these forward-looking statements. These risk factors may not be exhaustive. Further, the company operates in a continually changing business environment and cannot predict new risk factors that may arise as a result of these changes. In addition, estimates of future operating results are based on the company's current complement of continuing operations, which is subject to change, and the company cannot assure that the portion of the former Power and Energy reportable segment being held for sale will be sold in the anticipated time period, or at all, and the terms of any such sale if it is completed. Statements in this press release speak only as of the date of this press release, and SPX FLOW disclaims any responsibility to update or revise such statements.
Investor Contact:
Stewart Honeycutt
Director, FP&A and Investor Relations
704-752-4472
investor@spxflow.com
SPX FLOW, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(Unaudited; in millions, except per share amounts) |
|||||||
Three months ended |
Six months ended |
||||||
June 29, 2019 |
June 30, 2019 |
June 29, 2019 |
June 30, 2019 |
||||
Revenues |
$ 385.4 |
$ 406.5 |
758.8 |
775.4 |
|||
Cost of products sold |
254.8 |
270.7 |
504.8 |
521.2 |
|||
Gross profit |
130.6 |
135.8 |
254.0 |
254.2 |
|||
Selling, general and administrative |
96.2 |
98.3 |
183.7 |
192.8 |
|||
Intangible amortization |
2.8 |
3.3 |
5.7 |
6.7 |
|||
Restructuring and other related charges |
1.9 |
1.9 |
6.9 |
2.7 |
|||
Operating income |
29.7 |
32.3 |
57.7 |
52.0 |
|||
Other income (expense), net |
1.7 |
(0.3) |
7.2 |
(2.1) |
|||
Interest expense, net |
(8.4) |
(9.1) |
(16.0) |
(18.3) |
|||
Income from continuing operations before income taxes |
23.0 |
22.9 |
48.9 |
31.6 |
|||
Income tax provision |
(11.5) |
(8.2) |
(22.2) |
(5.2) |
|||
Income from continuing operations |
11.5 |
14.7 |
26.7 |
26.4 |
|||
Income from discontinued operations, net of tax |
50.7 |
8.7 |
55.6 |
12.3 |
|||
Net income |
62.2 |
23.4 |
82.3 |
38.7 |
|||
Less: Net income (loss) attributable to noncontrolling interests |
(0.4) |
0.5 |
0.2 |
0.3 |
|||
Net income attributable to SPX FLOW, Inc. |
$ 62.6 |
$ 22.9 |
82.1 |
38.4 |
|||
Amounts attributable to SPX FLOW, Inc. common shareholders: |
|||||||
Income from continuing operations, net of tax |
11.4 |
14.2 |
26.3 |
25.8 |
|||
Income from discontinued operations, net of tax |
51.2 |
8.7 |
55.8 |
12.6 |
|||
Net income attributable to SPX FLOW, Inc. |
62.6 |
22.9 |
82.1 |
38.4 |
|||
Basic income per share of common stock: |
|||||||
Income per share from continuing operations |
$ 0.27 |
$ 0.34 |
$ 0.62 |
$ 0.61 |
|||
Income per share from discontinued operations, net of tax |
1.21 |
0.20 |
1.32 |
0.30 |
|||
Net income per share attributable to SPX FLOW, Inc. |
$ 1.48 |
$ 0.54 |
$ 1.94 |
$ 0.91 |
|||
Diluted income per share of common stock: |
|||||||
Income per share from continuing operations |
$ 0.27 |
$ 0.34 |
$ 0.62 |
$ 0.61 |
|||
Income per share from discontinued operations, net of tax |
1.20 |
0.20 |
1.31 |
0.29 |
|||
Net income per share attributable to SPX FLOW, Inc. |
$ 1.47 |
$ 0.54 |
$ 1.93 |
$ 0.90 |
|||
Weighted average number of common shares outstanding - basic |
42.368 |
42.146 |
42.410 |
42.072 |
|||
Weighted average number of common shares outstanding - diluted |
42.617 |
42.616 |
42.597 |
42.559 |
SPX FLOW, INC. AND SUBSIDIARIES |
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(Unaudited; in millions) |
|||
June 29, 2019 |
December 31, 2018 |
||
ASSETS |
|||
Current assets: |
|||
Cash and equivalents |
$ 186.7 |
$ 197.0 |
|
Accounts receivable, net |
258.4 |
278.4 |
|
Contract assets |
30.1 |
33.8 |
|
Inventories, net |
233.3 |
220.5 |
|
Other current assets |
21.3 |
33.3 |
|
Assets of discontinued operations - current |
664.0 |
244.4 |
|
Total current assets |
1393.8 |
1,007.4 |
|
Property, plant and equipment: |
|||
Land |
23.7 |
23.9 |
|
Buildings and leasehold improvements |
170.7 |
175.5 |
|
Machinery and equipment |
342.8 |
336.8 |
|
537.2 |
536.2 |
||
Accumulated depreciation |
(292.6) |
(284.9) |
|
Property, plant and equipment, net |
244.6 |
251.3 |
|
Goodwill |
549.6 |
550.4 |
|
Intangibles, net |
213.5 |
219.2 |
|
Other assets |
172.7 |
111.1 |
|
Assets of discontinued operations - long-term |
- |
412.4 |
|
TOTAL ASSETS |
$ 2574.2 |
$ 2,551.8 |
|
LIABILITIES, MEZZANINE EQUITY AND EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 149.3 |
$ 157.0 |
|
Contract liabilities |
108.8 |
136.4 |
|
Accrued expenses |
155.1 |
149.0 |
|
Income taxes payable |
21.9 |
26.7 |
|
Short-term debt |
23.5 |
26.0 |
|
Current maturities of long-term debt |
0.1 |
20.8 |
|
Liabilities of discontinued operations - current |
198.3 |
133.4 |
|
Total current liabilities |
657.0 |
649.3 |
|
Long-term debt |
708.0 |
718.3 |
|
Deferred and other income taxes |
42.2 |
71.5 |
|
Other long-term liabilities |
107.9 |
67.5 |
|
Liabilities of discontinued operations - long-term |
- |
60.6 |
|
Total long-term liabilities |
858.1 |
917.9 |
|
Mezzanine equity |
21.0 |
21.5 |
|
Equity: |
|||
SPX FLOW, Inc. shareholders' equity: |
|||
Common stock |
0.4 |
0.4 |
|
Paid-in capital |
1,669.4 |
1,662.6 |
|
Accumulated deficit |
(192.0) |
(265.6) |
|
Accumulated other comprehensive loss |
(429.9) |
(430.7) |
|
Common stock in treasury |
(19.1) |
(13.9) |
|
Total SPX FLOW, Inc. shareholders' equity |
1028.8 |
952.8 |
|
Noncontrolling interests |
9.3 |
10.3 |
|
Total equity |
1038.1 |
963.1 |
|
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY |
$ 2574.2 |
$ 2,551.8 |
SPX FLOW, INC. AND SUBSIDIARIES |
|||||||||||||||
RESULTS OF REPORTABLE SEGMENTS |
|||||||||||||||
(Unaudited; in millions) |
|||||||||||||||
As of and for the three months |
As of and for the six months |
||||||||||||||
June 29, 2019 |
June 30, 2018 |
Change |
%/bps |
June 29, 2019 |
June 30, 2018 |
Change |
%/bps |
||||||||
Food and Beverage |
|||||||||||||||
Backlog |
$ 270.7 |
$ 382.9 |
$ (112.2) |
(29.3)% |
$ 270.7 |
$ 382.9 |
$ (112.2) |
(29.3)% |
|||||||
Orders |
$ 153.8 |
$ 199.3 |
$ (45.5) |
(22.8)% |
$ 306.9 |
$ 370.5 |
$ (63.6) |
(17.2)% |
|||||||
Revenues |
$ 178.6 |
$ 187.6 |
$ (9.0) |
(4.8)% |
$ 351.1 |
$ 354.1 |
$ (3) |
(0.8)% |
|||||||
Gross profit |
54.4 |
59.1 |
(4.7) |
106.0 |
114.0 |
(8) |
|||||||||
as a percent of revenues |
30.5 % |
31.5 % |
(100)bps |
30.2 % |
32.2 % |
(200)bps |
|||||||||
Selling, general and administrative |
38.9 |
37.2 |
1.7 |
70.5 |
72.3 |
(1.8) |
|||||||||
as a percent of revenues |
21.8 % |
19.8 % |
200 bps |
20.1 % |
20.4 % |
(30)bps |
|||||||||
Intangible amortization expense |
1.5 |
1.9 |
(0.4) |
3.0 |
3.8 |
(0.8) |
|||||||||
Income |
$ 14.0 |
$ 20.0 |
$ (6.0) |
(30.0)% |
$ 32.5 |
$ 37.9 |
$ (5.4) |
(14.2)% |
|||||||
as a percent of revenues |
7.8 % |
10.7 % |
(290)bps |
9.3 % |
10.7 % |
(140)bps |
|||||||||
Industrial |
|||||||||||||||
Backlog |
$ 256.9 |
$ 273.3 |
$ (16.4) |
(6.0)% |
$ 256.9 |
$ 273.3 |
$ (16.4) |
(6.0)% |
|||||||
Orders |
$ 201.8 |
$ 226.5 |
$ (24.7) |
(10.9)% |
$ 406.4 |
$ 438.2 |
$ (31.8) |
(7.3)% |
|||||||
Revenues |
$ 206.8 |
$ 218.9 |
$ (12.1) |
(5.5)% |
$ 407.7 |
$ 421.3 |
$ (13.6) |
(3.2)% |
|||||||
Gross profit |
76.2 |
76.7 |
(0.5) |
148.0 |
140.2 |
7.8 |
|||||||||
as a percent of revenues |
36.8 % |
35.0 % |
180 bps |
36.3 % |
33.3 % |
300 bps |
|||||||||
Selling, general and administrative |
44.2 |
46.8 |
(2.6) |
86.1 |
89.8 |
(3.7) |
|||||||||
as a percent of revenue |
21.4 % |
21.4 % |
- bps |
21.1 % |
21.3 % |
(20)bps |
|||||||||
Intangible amortization expense |
1.3 |
1.4 |
(0.1) |
2.7 |
2.9 |
(0.2) |
|||||||||
Income |
$ 30.7 |
$ 28.5 |
$ 2.2 |
7.7 % |
$ 59.2 |
$ 47.5 |
$ 11.7 |
24.6 % |
|||||||
as a percent of revenues |
14.8 % |
13.0 % |
180 bps |
14.5 % |
11.3 % |
320 bps |
|||||||||
Consolidated Backlog |
$ 527.6 |
$ 656.2 |
$ (128.6) |
(19.6)% |
$ 527.6 |
$ 656.2 |
$ (128.6) |
(19.6)% |
|||||||
Consolidated Orders |
355.6 |
425.8 |
(70.2) |
(16.5)% |
713.3 |
808.7 |
(95.4) |
(11.8)% |
|||||||
Consolidated Revenues |
385.4 |
406.5 |
(21.1) |
(5.2)% |
758.8 |
775.4 |
(16.6) |
(2.1)% |
|||||||
Consolidated Segment Income |
44.7 |
48.5 |
(3.8) |
(7.8)% |
91.7 |
85.4 |
6.3 |
7.4 % |
|||||||
as a percent of revenues |
11.6 % |
11.9 % |
(30)bps |
12.1 % |
11.0 % |
110 bps |
|||||||||
Total income for reportable |
$ 44.7 |
$ 48.5 |
$ (3.8) |
$ 91.7 |
$ 85.4 |
$ 6.3 |
|||||||||
Corporate expense |
12.9 |
14.0 |
(1.1) |
26.7 |
30.1 |
(3.4) |
|||||||||
Pension and postretirement |
0.2 |
0.3 |
(0.1) |
0.4 |
0.6 |
(0.2) |
|||||||||
Restructuring and other related |
1.9 |
1.9 |
- |
6.9 |
2.7 |
4.2 |
|||||||||
Consolidated Operating |
$ 29.7 |
$ 32.3 |
$ (2.6) |
(8.0)% |
$ 57.7 |
$ 52.0 |
$ 5.7 |
11.0 % |
|||||||
as a percent of revenues |
7.7 % |
7.9 % |
(20)bps |
7.6 % |
6.7 % |
90 bps |
SPX FLOW, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Unaudited; in millions) |
|||||||
Three months ended |
Six months ended |
||||||
June 29, 2019 |
June 30, 2018 |
June 29, 2019 |
June 30, 2018 |
||||
Cash flows from operating activities: |
|||||||
Net income |
$ 62.2 |
$ 23.4 |
$ 82.3 |
$ 38.7 |
|||
Less: Income from discontinued operations, net of tax |
50.7 |
8.7 |
55.6 |
12.3 |
|||
Income from continuing operations |
11.5 |
14.7 |
26.7 |
26.4 |
|||
Adjustments to reconcile income from continuing operations to net cash |
|||||||
Restructuring and other related charges |
1.9 |
1.9 |
6.9 |
2.7 |
|||
Deferred income taxes |
3.2 |
(1.5) |
8.5 |
1.6 |
|||
Depreciation and amortization |
9.8 |
10.6 |
19.4 |
21.3 |
|||
Stock-based compensation |
3.3 |
3.5 |
6.2 |
8.3 |
|||
Pension and other employee benefits |
0.6 |
1.2 |
1.0 |
3.7 |
|||
Loss (gain) on asset sales and other, net |
(0.3) |
0.1 |
(0.2) |
0.1 |
|||
Gain on change in fair value of investment in equity security |
(1.6) |
- |
(7.8) |
- |
|||
Changes in operating assets and liabilities, net of effects from |
|||||||
Accounts receivable and other assets |
30.2 |
(12.5) |
45.1 |
(13.7) |
|||
Contract assets and liabilities, net |
(20.1) |
(15.2) |
(24.0) |
(0.9) |
|||
Inventories |
(2.6) |
(16.0) |
(12.2) |
(34.2) |
|||
Accounts payable, accrued expenses and other |
(23.5) |
15.1 |
(45.9) |
(17.7) |
|||
Cash spending on restructuring actions |
(2.9) |
(5.1) |
(3.3) |
(8.5) |
|||
Net cash from (used in) continuing operations |
9.5 |
(3.2) |
20.4 |
(10.9) |
|||
Net cash from discontinued operations |
12.9 |
6.2 |
23.8 |
29.5 |
|||
Net cash from operating activities |
22.4 |
3.0 |
44.2 |
18.6 |
|||
Cash flows used in investing activities: |
|||||||
Proceeds from asset sales and other, net |
0.7 |
- |
0.7 |
- |
|||
Capital expenditures |
(7.2) |
(5.9) |
(12.5) |
(8.3) |
|||
Net cash used in continuing operations |
(6.5) |
(5.9) |
(11.8) |
(8.3) |
|||
Net cash used in discontinued operations |
(1.2) |
(1.3) |
(2.8) |
(4.1) |
|||
Net cash used in investing activities |
(7.7) |
(7.2) |
(14.6) |
(12.4) |
|||
Cash flows used in financing activities: |
|||||||
Borrowings under amended and restated senior credit facilities |
122.0 |
- |
122.0 |
- |
|||
Repayments of amended and restated senior credit facilities |
(7.0) |
- |
(7.0) |
- |
|||
Borrowings under former senior credit facilities |
11.0 |
36.3 |
33.0 |
55.8 |
|||
Repayments of former senior credit facilities |
(146.0) |
(61.3) |
(173.0) |
(115.8) |
|||
Borrowings under former trade receivables financing arrangement |
12.0 |
37.5 |
54.0 |
65.5 |
|||
Repayments of former trade receivables financing arrangement |
(12.0) |
(39.5) |
(54.0) |
(62.5) |
|||
Borrowings under other financing arrangements |
0.6 |
3.7 |
0.6 |
3.7 |
|||
Repayments of other financing arrangements |
(1.2) |
(0.6) |
(3.2) |
(3.6) |
|||
Financing fees paid |
(2.7) |
- |
(2.7) |
- |
|||
Minimum withholdings paid on behalf of employees for net share settlements, net |
(0.1) |
(0.4) |
(5.2) |
(4.4) |
|||
Dividends paid to noncontrolling interests in subsidiary |
(1.0) |
(1.2) |
(1.0) |
(2.2) |
|||
Net cash used in continuing operations |
(24.4) |
(25.5) |
(36.5) |
(63.5) |
|||
Net cash used in discontinued operations |
(0.1) |
(0.2) |
(0.2) |
(0.3) |
|||
Net cash used in financing activities |
(24.5) |
(25.7) |
(36.7) |
(63.8) |
|||
Change in cash, cash equivalents and restricted cash due to changes in |
11.0 |
(9.2) |
(2.8) |
(1.3) |
|||
Net change in cash, cash equivalents and restricted cash |
1.2 |
(39.1) |
(9.9) |
(58.9) |
|||
Consolidated cash, cash equivalents and restricted cash, beginning of |
203.2 |
245.1 |
214.3 |
264.9 |
|||
Consolidated cash, cash equivalents and restricted cash, end of period |
$ 204.4 |
$ 206.0 |
$ 204.4 |
$ 206.0 |
SPX FLOW, INC. AND SUBSIDIARIES |
|||||||
ORGANIC REVENUE RECONCILIATION |
|||||||
(Unaudited) |
|||||||
Three months ended June 29, 2019 |
|||||||
Net Revenue Decline |
Foreign Currency |
Organic Revenue Decline |
|||||
Food and Beverage |
(4.8)% |
(2.5)% |
(2.3)% |
||||
Industrial |
(5.5)% |
(2.4)% |
(3.1)% |
||||
Consolidated |
(5.2)% |
(2.5)% |
(2.7)% |
||||
Six months ended June 29, 2019 |
|||||||
Net Revenue Decline |
Foreign Currency |
Organic Revenue Growth |
|||||
Food and Beverage |
(0.8)% |
(3.6)% |
2.8 % |
||||
Industrial |
(3.2)% |
(3.5)% |
0.3 % |
||||
Consolidated |
(2.1)% |
(3.5)% |
1.4 % |
SPX FLOW, INC. AND SUBSIDIARIES |
|
Six months ended |
|
June 29, 2019 |
|
Beginning cash, cash equivalents and restricted cash |
$ 214.3 |
Net cash from operating activities |
44.2 |
Proceeds from asset sales and other, net |
0.7 |
Capital expenditures of continuing operations |
(12.5) |
Capital expenditures of discontinued operations |
(2.8) |
Borrowings under amended and restated senior credit facilities |
122.0 |
Repayments of amended and restated senior credit facilities |
(7.0) |
Borrowings under former senior credit facilities |
33.0 |
Repayments of former senior credit facilities |
(173.0) |
Borrowings under former trade receivables financing arrangement |
54.0 |
Repayments of former trade receivables financing arrangement |
(54.0) |
Borrowings under other financing arrangements |
0.6 |
Repayments of other financing arrangements |
(3.2) |
Financing fees paid |
(2.7) |
Minimum withholdings paid on behalf of employees for net share settlements, net |
(5.2) |
Dividends paid to noncontrolling interests in subsidiary |
(1.0) |
Net cash used in financing activities of discontinued operations |
(0.2) |
Change in cash, cash equivalents and restricted cash due to changes in foreign currency |
(2.8) |
Ending cash, cash equivalents and restricted cash |
$ 204.4 |
Debt and Net Debt at |
|||
June 29, 2019 |
December 31, 2018 |
||
Domestic revolving loan facility |
$ 15.0 |
$ - |
|
Term loan |
100.0 |
- |
|
Former term loan |
- |
140.0 |
|
5.625% senior notes, due in August 2024 |
300.0 |
300.0 |
|
5.875% senior notes, due in August 2026 |
300.0 |
300.0 |
|
Trade receivables financing arrangement |
- |
- |
|
Other indebtedness - continuing operations |
24.1 |
33.1 |
|
Other indebtedness - discontinued operations |
4.2 |
4.2 |
|
Less: deferred financing fees |
(7.5) |
(8.0) |
|
Total debt |
$ 735.8 |
$ 769.3 |
|
Total debt |
$ 735.8 |
$ 769.3 |
|
Less: debt under purchase card program |
(22.6) |
(23.0) |
|
Less: cash and equivalents - continuing operations |
(186.7) |
(197.0) |
|
Less: cash and equivalents - discontinued operations |
(16.8) |
(16.3) |
|
Net debt |
$ 509.7 |
$ 533.0 |
SPX FLOW, INC. AND SUBSIDIARIES |
|||||||
FREE CASH FLOW RECONCILIATION |
|||||||
(Unaudited; in millions) |
|||||||
Three months ended |
Six months ended |
||||||
June 29, 2019 |
June 30, 2018 |
June 29, 2019 |
June 30, 2018 |
||||
Net cash from operating activities - continuing and discontinued |
$ 22.4 |
$ 3.0 |
$ 44.2 |
$ 18.6 |
|||
Capital expenditures - continuing and discontinued operations |
(8.4) |
(7.2) |
(15.3) |
(12.4) |
|||
Free cash flow from (used in) operations - continuing and |
$ 14.0 |
$ (4.2) |
$ 28.9 |
$ 6.2 |
SPX FLOW, INC. AND SUBSIDIARIES |
|||||||
EBITDA RECONCILIATION |
|||||||
(Unaudited; in millions) |
|||||||
Three months ended(1) |
Six months ended(1) |
||||||
June 29, 2019 |
June 30, 2018 |
June 29, 2019 |
June 30, 2018 |
||||
Net income attributable to SPX FLOW, Inc. |
$ 62.6 |
$ 22.9 |
$ 82.1 |
$ 38.4 |
|||
Income tax provision (benefit) |
(26.3) |
11.9 |
(15.6) |
12.7 |
|||
Interest expense, net |
11.7 |
12.4 |
22.4 |
24.9 |
|||
Depreciation and amortization |
13.4 |
14.7 |
27.2 |
29.8 |
|||
EBITDA |
61.4 |
61.9 |
116.1 |
105.8 |
|||
Charges and fees associated with strategic actions |
2.4 |
- |
3.5 |
- |
|||
Fair value adjustment related to an equity security |
(1.6) |
- |
(7.8) |
- |
|||
Non-cash compensation expense |
3.6 |
4.0 |
6.8 |
11.5 |
|||
Non-service pension and postretirement related costs |
0.4 |
0.9 |
0.6 |
1.2 |
|||
Interest income |
1.8 |
1.2 |
3.8 |
3.2 |
|||
Losses (gains) on asset sales and other, net |
(0.3) |
0.2 |
(0.2) |
0.2 |
|||
Restructuring and other related charges |
1.9 |
1.1 |
6.9 |
3.7 |
|||
Foreign exchange losses (gains) |
0.4 |
(0.3) |
1.6 |
4.0 |
|||
Other |
0.2 |
0.2 |
0.4 |
0.4 |
|||
Bank consolidated EBITDA |
$ 70.2 |
$ 69.2 |
$ 131.7 |
$ 130.0 |
|||
(1) Includes the results of continuing operations and discontinued operations |
SPX FLOW, INC. AND SUBSIDIARIES |
|||
ADJUSTED DILUTED EARNINGS PER SHARE RECONCILIATION |
|||
(Unaudited) |
|||
Three months ended |
Six months ended |
||
June 29, 2019 |
June 29, 2019 |
||
Diluted earnings per share attributable to SPX FLOW, Inc. |
$ 1.47 |
$ 1.93 |
|
Less: Diluted earnings per share from is continued operations |
1.20 |
1.31 |
|
Diluted earnings per share from continuing operations |
0.27 |
0.62 |
|
Certain restructuring and other related charges, net of tax |
0.04 |
0.11 |
|
Charges and fees associated with strategic actions, net of tax |
0.01 |
0.02 |
|
Fair value adjustment related to an equity security, net of tax |
(0.03) |
(0.13) |
|
Discrete tax charges |
0.10 |
0.13 |
|
Adjusted diluted earnings per share |
$ 0.39 |
$ 0.75 |
View original content:http://www.prnewswire.com/news-releases/spx-flow-reports-second-quarter-2019-financial-results-300896828.html
SOURCE SPX FLOW, Inc.