SPX Reports First Quarter 2009 Results
Earnings per Share from Continuing Operations of
- Revenues decreased 13.9% to
$1.16 billion from$1.35 billion in the year-ago quarter. Organic revenues* declined 7.5%, completed acquisitions increased reported revenues by 0.2%, and the impact of currency fluctuations decreased reported revenues by 6.6%.
- Segment income and margins were
$125.8 million and 10.8%, compared with$160.4 million and 11.9% in the year-ago quarter.
- Diluted net income per share from continuing operations was
$0.76 , compared with$1.15 in the year-ago quarter. The current year quarter included the following notable items:- Special charges of
$11.9 million , or$0.15 per share, related to restructuring actions, - Other expense of
$12.3 million , or$0.16 per share, related primarily to foreign currency fluctuations, and - A tax benefit of
$5.2 million , or$0.10 per share, related to the finalization of certain tax matters.
- Special charges of
- Net cash used in continuing operations was
$35.3 million , compared with net cash from continuing operations of$1.0 million in the year-ago quarter. The decrease in cash flow was due primarily to decreased operating income and increased cash restructuring spend.
- Free cash flow from continuing operations* during the quarter was a negative
$50.6 million , compared with a negative$18.9 million in the year-ago quarter. The decrease was due primarily to the items noted above, offset partially by lower capital expenditures in 2009.
“We believe we are well-positioned to execute on the long-term growth opportunities in our three core end markets, global infrastructure, process equipment and diagnostic tools, and our financial strength provides us the flexibility to weather this economic downturn,” Kearney concluded.
FINANCIAL HIGHLIGHTS – CONTINUING OPERATIONS
Flow Technology
Revenues for the first quarter of 2009 were
Segment income was
Test and Measurement
Revenues for the first quarter of 2009 were
Segment income was
Thermal Equipment and Services
Revenues for the first quarter of 2009 were
Segment income was
Industrial Products and Services
Revenues for the first quarter of 2009 were
Segment income was
OTHER ITEMS
Share Repurchase Plan: On
On
During the first quarter, the company repurchased 2.4 million shares of its common stock for
Dividend: On
Discontinued Operations: During the third quarter of 2008, the company committed to a plan to divest a product line, previously reported in its Flow Technology segment. The sale of this product line was completed in the first quarter of 2009.
During the fourth quarter of 2008, the company committed to a plan to divest a product line which was previously reported in its Industrial Products and Services segment. This sale is expected to be completed in 2009.
The financial condition, results of operations, cash flows and any gain realized or loss anticipated or realized from the sale of the product lines discussed above have been reported as discontinued operations in the attached condensed consolidated financial statements.
Form 10-Q: The company expects to file its quarterly report on Form 10-Q for the quarter ended
SPX Corporation is a Fortune 500 multi-industry manufacturing leader. The company offers highly-specialized engineered solutions to solve critical problems for customers.
SPX is focused on providing solutions that support the expansion of global infrastructure, with particular emphasis on the growing worldwide demand for energy and power. Its innovative product portfolio, containing many energy efficient products, includes cooling systems for power plants throughout the world; custom engineered process equipment that assists a variety of flow processes including food and beverage manufacturing, oil and gas exploration, distribution and refinement and power generation; handheld diagnostic tools that aid in vehicle maintenance and repair; and power transformers that regulate voltage for electrical transmission and distribution by utility companies.
SPX is headquartered in
* Non-GAAP number. See attached financial schedules for reconciliation to most comparable GAAP number.
Certain statements in this press release are forward-looking statements within the meaning of 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 annual report on Form 10-K for the year ended
SPX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
Three months ended
----------------------
March 28, March 29,
2009 2008
---------- ----------
Revenues $1,162.0 $1,349.9
Costs and expenses:
Cost of products sold 829.9 946.1
Selling, general and administrative 242.5 290.3
Intangible amortization 5.2 6.7
Special charges, net 11.9 0.7
---- ---
Operating income 72.5 106.1
Other income (expense), net (12.3) 5.6
Interest expense (23.0) (31.1)
Interest income 2.1 2.3
Equity earnings in joint ventures 10.8 11.6
---- ----
Income from continuing operations before
income taxes 50.1 94.5
Income tax provision (12.1) (30.1)
----- -----
Income from continuing operations 38.0 64.4
Income (loss) from discontinued operations,
net of tax (1.6) 3.4
Loss on disposition of discontinued
operations, net of tax (12.1) (3.2)
----- ----
Income (loss) from discontinued
operations (13.7) 0.2
----- ---
Net income 24.3 64.6
Less: Net income (loss) attributable to non
controlling interest (0.1) 3.2
----- -----
Net income attributable to SPX Corporation $24.4 $61.4
===== =====
Amounts attributable to SPX Corporation
common shareholders:
Income from continuing operations for diluted
income per share $38.4 $62.4
Discontinued operations, net of tax (14.0) (1.0)
----- ----
Net income for diluted income per share $24.4 $61.4
===== =====
Basic income per share of common stock
Income from continuing operations
attributable to SPX Corporation common
shareholders $0.77 $1.17
Loss from discontinued operations
attributable to SPX Corporation common
shareholders (0.28) (0.02)
----- -----
Net income per share attributable
to SPX Corporation common
shareholders $0.49 $1.15
===== =====
Weighted average number of common shares
outstanding - basic 49.952 53.158
Diluted income per share of common stock
Income from continuing operations
attributable to SPX Corporation common
shareholders $0.76 $1.15
Loss from discontinued operations
attributable to SPX Corporation common
shareholders (0.28) (0.02)
----- -----
Net income per share attributable
to SPX Corporation common
shareholders $0.48 $1.13
===== =====
Weighted average number of common shares
outstanding - diluted 50.278 54.144
SPX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions)
March 28, December 31,
2009 2008
---- ----
ASSETS
Current assets:
Cash and equivalents $430.9 $475.9
Accounts receivable, net 1,221.8 1,306.9
Inventories, net 649.1 667.0
Other current assets 130.7 180.6
Deferred income taxes 80.1 101.5
Assets of discontinued operations 53.2 96.8
---- ----
Total current assets 2,565.8 2,828.7
Property, plant and equipment
Land 35.9 36.3
Buildings and leasehold improvements 224.0 223.7
Machinery and equipment 677.2 678.3
----- -----
937.1 938.3
Accumulated depreciation (442.3) (437.7)
------ ------
Net property, plant and equipment 494.8 500.6
Goodwill 1,757.2 1,779.7
Intangibles, net 631.7 646.8
Other assets 384.5 382.3
----- -----
TOTAL ASSETS $5,834.0 $6,138.1
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $545.3 $634.0
Accrued expenses 995.4 1,156.2
Income taxes payable 41.9 24.6
Short-term debt 135.3 112.9
Current maturities of long-term debt 76.4 76.4
Liabilities of discontinued operations 10.7 20.2
---- ----
Total current liabilities 1,805.0 2,024.3
Long-term debt 1,270.5 1,155.4
Deferred and other income taxes 87.5 124.7
Other long-term liabilities 787.7 788.9
----- -----
Total long-term liabilities 2,145.7 2,069.0
Equity:
SPX Corporation shareholders' equity:
Common stock 975.2 972.3
Paid-in capital 1,392.7 1,393.9
Retained earnings 2,252.7 2,240.5
Accumulated other comprehensive loss (243.6) (179.9)
Common stock in treasury (2,523.7) (2,416.0)
-------- --------
Total SPX Corporation shareholders'
equity 1,853.3 2,010.8
Noncontrolling interest 30.0 34.0
---- ----
Total equity 1,883.3 2,044.8
------- -------
TOTAL LIABILITIES AND EQUITY $5,834.0 $6,138.1
======== ========
SPX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Three months ended
----------------------
March 28, March 29,
2009 2008
---------- ----------
Cash flows from (used in) operating
activities:
Net income $24.3 $64.6
Less: Income (loss) from discontinued
operations, net of tax (13.7) 0.2
----- ---
Income from continuing operations 38.0 64.4
Adjustments to reconcile income from
continuing operations to net cash from
(used in) operating activities
Special charges, net 11.9 0.7
Deferred and other income taxes - (16.8)
Depreciation and amortization 25.1 26.6
Pension and other employee benefits 13.9 15.1
Stock-based compensation 9.2 16.0
Other, net 18.9 2.8
Changes in operating assets and
liabilities, net of effects from acquisitions
and divestitures
Accounts receivable and other assets 40.6 (88.1)
Inventories 11.4 (39.6)
Accounts payable, accrued expenses
and other (186.5) 22.5
Cash spending on restructuring actions (17.8) (2.6)
----- ----
Net cash from (used in) continuing operations (35.3) 1.0
Net cash used in discontinued operations (3.9) (6.7)
---- ----
Net cash used in operating activities (39.2) (5.7)
Cash flows from (used in) investing
activities:
Decrease in restricted cash 7.8 -
Business acquisitions and investments, net
of cash acquired - (0.4)
Capital expenditures (15.3) (19.9)
----- -----
Net cash used in continuing operations (7.5) (20.3)
Net cash from (used in) discontinued
operations 18.6 (1.6)
---- ----
Net cash from (used in) investing activities 11.1 (21.9)
Cash flows from (used in) financing
activities:
Borrowings under revolving loan facilities 297.0 436.0
Repayments under revolving loan facilities (182.0) (316.0)
Borrowings under trade receivables
agreement 75.0 70.0
Repayments under trade receivables
agreement (42.0) (116.0)
Net repayments under other financing
arrangements (11.1) (20.3)
Purchases of common stock (113.2) -
Minimum tax withholdings paid on behalf
of employees for net share settlements,
net of proceeds from the exercise
of employee stock options and other (5.6) (0.5)
Purchase of noncontrolling interest in
subsidiary (3.2) -
Dividends paid (13.1) (13.2)
----- -----
Net cash from continuing operations 1.8 40.0
Net cash from (used in) discontinued
operations 0.2 (0.2)
--- ----
Net cash from financing activities 2.0 39.8
Change in cash and equivalents due to
changes in foreign exchange rates (18.9) 18.5
Net change in cash and equivalents (45.0) 30.7
Consolidated cash and equivalents, beginning
of period 475.9 354.1
----- -----
Consolidated cash and equivalents, end of
period $430.9 $384.8
====== ======
Cash and equivalents of continuing operations $430.9 $384.8
SPX CORPORATION AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(Unaudited; in millions)
Three months ended
---------------------
March 28, March 29,
2009 2008 %
--------- ---------- ---
Flow Technology
Revenues $394.0 $492.1 -19.9%
Gross profit 130.5 146.8
Selling, general and administrative expense 77.6 97.1
Intangible amortization expense 2.8 3.0
--- ---
Segment income $50.1 $46.7 7.3%
===== =====
as a percent of revenues 12.7% 9.5%
Test and Measurement
Revenues $196.0 $270.0 -27.4%
Gross profit 53.0 84.5
Selling, general and administrative expense 45.5 58.6
Intangible amortization expense 1.7 2.0
--- ---
Segment income $5.8 $23.9 -75.7%
==== =====
as a percent of revenues 3.0% 8.9%
Thermal Equipment and Services
Revenues $342.2 $346.8 -1.3%
Gross profit 72.8 89.9
Selling, general and administrative expense 50.8 52.0
Intangible amortization expense 0.6 1.5
--- ---
Segment income $21.4 $36.4 -41.2%
===== =====
as a percent of revenues 6.3% 10.5%
Industrial Products and Services
Revenues $229.8 $241.0 -4.6%
Gross profit 78.5 85.2
Selling, general and administrative expense 29.9 31.6
Intangible amortization expense 0.1 0.2
--- ---
Segment income $48.5 $53.4 -9.2%
===== =====
as a percent of revenues 21.1% 22.2%
Total segment income $125.8 $160.4
Corporate expenses 23.3 30.2
Pension and postretirement expense 8.9 7.4
Stock-based compensation expense 9.2 16.0
Special charges, net 11.9 0.7
---- ---
Consolidated Operating Income $72.5 $106.1 -31.7%
===== ======
SPX CORPORATION AND SUBSIDIARIES
ORGANIC REVENUE GROWTH RECONCILIATION
(Unaudited)
Three Months ended March 28, 2009
--------------------------------------------
Organic
Net Revenue
Revenue Foreign Growth
Decline Acquisitions Currency (Decline)
------- ------------ -------- ---------
Flow Technology (19.9)% -% (10.1)% (9.8)%
Test and Measurement (27.4)% 0.8% (6.9)% (21.3)%
Thermal Equipment and
Services (1.3)% -% (5.5)% 4.2%
Industrial Products and
Services (4.6)% -% (1.1)% (3.5)%
Consolidated (13.9)% 0.2% (6.6)% (7.5)%
SPX CORPORATION AND SUBSIDIARIES
FREE CASH FLOW RECONCILIATION
(Unaudited; in millions)
Three months ended
------------------------------
March 28, 2009 March 29, 2008
-------------- --------------
Net cash from (used in) continuing operations $(35.3) $1.0
Capital expenditures - continuing operations (15.3) (19.9)
----- -----
Free cash flow used in continuing
operations $(50.6) $(18.9)
====== ======
SPX CORPORATION AND SUBSIDIARIES
CASH AND DEBT RECONCILIATION
(Unaudited; in millions)
Three months ended
March 28, 2009
--------------
Beginning cash and equivalents $475.9
Operational cash flow (35.3)
Capital expenditures (15.3)
Decrease in restricted cash 7.8
Borrowings under revolving loan facilities 297.0
Repayments under revolving loan facilities (182.0)
Net repayments under other financing arrangements (11.1)
Net borrowing under trade receivable agreement 33.0
Purchases of common stock (113.2)
Minimum tax withholdings paid on behalf of employees
for net share settlements, net of proceeds from
the exercise of employee stock options and other (5.6)
Purchase of noncontrolling interest in subsidiary (3.2)
Dividends paid (13.1)
Cash from discontinued operations 14.9
Change in cash due to change in foreign exchange rates (18.9)
-----
Ending cash and equivalents $430.9
======
Debt at Debt at
12/31/2008 Borrowings Repayments Other 3/28/2009
---------- ---------- ---------- ----- ---------
Term loan $675.0 $- $- $- $675.0
Domestic revolving
loan facility 65.0 297.0 (182.0) - 180.0
7.625% senior notes 500.0 - - - 500.0
7.50% senior notes 28.2 - - - 28.2
6.25% senior notes 21.3 - - - 21.3
Trade receivables
financing arrangement - 75.0 (42.0) - 33.0
Other indebtedness 55.2 - (11.1) 0.6 44.7
---- --- ----- --- ----
Totals $1,344.7 $372.0 $(235.1) $0.6 $1,482.2
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SOURCE SPX Corporation