SPX Technologies, Inc. [SPXC] Filings

10-Q 1 spxc-20240629.htm 10-Q spxc-20240629

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-6948

SPX TECHNOLOGIES, INC.

(Exact Name of registrant as specified in its charter)


Delaware						88-3567996
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

6325 Ardrey Kell Road, Suite 400, Charlotte, North Carolina 28277

(Address of principal executive offices) (Zip Code)

(980) 474-3700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols(s)	Name of each exchange on which registered
Common Stock, par value $0.01	SPXC	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No.

Common shares outstanding July 26, 2024, 46,295,232

SPX TECHNOLOGIES, INC. AND SUBSIDIARIES

FORM 10-Q INDEX



PART 1 – FINANCIAL INFORMATION

Item 1 – Financial Statements
Condensed Consolidated Statements of Operations and Comprehensive Income						3
Condensed Consolidated Balance Sheets						4
Condensed Consolidated Statements of Stockholders' Equity						5
Condensed Consolidated Statements of Cash Flows						6
Notes to Condensed Consolidated Financial Statements						7
Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations						29
Item 3 – Quantitative and Qualitative Disclosures About Market Risk						39
Item 4 – Controls and Procedures						39

PART 2 – OTHER INFORMATION
Item 1 – Legal Proceedings						40
Item 1A – Risk Factors						40

Item 5 – Other Information						40
Item 6 – Exhibits						40

SIGNATURES						41

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

SPX TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited; in millions, except per share amounts)


	Three months ended				Six months ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues	$	501.3	$	423.3	$	966.5	$	823.1
Costs and expenses:
Cost of products sold	300.5		259.7		582.8		509.6
Selling, general and administrative	101.2		100.8		204.1		194.6
Intangible amortization	16.8		11.5		31.6		17.8
Special charges, net	(0.2)		—		0.4		—

Other operating expense, net	8.4		—		8.4		—
Operating income	74.6		51.3		139.2		101.1

Other income (expense), net	(1.7)		—		(5.7)		2.5
Interest expense	(12.8)		(5.4)		(22.6)		(7.8)
Interest income	0.3		0.2		0.6		0.7


Income from continuing operations before income taxes	60.4		46.1		111.5		96.5
Income tax provision	(15.2)		(7.8)		(17.1)		(19.1)
Income from continuing operations	45.2		38.3		94.4		77.4

Income (loss) from discontinued operations, net of tax	—		—		—		—
Gain (loss) on disposition of discontinued operations, net of tax	(1.0)		(2.3)		(1.2)		1.4
Income (loss) from discontinued operations, net of tax	(1.0)		(2.3)		(1.2)		1.4

Net income	$	44.2	$	36.0	$	93.2	$	78.8

Basic income per share of common stock:
Income from continuing operations	$	0.98	$	0.84	$	2.05	$	1.70
Income (loss) from discontinued operations, net of tax	(0.02)		(0.05)		(0.03)		0.03
Net income per share	$	0.96	$	0.79	$	2.02	$	1.73

Weighted-average number of common shares outstanding — basic	46.246		45.533		46.038		45.457

Diluted income per share of common stock:
Income from continuing operations	$	0.96	$	0.82	$	2.01	$	1.66
Income (loss) from discontinued operations, net of tax	(0.02)		(0.05)		(0.02)		0.03
Net income per share	$	0.94	$	0.77	$	1.99	$	1.69

Weighted-average number of common shares outstanding — diluted	47.158		46.627		46.901		46.500

Comprehensive income	$	38.2	$	39.2	$	77.0	$	83.8

The accompanying notes are an integral part of these statements.

SPX TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share data)


	June 29, 2024		December 31, 2023
ASSETS
Current assets:
Cash and equivalents	$	128.1	$	99.4
Accounts receivable, net	325.9		279.8
Contract assets	32.0		16.6
Inventories, net	292.7		276.7
Other current assets	30.0		37.1



Total current assets	808.7		709.6
Property, plant and equipment:
Land	23.2		17.9
Buildings and leasehold improvements	119.4		73.4
Machinery and equipment	297.5		264.4
	440.1		355.7
Accumulated depreciation	(221.4)		(215.2)
Property, plant and equipment, net	218.7		140.5
Goodwill	845.0		704.8
Intangibles, net	742.7		680.8
Other assets	154.2		188.9
Deferred income taxes	3.5		4.0

Assets of DBT and Heat Transfer (includes cash and equivalents of $4.9 and $5.5 at June 29, 2024 and December 31, 2023, respectively) (Note 3)	10.3		11.1
TOTAL ASSETS	$	2,783.1	$	2,439.7

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	128.2	$	118.7
Contract liabilities	61.7		73.5
Accrued expenses	150.7		168.5
Income taxes payable	12.3		5.3
Short-term debt	256.3		17.9
Current maturities of long-term debt	24.1		17.3


Total current liabilities	633.3		401.2

Long-term debt	509.9		523.1
Deferred and other income taxes	102.9		77.0
Other long-term liabilities	213.2		204.1

Liabilities of DBT and Heat Transfer (Note 3)	40.0		39.7
Total long-term liabilities	866.0		843.9
Commitments and contingent liabilities (Note 15)
Stockholders' Equity:

Common stock (54,120,924 and 46,289,384 issued and outstanding at June 29, 2024, respectively, and 53,618,720 and 45,674,572 issued and outstanding at December 31, 2023, respectively)	0.5		0.5
Paid-in capital	1,359.1		1,353.6
Retained earnings	131.5		38.3
Accumulated other comprehensive income	244.9		261.1
Common stock in treasury (7,831,540 and 7,944,148 shares at June 29, 2024 and December 31, 2023, respectively)	(452.2)		(458.9)


Total stockholders' equity	1,283.8		1,194.6
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,783.1	$	2,439.7

The accompanying notes are an integral part of these statements.

SPX TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited; in millions)


	Three months ended June 29, 2024
	Common Stock		Paid-In Capital		Retained Earnings		Accum. Other Comprehensive Income		Common Stock In Treasury		Total Stockholders’ Equity
Balance at March 30, 2024	$	0.5	$	1,351.6	$	87.3	$	250.9	$	(452.8)	$	1,237.5
Net income	—		—		44.2		—		—		44.2
Other comprehensive loss, net	—		—		—		(6.0)		—		(6.0)
Incentive plan activity	—		4.5		—		—		—		4.5
Long-term incentive compensation expense	—		3.7		—		—		—		3.7
Restricted stock unit vesting	—		(0.7)		—		—		0.6		(0.1)

Balance at June 29, 2024	$	0.5	$	1,359.1	$	131.5	$	244.9	$	(452.2)	$	1,283.8


	Six months ended June 29, 2024
	Common Stock		Paid-In Capital		Retained Earnings		Accum. Other Comprehensive Income		Common Stock In Treasury		Total Stockholders’ Equity
Balance at December 31, 2023	$	0.5	$	1,353.6	$	38.3	$	261.1	$	(458.9)	$	1,194.6
Net income	—		—		93.2		—		—		93.2
Other comprehensive loss, net	—		—		—		(16.2)		—		(16.2)
Incentive plan activity	—		14.3		—		—		—		14.3
Long-term incentive compensation expense	—		7.0		—		—		—		7.0
Restricted stock unit vesting	—		(15.8)		—		—		6.7		(9.1)

Balance at June 29, 2024	$	0.5	$	1,359.1	$	131.5	$	244.9	$	(452.2)	$	1,283.8


	Three months ended July 1, 2023
	Common Stock		Paid-In Capital		Retained Earnings (Deficit)		Accum. Other Comprehensive Income		Common Stock In Treasury		Total Stockholders’ Equity
Balance at April 1, 2023	$	0.5	$	1,335.3	$	(8.8)	$	259.3	$	(460.2)	$	1,126.1
Net income	—		—		36.0		—		—		36.0
Other comprehensive income, net	—		—		—		3.2		—		3.2
Incentive plan activity	—		3.0		—		—		—		3.0
Long-term incentive compensation expense	—		3.5		—		—		—		3.5
Restricted stock unit vesting	—		(0.3)		—		—		1.1		0.8

Balance at July 1, 2023	$	0.5	$	1,341.5	$	27.2	$	262.5	$	(459.1)	$	1,172.6


	Six months ended July 1, 2023
	Common Stock		Paid-In Capital		Retained Earnings (Deficit)		Accum. Other Comprehensive Income		Common Stock In Treasury		Total Stockholders’ Equity
Balance at December 31, 2022	$	0.5	$	1,338.3	$	(51.6)	$	257.5	$	(465.5)	$	1,079.2
Net income	—		—		78.8		—		—		78.8
Other comprehensive income, net	—		—		—		5.0		—		5.0
Incentive plan activity	—		8.2		—		—		—		8.2
Long-term incentive compensation expense	—		6.6		—		—		—		6.6
Restricted stock unit vesting	—		(11.6)		—		—		6.4		(5.2)

Balance at July 1, 2023	$	0.5	$	1,341.5	$	27.2	$	262.5	$	(459.1)	$	1,172.6

The accompanying notes are an integral part of these statements.

SPX TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)


	Six months ended
	June 29, 2024		July 1, 2023
Cash flows from (used in) operating activities:
Net income	$	93.2	$	78.8
Less: Gain (loss) from discontinued operations, net of tax	(1.2)		1.4
Income from continuing operations	94.4		77.4
Adjustments to reconcile income from continuing operations to net cash from operating activities:
Special charges, net	0.4		—
(Gain) loss on change in fair value of equity security	4.2		(3.6)


Deferred and other income taxes	(10.6)		(10.4)
Depreciation and amortization	44.4		26.7
Pension and other employee benefits	6.9		5.7
Long-term incentive compensation	7.0		6.6
Other, net	(3.0)		(3.0)
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures:
Accounts receivable and other assets	(29.8)		4.9
Inventories	(10.7)		(27.0)
Accounts payable, accrued expenses and other	(33.0)		(2.7)
Cash spending on restructuring actions	(0.8)		—
Net cash from continuing operations	69.4		74.6
Net cash used in discontinued operations	(1.4)		(7.0)
Net cash from operating activities	68.0		67.6
Cash flows from (used in) investing activities:
Proceeds/borrowings related to company-owned life insurance policies, net	42.9		1.0
Business acquisitions, net of cash acquired	(294.1)		(547.1)

Capital expenditures	(20.3)		(8.7)

Net cash used in continuing operations	(271.5)		(554.8)
Net cash used in discontinued operations	—		—
Net cash used in investing activities	(271.5)		(554.8)
Cash flows from (used in) financing activities:

Borrowings under senior credit facilities	575.2		820.0
Repayments under senior credit facilities	(382.0)		(420.0)
Borrowings under trade receivables arrangement	132.0		61.0
Repayments under trade receivables arrangement	(93.0)		(31.0)
Net repayments under other financing arrangements	(0.8)		(0.1)

Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options	(0.9)		(2.4)
Financing fees paid	—		(1.3)




Net cash from continuing operations	230.5		426.2
Net cash from discontinued operations	—		—
Net cash from financing activities	230.5		426.2
Change in cash and equivalents due to changes in foreign currency exchange rates	1.1		(0.5)
Net change in cash and equivalents	28.1		(61.5)
Consolidated cash and equivalents, beginning of period	104.9		157.1
Consolidated cash and equivalents, end of period	$	133.0	$	95.6


	Six months ended
	June 29, 2024		July 1, 2023
Components of cash and equivalents:
Cash and equivalents	$	128.1	$	87.1
Cash and equivalents included in assets of DBT and Heat Transfer	4.9		8.5
Total cash and equivalents	$	133.0	$	95.6

The accompanying notes are an integral part of these statements.

SPX TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited; in millions, except per share data)

(1) BASIS OF PRESENTATION

Unless otherwise indicated, “we,” “us” and “our” mean SPX Technologies, Inc. and its consolidated subsidiaries (“SPX” or the “Company”).

We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States (“GAAP”) can be condensed or omitted. The financial statements represent our accounts after the elimination of intercompany transactions and, in our opinion, include the adjustments (consisting only of normal and recurring items) necessary for their presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note 3 for information on discontinued operations).

We account for investments in unconsolidated companies where we exercise significant influence but do not have control using the equity method. In determining whether we are the primary beneficiary of a variable interest entity (“VIE”), we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine which party has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and which party has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. All of our VIE’s are immaterial, individually and in aggregate, to our condensed consolidated financial statements.

Acquisition of TAMCO

On April 3, 2023, we completed the acquisition of T. A. Morrison & Co. Inc. (“TAMCO”), a market leader in motorized and non-motorized dampers that control airflow in large-scale specialty applications in commercial, industrial, and institutional markets. We purchased TAMCO for cash consideration of $125.5, inclusive of an adjustment to the purchase price of $0.2 paid during the third quarter of 2023 related to acquired working capital, and net of cash acquired of $1.0. The post-acquisition operating results of TAMCO are reflected within our HVAC reportable segment.

Acquisition of ASPEQ

On June 2, 2023, we completed the acquisition of ASPEQ Heating Group (“ASPEQ”), a leading provider of electrical heating solutions to customers in industrial and commercial markets. We purchased ASPEQ for cash consideration of $421.5, net of (i) an adjustment to the purchase price of $0.3 received during the fourth quarter of 2023 related to acquired working capital and (ii) cash acquired of $0.9. The post-acquisition operating results of ASPEQ are reflected within our HVAC reportable segment.

Acquisition of Ingénia

On February 7, 2024, we completed the acquisition of Ingénia Technologies Inc. (“Ingénia”) which specializes in the design and manufacture of custom air handling units that demand high levels of precision and reliability in healthcare, pharmaceutical, education, food processing and industrial end markets. We purchased Ingénia for cash consideration of $294.1, net of cash acquired of $1.5. Under the terms of the purchase and sales agreement, the seller is eligible for additional cash consideration of up to Canadian Dollar (“CAD”) 3.0 (or $2.2 at the time of acquisition), with payment scheduled to be made in the event certain contingent liabilities do not materialize. The estimated fair value of such contingent consideration is $0.3, which is reflected as a liability in our condensed consolidated balance sheet as of June 29, 2024. The post-acquisition results of Ingénia are reflected within our HVAC reportable segment.

The assets acquired and liabilities assumed in the Ingénia transaction have been recorded at estimates of fair value as determined by management, based on information available and assumptions as to future operations and are subject to change, primarily for the final assessment and valuation of certain income tax amounts.

Other

Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2023 (“our 2023 Annual Report on Form 10-K”). Interim results are not necessarily indicative of full year results.

We establish actual interim closing dates using a fiscal calendar, which requires our businesses to close their books on the Saturday closest to the end of the first calendar quarter, with the second and third quarters being 91 days in length. Our fourth quarter ends on December 31. The interim closing dates for the first, second and third quarters of 2024 are March 30, June 29, and September 28, compared to the respective April 1, July 1, and September 30, dates of 2023. We had one less day in the first quarter of 2024, and will have two more days in the fourth quarter of 2024 than in the respective 2023 periods. It is not practicable to estimate the impact of the one less day on our consolidated operating results for the six months ended June 29, 2024, when compared to the consolidated operating results for the respective 2023 period.

(2) NEW ACCOUNTING PRONOUNCEMENTS

The following is a summary of new accounting pronouncements that apply or may apply to our business.

In November 2023, the FASB issued ASU No. 2023-07. Among other new disclosure requirements, ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker. ASU 2023-07 will be effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the disclosure impact of ASU 2023-07; however, the standard will not have an impact on the Company’s condensed consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU No. 2023-09, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. We are currently evaluating the disclosure impact of ASU 2023-09; however, the standard will not have an impact on the Company’s condensed consolidated financial position, results of operations or cash flows.

(3) ACQUISITIONS AND DISCONTINUED OPERATIONS

Acquisitions

As indicated in Note 1, on April 3, 2023, we completed the acquisition of TAMCO. The pro forma effect of this acquisition is not material to our condensed consolidated results of operations.

Acquisition of Ingénia

As indicated in Note 1, on February 7, 2024, we completed the acquisition of Ingénia, for $294.1, net of cash acquired of $1.5. We financed the acquisition with available borrowings on our revolving credit facilities under our senior credit facilities. The assets acquired and liabilities assumed have been recorded at preliminary estimates of fair value as determined by management, based on information currently available and on current assumptions as to future operations and are subject to change upon completion of the acquisition method of accounting. Final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the acquisition date, as permitted under GAAP. The excess of the purchase price over the total of the estimated fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed is recognized as goodwill. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed for Ingénia, we engaged a third-party independent valuation specialist.

The following is a summary of the recorded preliminary fair values of the assets acquired and liabilities assumed for Ingénia as of February 7, 2024:


Assets acquired:
Current assets, including cash and equivalents of $1.5	$	33.5
Property, plant and equipment	73.6
Goodwill	141.6
Intangible assets	97.9

Total assets acquired	346.6

Current liabilities assumed	13.1
Non-current liabilities assumed (1)	37.9

Net assets acquired	$	295.6

___________________________

(1) Includes net deferred income tax liabilities and other liabilities of $37.8 and $0.1, respectively.

The identifiable intangible assets acquired consist of technology, customer relationships, trademarks, and customer backlog of $46.7, $23.5, $13.9, and $13.8, respectively, with such amounts based on a preliminary assessment of the related fair values. We expect to amortize the technology, customer relationships, trademarks, and customer backlog assets over 12.0, 7.0, 8.0, and 1.0 years, respectively.

We acquired gross receivables of $18.2, which had the same fair value at the acquisition date based on our estimates of cash flows expected to be recovered.

The qualitative factors that comprise the recorded goodwill include expected market growth for Ingénia's existing operations, increased volumes achieved by selling Ingénia’s products through existing SPX sales channels, procurement and operational savings and efficiencies, and various other factors. We expect none of the goodwill described above to be deductible for tax purposes.

We recognized revenues and net income for Ingénia of $21.6 and $1.7, and $34.1 and $2.3, respectively, for the three and six months ended June 29, 2024 with net income impacted by charges during the three and six months ended June 29, 2024 of (i) $5.3 and $8.6, respectively, associated with amortization of the various intangible assets mentioned above and (ii) $0.9 and $1.8, respectively, associated with the excess fair value (over historical cost) of inventory acquired which was subsequently sold.

Additionally, during the three and six months ended June 29, 2024, we incurred acquisition-related costs for Ingénia of $0.6 and $2.9, respectively, which have been recorded to “Selling, general and administrative” within our condensed consolidated statements of operations and “Corporate expense” within consolidated operating income, as further described in Note 6.

Acquisition of ASPEQ

As indicated in Note 1, on June 2, 2023, we completed the acquisition of ASPEQ for $421.5, net of (i) an adjustment to the purchase price of $0.3 received during the fourth quarter of 2023 related to acquired working capital and (ii) cash acquired of $0.9. We financed the acquisition with available cash and borrowings under our senior credit facilities. The excess of the purchase price over the total of the fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed is recognized as goodwill. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed for ASPEQ, we engaged a third-party independent valuation specialist.

The following is a summary of the recorded final fair values of the assets acquired and liabilities assumed for ASPEQ as of June 2, 2023:


Assets acquired:
Current assets, including cash and equivalents of $0.9	$	38.0
Property, plant and equipment	10.6
Goodwill	195.0
Intangible assets	246.1
Other assets	1.2
Total assets acquired	490.9

Current liabilities assumed	11.1
Non-current liabilities assumed (1)	57.4

Net assets acquired	$	422.4

________________________________

(1)Includes net deferred income tax liabilities and other liabilities of $56.4 and $1.0, respectively.

The identifiable intangible assets acquired consist of customer relationships, trademarks, technology, and customer backlog of $142.3, $51.5, $47.8, and $4.5, respectively, with such amounts based on a final assessment of the related fair values. We expect to amortize the ASPEQ customer relationships, technology, and customer backlog assets over 12.0, 16.0, and 1.0 years, respectively, with the trademarks acquired being indefinite-lived.

We acquired gross receivables of $18.0, which had a fair value at the acquisition date of $17.8, respectively, based on our estimates of cash flows expected to be recovered.

The qualitative factors that comprise the recorded goodwill include expected market growth for ASPEQ’s existing operations, increased volumes achieved by selling ASPEQ’s products through existing SPX sales channels, procurement and operational savings and efficiencies, and various other factors.

The following unaudited pro forma information presents our condensed consolidated results of operations for the three and six months ended June 29, 2024 and July 1, 2023, respectively, as if the acquisitions of Ingénia and ASPEQ had taken place on January 1, 2023 and January 1, 2022, respectively. The unaudited pro forma financial information is not intended to represent or be indicative of our condensed consolidated results of operations that would have been reported had the acquisitions been completed as of the dates presented, and should not be taken as representative of our future consolidated results of operations. The pro forma results include estimates and assumptions that management believes are reasonable; however, these results do not include any anticipated cost savings or expenses of the planned integration of Ingénia and ASPEQ. These pro forma consolidated results of operations have been prepared for comparative purposes only and include additional interest expense on the borrowings required to finance the acquisitions, additional depreciation and amortization expense associated with fair value adjustments to the acquired property, plant and equipment and intangible assets, adjustments to reflect charges associated with acquisition and integration-related costs and charges associated with the excess fair value (over historical cost) of inventory acquired and subsequently sold as if they were incurred during the first quarter of 2023 for Ingénia and first quarter of 2022 for ASPEQ, and the related income tax effects.


	Three months ended				Six months ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues	$	501.3	$	457.9	$	974.5	$	903.6
Income from continuing operations	49.0		36.1		99.3		65.8
Net income	48.0		33.8		98.1		67.2

Income from continuing operations per share of common stock:
Basic	$	1.06	$	0.79	$	2.16	$	1.45
Diluted	$	1.04	$	0.77	$	2.12	$	1.42

Net income per share of common stock:
Basic	$	1.04	$	0.74	$	2.13	$	1.48
Diluted	$	1.02	$	0.72	$	2.09	$	1.45

Wind-Down of DBT Business

We completed the wind-down of our DBT Technologies (PTY) LTD (“DBT”) business after ceasing all operations, including those related to two large power projects in South Africa (Kusile and Medupi), in the fourth quarter of 2021. As a result of completing the wind-down plan, we are reporting DBT as a discontinued operation for all periods presented. As previously disclosed, DBT had asserted claims against the remaining prime contractor on the large projects, Mitsubishi Heavy Industries Power — ZAF (f.k.a. Mitsubishi-Hitachi Power Systems Africa (PTY) LTD) (“MHI”), which had also asserted claims against DBT.

As previously disclosed in our 2023 Annual Report on Form 10-K, on September 5, 2023, DBT and SPX entered into an agreement with MHI to resolve all claims between the parties with respect to the two large power projects in South Africa (the “Settlement Agreement”). The Settlement Agreement provides for full and final settlement and mutual release of all claims between the parties with respect to the projects, including any claim against SPX Technologies, Inc. as guarantor of DBT's performance on the projects. It also provides that the underlying subcontracts are terminated and all obligations of both parties under the subcontracts have been satisfied in full.

Prior to the Settlement Agreement, on February 22, 2021, a dispute adjudication panel issued a ruling in favor of DBT against MHI related to costs incurred in connection with delays on two units of the Kusile project. In connection with the ruling, DBT received South African Rand 126.6 (or $8.6 at the time of payment). This ruling was subject to final and binding arbitration in this matter. In March 2023, an arbitration tribunal upheld the decision of the dispute adjudication panel. As a result, South African Rand 126.6 (or $7.0) was recorded as income during the first quarter of 2023, with such amount recorded within “Gain (loss) on disposition of discontinued operations, net of tax.” Further, in June 2023, the arbitration tribunal ruled DBT was entitled to recover $1.3 of legal costs incurred related to the arbitration. Additionally, in May 2023, a separate arbitration tribunal ruled DBT was entitled to recover $5.5 of legal costs incurred related to another prior arbitration. Such amounts were recorded within “Gain (loss) on disposition of discontinued operations, net of tax” during the quarter ended July 1, 2023.

The assets and liabilities of DBT have been included within “Assets of DBT and Heat Transfer” and “Liabilities of DBT and Heat Transfer,” respectively, on the condensed consolidated balance sheets as of June 29, 2024 and December 31, 2023. The major line items constituting DBT’s assets and liabilities as of June 29, 2024 and December 31, 2023 are shown below:


	June 29, 2024		December 31, 2023
ASSETS
Cash and equivalents	$	4.9	$	5.5
Accounts receivable, net	—		0.4
Other current assets(1)	5.1		4.7
Property, plant and equipment:
Buildings and leasehold improvements	—		0.2
Machinery and equipment	—		0.5
	—		0.7
Accumulated depreciation	—		(0.6)
Property, plant and equipment, net	—		0.1

Total assets of DBT	$	10.0	$	10.7
LIABILITIES
Accounts payable(2)	$	27.1	$	26.9
Contract liabilities(1)	2.1		2.1
Accrued expenses(1)	5.9		6.3
Other long-term liabilities(1)	4.7		4.2
Total liabilities of DBT	$	39.8	$	39.5

___________________________

(1) Recorded amounts relate primarily to disputed amounts due to or from a subcontractor engaged by DBT during the Kusile project, that is currently in liquidation. The timing of the ultimate resolution of these matters is uncertain as they are likely to occur as part of the liquidation process.

(2) Includes DBT's remaining obligation under the Settlement Agreement to make a payment to MHI of South African Rand 480.9 (or $26.4 and $26.2 at June 29, 2024 and December 31, 2023, respectively), due in September 2024. In connection with this remaining

obligation, we entered into a foreign currency forward contract which we are accounting for as a fair value hedge. Refer to Note 14 for additional details.

Wind-Down of the Heat Transfer Business

We completed the wind-down of our SPX Heat Transfer (“Heat Transfer”) business in the fourth quarter of 2020. As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all periods presented.

The assets and liabilities of Heat Transfer have been included within “Assets of DBT and Heat Transfer” and “Liabilities of DBT and Heat Transfer,” respectively, on the condensed consolidated balance sheets as of June 29, 2024 and December 31, 2023. The major line items constituting Heat Transfer’s assets and liabilities as of June 29, 2024 and December 31, 2023 are shown below:


	June 29, 2024		December 31, 2023
ASSETS


Other current assets	$	0.3	$	0.3
Other assets	—		0.1
Total assets of Heat Transfer	$	0.3	$	0.4
LIABILITIES
Accounts payable	$	0.2	$	0.2

Total liabilities of Heat Transfer	$	0.2	$	0.2

Changes in estimates associated with liabilities retained in connection with a business divestiture (e.g. income taxes) may occur. As a result, it is possible that the resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods.

For the three and six months ended June 29, 2024 and July 1, 2023, results of operations from our businesses reported as discontinued operations were as follows:


	Three months ended				Six months ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023





DBT
Income (loss) from discontinued operations (1)	$	(0.4)	$	(2.4)	$	(0.6)	$	0.6
Income tax (provision) benefit	(0.2)		0.2		—		0.9
Income (loss) from discontinued operations, net	(0.6)		(2.2)		(0.6)		1.5






All other
Loss from discontinued operations (2)	(0.2)		(0.1)		(0.4)		(0.1)
Income tax provision	(0.2)		—		(0.2)		—
Loss from discontinued operations, net	(0.4)		(0.1)		(0.6)		(0.1)

Total
Income (loss) from discontinued operations	(0.6)		(2.5)		(1.0)		0.5
Income tax (provision) benefit	(0.4)		0.2		(0.2)		0.9
Income (loss) from discontinued operations, net	$	(1.0)	$	(2.3)	$	(1.2)	$	1.4

________________________________

(1)Income for the six months ended July 1, 2023 resulted primarily from income recorded in connection with the dispute resolutions mentioned above, partially offset by legal costs incurred in connection with various dispute resolution matters that existed prior to the Settlement Agreement. Loss for the three months ended July 1, 2023 resulted primarily from net legal costs incurred in connection with various dispute resolution matters that existed prior to the Settlement Agreement.

(2)Loss for the three and six months ended June 29, 2024 and July 1, 2023 resulted primarily from revisions to liabilities, including income tax liabilities, retained in connection with prior dispositions.

(4) REVENUES FROM CONTRACTS

Disaggregated Revenues

We disaggregate revenue from contracts with customers by major product line and based on the timing of recognition for each of our reportable segments, as we believe such disaggregation best depicts how the nature, amount, timing, and uncertainty of our revenues and cash flows are affected by economic factors, with such disaggregation presented below for the three and six months ended June 29, 2024 and July 1, 2023:


	Three months ended June 29, 2024
Reportable Segments	HVAC		Detection and Measurement		Total

Major product lines
Package and process cooling equipment and services, and engineered air movement solutions	$	244.6	$	—	$	244.6
Boilers, electrical heating, and ventilation	111.9		—		111.9
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		66.1		66.1
Communication technologies, aids to navigation, and transportation systems	—		78.7		78.7

	$	356.5	$	144.8	$	501.3

Timing of Revenue Recognition
Revenues recognized at a point in time	$	315.0	$	120.7	$	435.7
Revenues recognized over time	41.5		24.1		65.6
	$	356.5	$	144.8	$	501.3


	Six months ended June 29, 2024
Reportable Segments	HVAC		Detection and Measurement		Total

Major product lines
Package and process cooling equipment and services, and engineered air movement solutions	$	432.4	$	—	$	432.4
Boilers, electrical heating, and ventilation	226.5		—		226.5
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		127.1		127.1
Communication technologies, aids to navigation, and transportation systems	—		180.5		180.5

	$	658.9	$	307.6	$	966.5

Timing of Revenue Recognition
Revenues recognized at a point in time	$	597.4	$	258.7	$	856.1
Revenues recognized over time	61.5		48.9		110.4
	$	658.9	$	307.6	$	966.5


	Three months ended July 1, 2023
Reportable Segments	HVAC		Detection and Measurement		Total

Major product lines
Package and process cooling equipment and services, and engineered air movement solutions	$	173.3	$	—	$	173.3
Boilers, electrical heating, and ventilation	95.7		—		95.7
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		67.2		67.2
Communication technologies, aids to navigation, and transportation systems	—		87.1		87.1
	$	269.0	$	154.3	$	423.3

Timing of Revenue Recognition
Revenues recognized at a point in time	$	248.0	$	127.3	$	375.3
Revenues recognized over time	21.0		27.0		48.0
	$	269.0	$	154.3	$	423.3


	Six months ended July 1, 2023
Reportable Segments	HVAC		Detection and Measurement		Total

Major product lines
Package and process cooling equipment and services, and engineered air movement solutions	$	331.6	$	—	$	331.6
Boilers, electrical heating, and ventilation	189.0		—		189.0
Underground locators, inspection and rehabilitation equipment, and robotic systems	—		133.1		133.1
Communication technologies, aids to navigation, and transportation systems	—		169.4		169.4
	$	520.6	$	302.5	$	823.1

Timing of Revenue Recognition
Revenues recognized at a point in time	$	476.3	$	255.5	$	731.8
Revenues recognized over time	44.3		47.0		91.3
	$	520.6	$	302.5	$	823.1

Contract Balances

Our customers are invoiced for products and services at the time of delivery or based on contractual milestones, resulting in outstanding receivables with payment terms from these customers (“Contract Accounts Receivable”). In some cases, the timing of revenue recognition, particularly for revenue recognized over time, differs from when such amounts are invoiced to customers, resulting in a contract asset (revenue recognition precedes the invoicing of the related revenue amount) or a contract liability (payment from the customer precedes recognition of the related revenue amount). Contract assets and liabilities are generally classified as current. On a contract-by-contract basis, the contract assets and contract liabilities are reported net within our condensed consolidated balance sheets. Our contract balances consisted of the following as of June 29, 2024 and December 31, 2023:


Contract Balances	June 29, 2024		December 31, 2023		Change
Contract Accounts Receivable(1)	$	319.3	$	275.4	$	43.9
Contract Assets	32.0		16.6		15.4
Contract Liabilities - current	(61.7)		(73.5)		11.8
Contract Liabilities - non-current(2)	(3.7)		(4.0)		0.3
Net contract balance	$	285.9	$	214.5	$	71.4

___________________________

(1)Included in “Accounts receivable, net” within the accompanying condensed consolidated balance sheets.

(2)Included in “Other long-term liabilities” within the accompanying condensed consolidated balance sheets.

The timing of revenue recognition, invoicing and cash collections results in contract accounts receivable, contract assets, and customer advances and deposits (contract liabilities) on our condensed consolidated balance sheets. In general, we receive payments from customers based on a billing schedule established in our contracts. During the three and six months ended June 29, 2024, changes in contract balances were not materially impacted by any other factors besides the acquisition of Ingénia. At June 29, 2024, contract account receivables and current contract liabilities attributable to Ingénia were $20.0 and $0.5, respectively.

During the three and six months ended June 29, 2024, we recognized revenues of $14.2 and $40.7, respectively, related to our contract liabilities at December 31, 2023.

Performance Obligations

As of June 29, 2024, the aggregate amount allocated to remaining performance obligations was $137.1. We expect to recognize revenue on approximately 76% and 84% of these remaining performance obligations over the next 12 and 24 months, respectively, with the remaining recognized thereafter.

(5) LEASES

There have been no material changes to our finance leases during the three and six months ended June 29, 2024.

During the six months ended June 29, 2024, we obtained operating lease right-of-use assets in exchange for new lease obligations of $15.8, recorded as a non-cash activity within the condensed consolidated statement of cash flows.

Supplemental balance sheet information related to operating leases is as follows:


	June 29, 2024		December 31, 2023
Operating Leases:					Affected Line Item in the Condensed Consolidated Balance Sheets
Operating lease ROU assets	$	52.2	$	42.4	Other assets

Operating lease current liabilities	$	10.2	$	11.3	Accrued expenses
Operating lease non-current liabilities	39.4		28.5		Other long-term liabilities
Total operating lease liability	$	49.6	$	39.8

The weighted average remaining lease term (years) of our operating leases as of June 29, 2024 and December 31, 2023, were as follows:


	June 29, 2024	December 31, 2023
Operating Leases	5.9	5.5

The discount rate utilized to determine the present value of lease payments over the lease term is our incremental borrowing rate based on the information available at lease commencement date. In developing the incremental borrowing rate, we considered the interest rate that reflects a term similar to the underlying lease term on a fully collateralized basis. We concluded to apply the incremental borrowing rate at a consolidated portfolio level using a five-year term, as the results did not materially differ upon further stratification. The weighted-average discount rate for our operating leases was 3.8% and 3.2% at June 29, 2024 and December 31, 2023, respectively.

The future minimum payments under our operating leases were as follows as of June 29, 2024:


	Operating Leases

Remainder of 2024	$	6.7
2025	10.5
2026	9.1
2027	8.5
2028	7.7
Thereafter	13.0
Total lease payments	55.5
Less imputed interest	5.9
Total	$	49.6

(6) INFORMATION ON REPORTABLE SEGMENTS

We are a global supplier of highly specialized, engineered solutions with operations in 15 countries and sales in over 100 countries around the world.

We have aggregated our operating segments into the following two reportable segments: HVAC and Detection and Measurement. The factors considered in determining our aggregated segments are the economic similarity of the businesses, the nature of products sold or services provided, production processes, types of customers, distribution methods, and regulatory environment. In determining our reportable segments, we apply the threshold criteria of the Segment Reporting Topic of the Codification. Segment Income is determined before considering, if applicable, impairment and special charges, long-term incentive compensation, certain other operating income/expense, other indirect corporate expenses, intangible asset amortization expense, inventory step-up charges, and certain other acquisition and integration-related costs. This is consistent with the way our Chief Operating Decision Maker (“CODM”) evaluates the results of each segment.

HVAC Reportable Segment

Our HVAC reportable segment engineers, designs, manufactures, installs and services package and process cooling products and engineered air movement solutions for the HVAC industrial, commercial, data center, and power generation markets, as well as boilers and electrical heating and ventilation products for the residential and commercial markets. The primary distribution channels for the segment’s products are direct to customers, independent manufacturing representatives, third-party distributors, and retailers. The segment serves a global customer base in North America, Europe, and Asia.

Detection and Measurement Reportable Segment

Our Detection and Measurement reportable segment engineers, designs, manufactures, services, and installs underground pipe and cable locators, inspection and rehabilitation equipment, robotic systems, transportation systems, communication technologies, and aids to navigation. The primary distribution channels for the segment’s products are direct to customers and third-party distributors. The segment serves a global customer base in North America, Europe, Africa, and Asia.

Corporate Expense

Corporate expense generally relates to the operating cost of our Charlotte, North Carolina corporate headquarters.

Financial data for our reportable segments for the three and six months ended June 29, 2024 and July 1, 2023 are presented below:


	Three months ended				Six months ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues:
HVAC reportable segment	$	356.5	$	269.0	$	658.9	$	520.6
Detection and Measurement reportable segment	144.8		154.3		307.6		302.5
Consolidated revenues	$	501.3	$	423.3	$	966.5	$	823.1

Income:
HVAC reportable segment	$	83.7	$	55.2	$	152.1	$	102.9
Detection and Measurement reportable segment	33.9		29.2		65.3		55.9
Total income for segments	117.6		84.4		217.4		158.8

Corporate expense	12.0		16.6		25.9		31.2
Acquisition-related and other costs (1)	2.3		1.5		4.9		2.1
Long-term incentive compensation expense	3.7		3.5		7.0		6.6
Amortization of acquired intangible assets	16.8		11.5		31.6		17.8
Special charges, net	(0.2)		—		0.4		—
Other operating expense, net (2)	8.4		—		8.4		—
Consolidated operating income	$	74.6	$	51.3	$	139.2	$	101.1

________________________________

(1)Represents certain integration costs incurred of $2.3 and $4.9 during the three and six months ended June 29, 2024, respectively, and $1.5 and $2.1 during the three and six months ended July 1, 2023, respectively, including additional “Cost of products sold” related to the step-up of inventory (to fair value) acquired in connection with the Ingénia acquisition of $0.9 and $1.8 during the three and six months ended June 29, 2024, respectively, and the ASPEQ acquisition of $1.1 during the three and six months ended July 1, 2023.

(2)Represents a charge of $8.4 related to a settlement with the seller of ULC Robotics (“ULC”) regarding additional contingent consideration.

(7) SPECIAL CHARGES, NET

Special charges, net, for the three and six months ended June 29, 2024 and July 1, 2023 are described in more detail below:


	Three months ended				Six months ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
HVAC reportable segment	$	(0.1)	$	—	$	0.2	$	—
Detection and Measurement reportable segment	(0.1)		—		0.2		—

Total	$	(0.2)	$	—	$	0.4	$	—

HVAC — Special charges, net for the three and six months ended June 29, 2024 related primarily to recording, and subsequent adjustments of, severance costs associated with a restructuring action at one of the segment's cooling businesses.

Detection and Measurement — Special charges, net for the three and six months ended June 29, 2024 related primarily to recording, and subsequent adjustments of, severance costs associated with restructuring actions at the segment's inspection and rehabilitation and aids to navigation businesses.

No significant future charges are expected to be incurred under actions approved as of June 29, 2024.

The following is an analysis of our restructuring liabilities for the six months ended June 29, 2024 and July 1, 2023:


	Six months ended
	June 29, 2024		July 1, 2023
Balance at beginning of year	$	0.7	$	—
Special charges	0.4		—
Utilization — cash	(0.8)		—

Balance at end of period	$	0.3	$	—

(8) INVENTORIES, NET

Inventories are accounted for under the first-in, first-out method and are comprised of the following at June 29, 2024 and December 31, 2023:


	June 29, 2024		December 31, 2023
Finished goods	$	73.8	$	79.4
Work in process	35.7		31.4
Raw materials and purchased parts	183.2		165.9
Total inventories	$	292.7	$	276.7

Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values.

(9) GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 29, 2024 were as follows:


	December 31, 2023		Goodwill Resulting from Business Combinations (1)		Foreign Currency Translation		June 29, 2024
HVAC reportable segment
Gross goodwill	$	777.8	$	147.2	$	(7.6)	$	917.4
Accumulated impairments	(331.9)		—		3.2		(328.7)
Goodwill	445.9		147.2		(4.4)		588.7

Detection and Measurement reportable segment
Gross goodwill	432.6		—		(3.2)		429.4
Accumulated impairments	(173.7)		—		0.6		(173.1)
Goodwill	258.9		—		(2.6)		256.3

Total
Gross goodwill	1,210.4		147.2		(10.8)		1,346.8
Accumulated impairments	(505.6)		—		3.8		(501.8)
Goodwill	$	704.8	$	147.2	$	(7.0)	$	845.0

__________________________

(1)Reflects (i) goodwill acquired with the Ingénia acquisition of $141.6 and (ii) an increase in ASPEQ and TAMCO goodwill of $3.9 and $1.7, respectively, resulting from revisions to the valuation of certain assets and liabilities. As indicated in Notes 1 and 3, the acquired assets, including goodwill, and liabilities assumed in the Ingénia acquisition have been recorded at estimates of fair value and are subject to change upon completion of acquisition accounting.

Other Intangibles, Net

Identifiable intangible assets at June 29, 2024 and December 31, 2023 comprised the following:


	June 29, 2024						December 31, 2023
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Intangible assets with determinable lives: (1)
Customer relationships	$	424.4	$	(86.1)	$	338.3	$	403.2	$	(68.8)	$	334.4
Technology	184.7		(34.6)		150.1		139.5		(27.8)		111.7
Patents	4.5		(4.5)		—		4.5		(4.5)		—
Other	72.6		(38.7)		33.9