SPX FLOW Reports Second Quarter 2019 Financial Results
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.
-- Backlog decreased (18.1)% organically due largely to a lower level of
system orders in the Food and Beverage segment, consistent with the
company's strategy to methodically reduce its exposure in large, dry
dairy applications and focus on growing orders in higher value, liquid
processing applications.
-- Orders declined (13.9)% organically, broadly reflecting a lower level of
customer capital expenditures and a slowdown in short cycle orders,
particularly in North America and Asia Pacific. The majority of the
decline was concentrated in Food and Beverage process systems and, to a
lesser extent, Food and Beverage components and hydraulic tools in the
Industrial segment.
-- Revenues declined (2.7)% organically, with organic revenue declines of
(3.1)% in the Industrial segment and (2.3)% in the Food and Beverage
segment.
-- Operating income was $29.7 million, or 7.7% of revenues, a decrease of
$(2.6) million, or (20) points. The decline in profitability was
concentrated in the Food and Beverage segment where profitability
declined due to a lower level of high margin component sales and lower
margin profile on system revenue as compared to the prior year,
specifically related to dry dairy projects. These declines were
partially offset by improved profitability in the Industrial segment.
-- Other income (expense) was $1.7 million as compared to $(0.3) million in
the prior year period primarily due to a mark-to-market gain on an
equity security.
-- Diluted earnings per share from continuing operations were $0.27 and
included:
-- Strategic restructuring charges of $(0.04) per share primarily
related to actions taken to close a facility in South America.
-- A benefit of $0.03 per share related to a mark-to-market adjustment
of an equity investment.
-- Income tax provision of $11.5 million, or an effective tax rate of
50%, reflecting losses recorded in countries where we do not
recognize a tax benefit.
-- On an adjusted basis, earnings per share* were $0.39.
-- Free cash flow* generation from continuing and discontinued
operations was $14.0 million and included investments of $8.4
million on capital expenditures and $2.9 million on restructuring
actions in the Food and Beverage and Industrial segments
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.
-- Backlog decreased (27.9)% organically due largely to the execution of
projects in backlog combined with a lower level of system orders,
consistent with the company's strategy to methodically reduce its
exposure in large, dry dairy applications and focus on growing orders in
higher value, liquid processing applications. To a lesser extent, the
backlog for components also declined.
-- Orders declined (20.6)% organically, broadly reflecting customer delays
on capital investments for process systems, particularly in Asia Pacific
and a slowdown in short cycle component orders in North America due in
large part to food and beverage producers' uncertainty regarding the
impact of tariffs.
-- Revenues declined (2.3)% organically, due to a decline in component
sales in North America and a lower level of revenue contribution from
large dry dairy systems, consistent with the company's strategy.
Aftermarket sales were up modestly.
-- Segment income declined $(6.0) million and margins contracted (290)
points. The decline in profitability reflects a lower margin mix of
system revenue and organic volume declines in high value component
sales.
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.
-- Backlog decreased (4.4)% organically reflecting a lower level of
small-to-medium sized capital orders over the past year and softness in
short cycle industrial demand through the first half of 2019.
-- Orders declined (8.0)% organically with broad-based declines across the
majority of the industrial product lines, most notably in hydraulic
tools and heat exchangers. These declines were partially offset by
high-single digit growth in mixer orders.
-- Revenues declined (3.1)% organically due to a lower level of capital
projects and a decline in shipments of dehydration equipment. These
declines were partially offset by organic growth in heat exchangers and
mixers.
-- Segment income increased $2.2 million and margins expanded 180 points on
a more favorable revenue mix, net benefits from cost/price and improved
operational execution.
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
ended ended
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)
expense
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)
expense
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
segments
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)
service costs
Restructuring and other related 1.9 1.9 6.9 2.7 4.2
charges
Consolidated Operating $29.7 $32.3 $(2.6) (8.0)% $57.7 $52.0 $5.7 11.0 %
Income
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
from operating activities:
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
discontinued operations:
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)
foreign currency exchange rates
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
period
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
CASH, DEBT AND NET DEBT RECONCILIATION
(Unaudited; in millions)
---
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)
exchange rates
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
operations
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
discontinued operations
===
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
===
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SOURCE SPX FLOW, Inc.
