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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 July 3, 2021
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 1-37393
SPX FLOW, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware47-3110748
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
13320 Ballantyne Corporate Place28277
Charlotte, NC
(Zip Code)
(Address of Principal Executive Offices)
Registrant’s Telephone Number, Including Area Code (704752-4400
(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01FLOWNew 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 FilerAccelerated Filer
Non-Accelerated FilerSmaller 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 as of August 2, 2021 were 41,629,822.




SPX FLOW, INC. AND SUBSIDIARIES
FORM 10-Q INDEX




PART I—FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements

SPX FLOW, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
Three months endedSix months ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
Revenues$381.6 $308.1 $745.4 $597.6 
Cost of products sold249.9 194.6 485.2 383.0 
Gross profit131.7 113.5 260.2 214.6 
Selling, general and administrative93.8 90.8 184.2 176.0 
Intangible amortization4.7 2.9 7.7 5.7 
Asset impairment charges 0.8  2.7 
Restructuring and other related charges4.3 4.8 13.5 7.4 
Operating income28.9 14.2 54.8 22.8 
Other income, net2.3 5.8 8.6 4.3 
Interest expense, net(4.9)(9.4)(9.8)(17.5)
Income from continuing operations before income taxes26.3 10.6 53.6 9.6 
Income tax provision(14.7)(3.9)(23.0)(3.0)
Income from continuing operations11.6 6.7 30.6 6.6 
Loss from discontinued operations, net of tax(0.6)(31.6)(0.9)(36.7)
Net income (loss)11.0 (24.9)29.7 (30.1)
Less: Net income attributable to noncontrolling interests0.2 0.2 0.3 0.3 
Net income (loss) attributable to SPX FLOW, Inc.$10.8 $(25.1)$29.4 $(30.4)
Amounts attributable to SPX FLOW, Inc. common shareholders:
Income from continuing operations, net of tax$11.4 $6.5 $30.3 $6.2 
Loss from discontinued operations, net of tax(0.6)(31.6)(0.9)(36.6)
Net income (loss) attributable to SPX FLOW, Inc.$10.8 $(25.1)$29.4 $(30.4)
Basic income (loss) per share of common stock:
Income per share from continuing operations$0.27 $0.15 $0.72 $0.15 
Loss per share from discontinued operations(0.01)(0.75)(0.02)(0.86)
Net income (loss) per share attributable to SPX FLOW, Inc.0.26 (0.59)0.70 (0.71)
Diluted income (loss) per share of common stock:
Income per share from continuing operations$0.27 $0.15 $0.72 $0.15 
Loss per share from discontinued operations(0.01)(0.74)(0.02)(0.86)
Net income (loss) per share attributable to SPX FLOW, Inc.0.26 (0.59)0.70 (0.71)
Weighted average number of common shares outstanding - basic41.822 42.397 41.910 42.524 
Weighted average number of common shares outstanding - diluted41.840 42.505 41.954 42.703 
The accompanying notes are an integral part of these statements.
1


SPX FLOW, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited; in millions)
Three months endedSix months ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
Net income (loss)$11.0 $(24.9)$29.7 $(30.1)
Other comprehensive income (loss), net:
Net unrealized gains on qualifying cash flow hedges, net of tax provision of $0.1 in the three months ended June 27, 2020
 0.3  0.2 
Foreign currency translation adjustments13.9 30.2 (25.5)(34.6)
Other comprehensive income (loss), net13.9 30.5 (25.5)(34.4)
Total comprehensive income (loss)24.9 5.6 4.2 (64.5)
Less: Total comprehensive income (loss) attributable to noncontrolling interests0.1 0.4 0.3 (0.1)
Total comprehensive income (loss) attributable to SPX FLOW, Inc.$24.8 $5.2 $3.9 $(64.4)
The accompanying notes are an integral part of these statements.

2


SPX FLOW, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except share data)
July 3, 2021December 31, 2020
ASSETS
Current assets:
Cash and equivalents$324.1 $441.5 
Accounts receivable, net251.0 232.6 
Contract assets23.3 24.4 
Inventories, net238.6 199.3 
Other current assets39.7 27.4 
Total current assets876.7 925.2 
Property, plant and equipment:
Land22.3 22.8 
Buildings and leasehold improvements171.2 176.8 
Machinery and equipment353.4 349.1 
546.9 548.7 
Accumulated depreciation(312.8)(320.6)
Property, plant and equipment, net234.1 228.1 
Goodwill616.4 569.7 
Intangibles, net228.2 206.0 
Other assets176.5 169.5 
TOTAL ASSETS$2,131.9 $2,098.5 
LIABILITIES, MEZZANINE EQUITY AND EQUITY
Current liabilities:
Accounts payable$178.1 $149.1 
Contract liabilities123.8 119.5 
Accrued expenses185.7 178.7 
Income taxes payable27.6 23.0 
Short-term debt15.5 12.5 
Current maturities of long-term debt0.1 0.1 
Total current liabilities530.8 482.9 
Long-term debt397.6 397.3 
Deferred and other income taxes43.0 36.6 
Other long-term liabilities117.7 117.5 
Total long-term liabilities558.3 551.4 
Commitments and contingent liabilities (Note 13)
Mezzanine equity3.4 3.4 
Equity:
SPX FLOW, Inc. shareholders’ equity:
Preferred stock, no par value, 3,000,000 shares authorized, and no shares issued and outstanding
  
Common stock, par value $0.01 per share, 300,000,000 shares authorized, 43,921,450 issued and 42,055,959 outstanding at July 3, 2021, and 43,394,547 issued and 42,157,504 outstanding at December 31, 2020
0.4 0.4 
Paid-in capital1,720.2 1,696.9 
Accumulated deficit(341.5)(363.3)
Accumulated other comprehensive loss(251.9)(226.4)
Common stock in treasury (1,865,491 shares at July 3, 2021, and 1,237,043 shares at December 31, 2020)
(86.9)(46.2)
Total SPX FLOW, Inc. shareholders' equity1,040.3 1,061.4 
Noncontrolling interests(0.9)(0.6)
Total equity1,039.4 1,060.8 
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY$2,131.9 $2,098.5 
The accompanying notes are an integral part of these statements.
3


SPX FLOW, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions)
Three Months Ended July 3, 2021
Common StockPaid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossCommon Stock in TreasuryTotal SPX FLOW, Inc. Shareholders' EquityNoncontrolling InterestsTotal Equity
Shares OutstandingPar
Balance at April 3, 202142.3 $0.4 $1,710.1 $(348.5)$(265.9)$(62.5)$1,033.6 $(0.4)$1,033.2 
Net income— — — 10.8 — — 10.8 0.2 11.0 
Other comprehensive income (loss), net— — — — 14.0 — 14.0 (0.1)13.9 
Stock-based compensation expense— — 3.0 — — — 3.0 — 3.0 
Exercise of stock options0.1 7.2 — — — 7.2 — 7.2 
Restricted stock and restricted stock unit vesting, net of tax withholdings— — (0.1)— — 0.2 0.1 — 0.1 
Common stock repurchases(0.3)— — — — (24.6)(24.6)— (24.6)
Dividends declared ($0.09 per share)
— — — (3.8)— — (3.8)— (3.8)
Purchase of noncontrolling interest(0.6)(0.6)
Balance at July 3, 2021
42.1 $0.4 $1,720.2 $(341.5)$(251.9)$(86.9)$1,040.3 $(0.9)$1,039.4 

Three months ended June 27, 2020
Common StockPaid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossCommon Stock in TreasuryTotal SPX FLOW, Inc. Shareholders' EquityNoncontrolling InterestsTotal Equity
Shares OutstandingPar
Balance at March 28, 202042.6 $0.4 $1,681.0 $(374.5)$(490.8)$(25.7)$790.4 $8.8 $799.2 
Net income (loss)— — — (25.1)— — (25.1)0.2 (24.9)
Other comprehensive income, net— — — — 30.3 — 30.3 0.2 30.5 
Stock-based compensation expense— — 3.8 — — — 3.8 — 3.8 
Restricted stock and restricted stock unit vesting, net of tax withholdings0.1 — 0.1 — — (0.5)(0.4)— (0.4)
Common stock repurchases(0.2)— — — — (6.2)(6.2)— (6.2)
Adjustment from mezzanine equity— — 1.7 — — — 1.7 — 1.7 
Disposition of discontinued operations— — — — 178.2 — 178.2 (1.2)177.0 
Balance at June 27, 202042.5 $0.4 $1,686.6 $(399.6)$(282.3)$(32.4)$972.7 $8.0 $980.7 

4


SPX FLOW, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)
(Unaudited; in millions)
Six months ended July 3, 2021
Common StockPaid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossCommon Stock in TreasuryTotal SPX FLOW, Inc. Shareholders' EquityNoncontrolling InterestsTotal Equity
Shares OutstandingPar
Balance at December 31, 202042.2 $0.4 $1,696.9 $(363.3)$(226.4)$(46.2)$1,061.4 $(0.6)$1,060.8 
Net income— — — 29.4 — — 29.4 0.3 29.7 
Other comprehensive loss, net— — — — (25.5)— (25.5) (25.5)
Stock-based compensation expense— — 5.8 — — — 5.8 — 5.8 
Exercise of stock options0.3 — 17.6 — — — 17.6 — 17.6 
Restricted stock and restricted stock unit vesting, net of tax withholdings0.1 — (0.1)— — (6.2)(6.3)— (6.3)
Common stock repurchases(0.5)— — — — (34.5)(34.5)— (34.5)
Dividends declared ($0.18 per share)
— — — (7.6)— — (7.6)— (7.6)
Purchase of noncontrolling interest— — — — — — — (0.6)(0.6)
Balance at July 3, 2021
42.1 $0.4 $1,720.2 $(341.5)$(251.9)$(86.9)$1,040.3 $(0.9)$1,039.4 

Six months ended June 27, 2020
Common StockPaid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossCommon Stock in TreasuryTotal SPX FLOW, Inc. Shareholders' EquityNoncontrolling InterestsTotal Equity
Shares OutstandingPar
Balance at December 31, 201942.6 $0.4 $1,677.0 $(369.2)$(426.5)$(19.3)$862.4 $10.7 $873.1 
Net income (loss)— — — (30.4)— — (30.4)0.3 (30.1)
Other comprehensive loss, net— — — — (34.0)— (34.0)(0.4)(34.4)
Stock-based compensation expense— — 7.8 — — — 7.8 — 7.8 
Restricted stock and restricted stock unit vesting, net of tax withholdings0.1 — 0.1 — — (6.9)(6.8)— (6.8)
Common stock repurchases(0.2)— — — — (6.2)(6.2)— (6.2)
Dividends attributable to noncontrolling interests— — — — — — — (1.4)(1.4)
Adjustment from mezzanine equity— — 1.7 — — — 1.7 — 1.7 
Disposition of discontinued operations— — — — 178.2 — 178.2 (1.2)177.0 
Balance at June 27, 202042.5 $0.4 $1,686.6 $(399.6)$(282.3)$(32.4)$972.7 $8.0 $980.7 
The accompanying notes are an integral part of these statements.
5

SPX FLOW, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Six months ended
July 3, 2021June 27, 2020
Cash flows from (used in) operating activities:
Net income (loss)$29.7 $(30.1)
Less: Loss from discontinued operations, net of tax(0.9)(36.7)
Income from continuing operations30.6 6.6 
Adjustments to reconcile income from continuing operations to net cash from (used in) operating activities:
Restructuring and other related charges13.5 7.4 
Asset impairment charges 2.7 
Deferred income taxes7.7 18.8 
Depreciation and amortization22.0 20.0 
Stock-based compensation5.8 7.0 
Pension and other employee benefits0.6 0.7 
Losses (gains) on asset sales and other, net(0.3)0.4 
Gains on changes in fair value of investment in equity security(7.5)(5.3)
Changes in operating assets and liabilities, net of effects from business acquisitions and discontinued operations:
Accounts receivable and other assets(19.5)28.3 
Contract assets and liabilities, net1.9 3.3 
Inventories(27.7)(29.1)
Accounts payable, accrued expenses and other14.7 (63.6)
Cash spending on restructuring actions(7.9)(4.7)
Net cash from (used in) continuing operations33.9 (7.5)
Net cash used in discontinued operations(0.7)(6.4)
Net cash from (used in) operating activities33.2 (13.9)
Cash flows from (used in) investing activities:
Proceeds from asset sales and other, net0.6 0.2 
Capital expenditures(14.4)(11.8)
Business acquisitions, net of cash acquired of $4.5, in the six months ended July 3, 2021
(102.6) 
Net cash used in continuing operations(116.4)(11.6)
Net cash from discontinued operations (includes proceeds from disposition of $406.2, less cash and restricted cash disposed of $7.3, in the six months ended June 27, 2020)
 393.4 
Net cash from (used in) investing activities(116.4)381.8 
Cash flows used in financing activities:
Borrowings under (repayments of) purchase card program, net2.8 (4.8)
Repayments of other financing arrangements(1.2)(0.3)
Purchases of common stock(34.5)(6.2)
Minimum withholdings paid on behalf of employees for net share settlements, net(6.3)(6.8)
Proceeds from the exercise of employee stock options17.6  
Dividends paid (includes noncontrolling interests distribution of $1.2 in the six months ended June 27, 2020)
(3.8)(1.2)
Purchase of noncontrolling interest(0.6) 
Net cash used in continuing operations(26.0)(19.3)
Net cash used in discontinued operations (0.3)
Net cash used in financing activities(26.0)(19.6)
Change in cash, cash equivalents and restricted cash due to changes in foreign currency exchange rates(8.2)5.4 
Net change in cash, cash equivalents and restricted cash(117.4)353.7 
Consolidated cash, cash equivalents and restricted cash, beginning of period441.6 303.4 
Consolidated cash, cash equivalents and restricted cash, end of period$324.2 $657.1 
6


SPX FLOW, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited; in millions)
July 3, 2021June 27, 2020
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents$324.1 $657.1 
Restricted cash included in other current assets0.1  
Consolidated cash, cash equivalents and restricted cash$324.2 $657.1 
The accompanying notes are an integral part of these statements.

7


SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited; in millions, except per share data)

(1)    BASIS OF PRESENTATION
SPX FLOW, Inc. and its consolidated subsidiaries (“SPX FLOW,” ‘‘the Company,’’ “we,” “us,” or “our”) operate in two reportable segments: the Nutrition and Health segment and the Precision Solutions segment. During the first quarter of 2021, the Company renamed its former "Food and Beverage" segment to the "Nutrition and Health" segment. During July 2021, the Company renamed its former "Industrial" segment to the "Precision Solutions" segment. Accordingly, all current and comparative period financial information for these segments has been presented as the Nutrition and Health segment and the Precision Solutions segment in this Quarterly Report on Form 10-Q. Other than the changes in name, there were no changes to the segments and there has been no change to prior period financial information of the segments. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only and are denoted in millions of U.S. dollars. See Note 3 for information on discontinued operations and Note 4 for information on our reportable segments.
We prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “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 fair presentation.
We experienced the adverse impacts of the novel coronavirus pandemic (“COVID-19” or the “COVID-19 pandemic”) beginning in the first quarter of 2020 and these adverse impacts are expected to continue, to a lesser degree, in future quarters of 2021, and possibly longer. Despite the adverse impacts, there are no indications that the COVID-19 pandemic has resulted in a material decline in the carrying value of any assets or a material change in the estimate of any contingent amounts recorded in our condensed consolidated balance sheet as of July 3, 2021. However, there is uncertainty as to the duration and overall impact of the COVID-19 pandemic, which could result in an adverse material change in a future period to the estimates we have made related to the valuation of assets and contingent amounts, which could result in the impairment of certain assets or the recognition of costs due to increases in contingent amounts.
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 2020 Annual Report on Form 10-K. Interim results are not necessarily indicative of full year results and the condensed consolidated financial statements may not be indicative of the Company’s future performance.
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 2021 are April 3, July 3, and October 2, compared to the respective March 28, June 27, and September 26, 2020 dates. We had five more days in the first quarter of 2021 and will have six fewer days in the fourth quarter of 2021 than in the respective 2020 periods.
(2)    NEW ACCOUNTING PRONOUNCEMENTS
The following is a summary of new accounting pronouncements that apply or may apply to our business.
In December 2019, the Financial Accounting Standards Board (the "FASB") issued an amendment to simplify the accounting for income taxes by, among other matters, eliminating certain existing exceptions related to the general approach in Accounting Standards Codification ("ASC") 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for the step-up in the tax basis of goodwill. The transition requirements are primarily prospective and the effective date is for interim and annual reporting periods beginning after December 15, 2020. The adoption of this amendment by the Company on January 1, 2021 did not have a significant impact on our condensed consolidated financial statements.
8


SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited; in millions, except per share data)
In March 2020, and as amended in January 2021, the FASB issued an amendment to provide optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting in connection with the future discontinuance of the London Interbank Offered Rate (“LIBOR”). The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by the reference rate reform, including providing optional expedients and exceptions if certain criteria are met. This guidance generally can be applied from March 12, 2020 through December 31, 2022. We are currently assessing the impacts of the practical expedients provided in this guidance, and which, if any, we will adopt.
(3)    BUSINESS ACQUISITIONS, DISPOSALS AND DISCONTINUED OPERATIONS
Business Acquisitions
On August 1, 2020, the Company completed the acquisition of POSI LOCK, Inc ("POSI LOCK"), a manufacturer of hydraulic and mechanical pullers used to remove certain parts from equipment in a variety of industries ranging from power transmission and light to heavy industrial applications. We purchased substantially all of the assets, including net working capital, long-term and intangible assets, and assumed certain liabilities of the business, for a cash payment of $10.0. The assets acquired and liabilities assumed in the POSI LOCK acquisition are recorded at their fair values based on expert valuations and management estimates and its results are reported in the Company's Precision Solutions segment. Goodwill and intangible assets are expected to be fully deductible for tax purposes. The pro forma effects of the acquisition of POSI LOCK were not material to our condensed consolidated results of operations for the three and six months ended June 27, 2020.
On January 18, 2021, the Company completed the acquisition of approximately 98% of the issued and outstanding shares of Plc Uutechnic Group Oyj ("UTG Mixing Group"), a public company listed on the Nasdaq Helsinki, for a cash payment of $38.0, net of cash acquired of $2.9. UTG Mixing Group is a producer of various mixing solutions for the chemical, food, metallurgical and fertilizer, environmental technology, water treatment and pharmaceuticals markets and its results are reported in the Company's Precision Solutions segment. The acquisition of UTG Mixing Group brings additional product, technology and technical expertise to the Company’s global portfolio of mixing products and process solutions, and will enable the Company to expand its sales network for existing mixer product lines and increase its European market presence with the addition of new mixer product brands. During the first quarter of 2021, the Company initiated a squeeze-out process prescribed by Finnish law pursuant to which the Company (a) acquired the remaining outstanding shares in UTG Mixing Group and (b) delisted the shares of UTG Mixing Group from the Nasdaq Helsinki. This process was finalized in the second quarter of 2021, with the remaining shares of UTG Mixing Group being delisted from the Nasdaq Helsinki effective June 1, 2021. Transaction costs related to the UTG Mixing Group acquisition were $1.2 and were recognized as a component of "Selling, General and Administrative" expense in the accompanying condensed consolidated statements of operations.
Purchase accounting related to this acquisition was substantially completed during the second quarter of 2021. The assets acquired and liabilities assumed in the UTG Mixing Group acquisition are recorded at their fair values based on expert valuations and management estimates. The excess of the purchase price over the aggregate fair values of the net assets recognized was recorded as "Goodwill" in the accompanying condensed consolidated balance sheet as of July 3, 2021. Goodwill and intangible assets are not deductible for non-U.S. tax purposes. The Company intends to make an election under Internal Revenue Code Section 338, which will treat the purchase as an asset acquisition for U.S. tax purposes. As a result, the goodwill and intangibles will be deductible for computing the U.S. tax on the earnings of non-U.S. subsidiaries.
On May 12, 2021, the Company completed the acquisition of Philadelphia Mixing Solutions, Ltd. ("Philadelphia Mixing"), a manufacturer of in-tank mixing solutions and provider of various technical services and field support, and its results are reported in the Company's Precision Solutions segment. The acquisition of Philadelphia Mixing brings additional opportunity for synergy and growth through broadening the Company's portfolio of comprehensive mixing solutions for customers in the chemical, water and wastewater, energy, and nutrition and health markets. Additionally, this acquisition will enable the Company to expand its sales network for existing mixer product lines and increase its overall market presence. We purchased substantially all of the assets, including net working capital, long-term and intangible assets, and assumed certain liabilities of the business, for a cash payment of $64.6, net of cash acquired of $1.6. The purchase price remains subject to adjustment based on a customary period of review between the Company and seller of the levels of net working capital, cash and debt, and deductions, which we expect to conclude in the third quarter of 2021. Transaction costs related to the Philadelphia Mixing acquisition were $2.1 and were recognized as a component of "Selling, General and Administrative" expense in the accompanying condensed consolidated statements of operations.
9


SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited; in millions, except per share data)
The assets acquired and liabilities assumed in the Philadelphia Mixing acquisition are recorded at their fair values based on preliminary expert valuations and management estimates, and are subject to change when these estimates are finalized. Goodwill and intangible assets related to the U.S. business are expected to be fully deductible for U.S. tax purposes. However, goodwill and intangible assets related to the non-U.S. businesses are not deductible for non-U.S. tax purposes. Additionally, the Company intends to make an election under Internal Revenue Code Section 338, which will treat the purchase of the non-U.S. subsidiaries as an asset acquisition for U.S. tax purposes. As a result, the goodwill and intangibles will be deductible for computing the U.S. tax on the earnings of non-U.S. subsidiaries.
A summary of the purchase price paid for UTG Mixing Group and Philadelphia Mixing follows:
UTG Mixing Group
As of January 18, 2021
Philadelphia Mixing
As of May 12, 2021
Assets acquired:
   Current assets, including cash and equivalents of $2.9 and $1.6, respectively
$9.7 $21.8 
   Property, plant and equipment2.5 5.4 
   Goodwill23.4 33.7 
   Intangibles14.3 16.0 
   Other assets1.6 2.9 
Total assets acquired51.5 79.8 
Liabilities assumed:
   Current liabilities assumed(5.4)(10.9)
   Long-term liabilities assumed(5.2)(2.7)
Total liabilities assumed(10.6)(13.6)
Net assets acquired$40.9 $66.2 
Pro Forma Financial Information
The following pro forma financial information presents the combined results of operations of the Company, UTG Mixing Group and Philadelphia Mixing for the three and six months ended July 3, 2021 and June 27, 2020 as if the acquisitions had been completed on January 1, 2020. The pro forma financial information is not necessarily indicative of what the financial results would have been had the acquisitions been completed on this date. In addition, the pro forma financial information is not indicative of, nor does it purport to project, the Company's future financial results. The pro forma financial information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisitions.
Three months endedSix months ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
Revenues$388.8 $323.9 $764.3 $625.0 
Income (loss) from continuing operations before income taxes20.4 8.6 45.3 (1.2)
Income (loss) from continuing operations, net of tax6.9 5.3 24.0 (2.0)
The pro forma information presented above reflects the following adjustments related to UTG Mixing Group and Philadelphia Mixing results, prior to their respective dates of acquisition:
Fair Value Adjustments - Pre-tax costs related to (i) intangible amortization expense and (ii) amortization of the increase to fair value of acquired inventories, collectively, of $2.2, $3.6, $4.9 and $7.2 are reflected in the pro forma information for the three months ended July 3, 2021 and June 27, 2020, and the six month periods then ended, respectively. Pre-tax effects related to fair value adjustments of the acquired businesses’ property, plant and equipment were not significant for the respective periods.
Acquisition-Related Costs - Pre-tax costs related to the acquisitions of $3.3 are reflected in the pro forma information for the six months ended June 27, 2020.
10


SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited; in millions, except per share data)
Accounting Policy Adjustments - The primary effect of changes to accounting policies of the acquired businesses, which have been applied since their respective dates of acquisition, relates to the Company’s application of its revenue recognition policies, including primarily the accounting for certain customer contracts over time which were previously accounted for by the acquired businesses at a point in time. The effects of the application of revenue recognition and other accounting policies of the Company to the acquired businesses were not significant for any of the periods presented above.
Income Tax Considerations - Prior to its acquisition by SPX FLOW, the U.S. legal entity of Philadelphia Mixing was a qualified subchapter S subsidiary and its income (loss) was passed through to the owners of its former parent company. Under SPX FLOW's legal entity structure, the U.S. operations of Philadelphia Mixing are required to be tax-effected. In consideration of this, as well as SPX FLOW's applicable effective tax rates in the non-U.S. jurisdictions where Philadelphia Mixing operates, a blended 20.0% effective tax rate has been applied to Philadelphia Mixing's pro forma results for all periods prior to its acquisition by the Company.
Business Disposals
In November 2020, we completed the sale of a business in our Asia Pacific region, which had been included in the Precision Solutions reportable segment, to a third-party buyer for total proceeds of $4.7, net of cash disposed, which resulted in a pre-tax loss of $4.2 during the fourth quarter of 2020. During the first quarter of 2021, we substantially completed negotiations with the buyer related to the closing-date net-working-capital adjustment, which did not significantly impact our estimate of the pre-tax loss previously recorded. We finalized the agreement and paid the related purchase price adjustment in the second quarter of 2021.
Discontinued Operations
We report businesses or asset groups as discontinued operations when, among other things, we commit to a plan to divest the business or asset group, we actively begin marketing the business or asset group, and when the sale of the business or asset group is deemed probable of occurrence within the next twelve months.
On May 2, 2019, the Company announced that its Board of Directors had initiated a process to divest a substantial portion of the Company’s former Power and Energy reportable segment, excluding the Bran+Luebbe product line (collectively, the “Disposal Group”). In connection with this announcement and the continued development of the divestiture process thereafter, and in accordance with the criteria described above, we reported the Disposal Group as “held-for-sale”, and as discontinued operations, initially as of the end of our second quarter of 2019.
In November 2019, we entered into a Purchase and Sale Agreement (the “Sale Agreement”) with an affiliate of Apollo Global Management, LLC (the “Buyer”), pursuant to which the Company agreed, indirectly through certain of its subsidiaries, to sell the businesses reflected as discontinued operations in the accompanying condensed consolidated financial statements to the Buyer for a gross purchase price of $475.0 (the “Transaction”). The gross purchase price of $475.0, which included the purchase price for a business based in India, was subject to (i) reductions based upon the level of certain deductions of the Disposal Group at the closing date, and (ii) certain adjustments based upon the level of net working capital, cash and debt of the Disposal Group at the closing date. The deductions included, for example, components of the "Contract Liabilities" and certain other current and long-term liabilities of the Disposal Group, as well as deductions for budgeted but un-incurred capital expenditures and other business infrastructure costs measured over periods defined in the Sale Agreement, but in all cases which expired at the closing date.
Fiscal 2020 Discontinued Operations Developments and Sale Closure
We recorded a pre-tax loss on Disposal Group of $8.5 during our first quarter of 2020 to reduce the carrying value of the Disposal Group to our estimate of the net proceeds expected to be realized upon finalization of the purchase price with the Buyer (which was subject to a customary period of review between the parties as discussed below), less estimated costs to sell. This loss was attributable primarily to a reduction in the U.S. dollar-denominated proceeds expected to be received from the Buyer, relative to the translated U.S. dollar-equivalent carrying values of certain non-U.S. businesses of the Disposal Group, located primarily in the U.K. and Europe, due to a strengthening of the U.S. dollar against the currencies of those businesses during the first quarter of 2020.
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited; in millions, except per share data)
On March 30, 2020, the Company completed the sale of substantially all Disposal Group businesses and received proceeds from the Buyer of $406.2, based on an estimate of certain adjustments to the gross purchase price as of the closing date as discussed further above and, to a lesser extent, certain fees. The consummation of the sale to the Buyer of a remaining business based in India remained subject to regulatory approvals at that time. As noted above, finalization of the purchase price with the Buyer remained subject to a customary period of review between the parties. We recorded a pre-tax loss on Disposal Group of $2.0 during our second quarter of 2020 related to estimated working capital adjustments and reflective of ongoing discussions with the Buyer at that time. The substantial portion of “Assets of Discontinued Operations” and “Liabilities of Discontinued Operations”, as well as cumulative foreign currency translation adjustment of $178.2 (previously included in the Company’s "Accumulated Other Comprehensive Loss" ("AOCL") balance) and “Noncontrolling Interests” of $1.2, which were removed from our consolidated balance sheet during the second quarter of 2020 in connection with completion of the sale, equaled the net proceeds received upon consummation of the Transaction.
During the third quarter of 2020, we finalized the levels of net working capital, cash and debt, and deductions as of the closing date with the Buyer, which resulted in an additional $1.2 pre-tax loss on Disposal Group being recorded in our third quarter of 2020. The determination of the final settlement with the Buyer involved resolution of certain estimates and judgments based on, among other items, the interpretation and application of key terms of the Sale Agreement. In addition, during our third quarter of 2020, we recorded a $0.4 pre-tax loss on Disposal Group to reduce the carrying value of the business based in India, the sale of which remained subject to regulatory approvals.
During the fourth quarter of 2020 and upon receiving relevant regulatory approvals, we completed the sale of the remaining net assets of the Disposal Group, based in India, to the Buyer for total proceeds of $6.3.
Other Sale Agreement Considerations
The Sale Agreement includes certain indemnification obligations which we believe are customary for transactions of this nature, including for certain tax obligations, to the extent such obligations relate to fiscal periods prior to the closing date and exceed amounts which were provided for in the balance sheet of the Disposal Group at closing.
Concurrent with the closing of the Transaction, the parties entered into certain ancillary agreements including, among others, a Transition Services Agreement (the “TSA”). Under the TSA, SPX FLOW provides the Buyer with certain specified services for varying periods in order to ensure an orderly transition of the business following the closing at agreed-upon prices or rates, which we believe approximate fair market value for such services. These services include, among others, certain information technology, finance and human resources services. Income from such services of $0.5 and $1.5 during the three and six months ended July 3, 2021, respectively, and of $1.5 during the three and six months ended June 27, 2020, was recognized as a component of "Other income, net".
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SPX FLOW, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited; in millions, except per share data)
Results and Significant Non-cash Operating Items and Capital Expenditures of Discontinued Operations:
    Losses from discontinued operations for the three and six months ended July 3, 2021 and June 27, 2020 were as follows:
Three months endedSix months ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
Revenues$ $0.7 $ $111.4 
Cost of products sold(1)