8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 16, 2022

SPX FLOW, INC.

(Exact Name of Registrant as specified in Charter)

 

Delaware	1-37393	47-3110748
(State or Other Jurisdiction of	(Commission File Number)	(I.R.S. Employer
Incorporation)		Identification No.)

13320 Ballantyne Corporate Place

Charlotte, North Carolina 28277

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code (704) 752-4400

NOT APPLICABLE

(Former Name or Former Address if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01	FLOW	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. o 

Item 2.02.  Results of Operations and Financial Condition.

On February 16, 2022, SPX FLOW, Inc. (the “Company”) issued the press release attached as Exhibit 99.1 hereto and incorporated herein by reference.

The press release incorporated by reference into this Item 2.02 contains disclosure regarding organic revenue growth (decline), defined as net revenue growth (decline), excluding the effects of (i) foreign currency fluctuations and (ii) business acquisitions which occurred in the third quarter of 2020 and first and second quarters of 2021. Such amounts, for purposes of this reconciliation, include revenues from continuing operations only. The Company’s management believes that this metric is a useful financial measure for investors in evaluating its operating performance because excluding the effects of currency fluctuations and business acquisitions, when read in conjunction with the Company’s revenues, presents a useful tool to evaluate the Company’s ongoing operations and provides investors with a tool they can use to evaluate the Company’s management of assets held from period to period. In addition, organic revenue growth (decline) is one of the factors the Company’s management uses in internal evaluations of the overall performance of its business.

The press release also contains disclosures regarding (i) free cash flow from operations, defined as net cash from operating activities reduced by cash paid for capital expenditures, and (ii) adjusted free cash flow from operations, defined as free cash flow from operations excluding cash spending on restructuring actions, cash spending on certain mergers and acquisitions ("M&A") activities, cash spending on strategic actions, and discrete cash tax payments. Such amounts, for purposes of these reconciliations, relate to continuing operations only. The Company’s management believes that these free cash flow and adjusted free cash flow metrics are useful financial measures for investors in evaluating the cash flow performance of multi-industrial companies, since the measures provide insight into the cash flow available to fund such things as equity repurchases, dividends, mandatory and discretionary debt reduction and acquisitions or other strategic investments. In addition, although the use of these cash flow metrics is limited by the fact that the measures can exclude certain cash items within management’s discretion, free cash flow and adjusted free cash flow from operations are factors used by the Company’s management in internal evaluations of the overall performance of its business.

In the three and twelve months ended December 31, 2021, respectively, we recognized the following within results of continuing operations (amounts in millions):

i.charges and fees of $12.6 and $15.9 associated with strategic actions including, in 2021, professional fees incurred in connection with a merger agreement entered into with an affiliate of Lone Star Funds ("Lone Star"), wherein upon closing, Lone Star will acquire all of the Company's outstanding common shares in exchange for a cash purchase price of $86.50 per share, and as described further in Note 1 to the consolidated financial statements included in our 2021 Annual Report on Form 10-K, as of and for the year ended December 31, 2021,

ii.charges of $0.2 and $5.8 associated with certain M&A activities including, among other M&A-related costs, certain costs related to business acquisitions consummated in January 2021 and May 2021,

iii.restructuring and other related charges (credits) of $(1.4) and $12.7, as described further in Note 8 to our consolidated financial statements referred to above,

iv.the gain on sale of the primary assets of a product line of $0.0 and $5.6, as described further in Note 4 to our consolidated financial statements referred to above,

v.transition services income of $0.2 and $1.9, recognized as a component of “Other income, net” in our consolidated financial statements, under an agreement entered into in connection with the sale of our former Power and Energy reportable segment and as described further in Note 4 to our consolidated financial statements referred to above,

vi.amortization of the inventory fair value step-up adjustments of $0.0 and $1.9 in the Company’s Precision Solutions segment related to business acquisitions which occurred in the first half of 2021, as described further in Note 4 to our consolidated financial statements referred to above,

vii.intangible amortization expense of $4.3 (consisting of $1.5 in our Nutrition and Health segment and $2.8 in our Precision Solutions segment), and $17.9 (consisting of $6.3 in our Nutrition and Health segment and $11.6 in our Precision Solutions segment),

viii.the fair value adjustments (gains) related to an equity security of $2.8 and $11.9, as described further in Note 17 to our consolidated financial statements referred to above,

ix.fourth quarter mark-to-market pension adjustments (credits in 2021) of $2.2 and $2.2, as described further in Note 11 to our consolidated financial statements referred to above,

x.certain gains on asset sales and other, net, of $0.0 and $2.2, recognized as a component of “Other income, net” in our consolidated financial statements, and which related primarily to the sale of certain machinery and equipment and real property previously owned by the Company,

xi.a loss on early extinguishment of debt of $0.0 and $12.4, as described further in Note 13 to our consolidated financial statements referred to above, and

xii.certain discrete income tax charges, representing the difference between the tax provision recognized in our consolidated financial statements referred to above for the periods and a tax provision calculated at a 28% effective tax rate.

To aid investors who seek comparability period-to-period, the Company, in the press release and related schedules incorporated by reference into this Item 2.02, adjusted certain metrics to exclude the above items, as well as the results of discontinued operations for certain of the adjusted metrics. These metrics include disclosure of:

1.adjusted segment income, which is defined as segment income from continuing operations only, and excludes (i) intangible amortization expense and (ii) amortization of inventory fair value step-up adjustments;

2.adjusted operating income, which is defined as operating income from continuing operations only, and excludes (i) charges and fees associated with strategic actions, (ii) charges associated with certain M&A activities, (iii) restructuring and other related charges (credits), (iv) asset impairment charges (applicable in 2020 only), (v) loss (gain) on sale of business and product line assets, (vi) a reduction of SG&A costs associated with transition services income, to net such income, recognized in “Other income, net”, against SG&A expense where the underlying costs of providing such services are reported, (vii) the amortization of the inventory fair value step-up adjustment related to business acquisitions which occurred in the first and second quarters of 2021, and (viii) intangible amortization, each as described above and each of which is presented on a continuing operations basis only, for purposes of this adjusted operating income reconciliation;

3.EBITDA, determined including only the results of continuing operations, which is defined as net income attributable to SPX FLOW, Inc. from continuing operations, and excludes the income tax provision, net interest expense, and depreciation and amortization, each of which includes only the results of continuing operations, for purposes of this EBITDA reconciliation;

4.adjusted EBITDA from continuing operations, which is defined as EBITDA, calculated including the results of continuing operations only, and excludes (i) charges and fees associated with strategic actions, (ii) charges associated with certain M&A activities, (iii) restructuring and other related charges (credits), (iv) asset impairment charges (applicable in 2020 only), (v) fair value adjustments related to an equity security, (vi) mark-to-market pension adjustments, (vii) the gain on sale of the primary assets of a product line, (viii) certain gains on asset sales and other, net, (ix) loss on early extinguishment of debt, and (x) the amortization of the inventory fair value step-up adjustments related to business acquisitions which occurred in the first and second quarters of 2021, with each of the items recognized during the three and twelve months ended December 31, 2021 as described above and each of which is presented on a continuing operations basis only, for purposes of this adjusted EBITDA reconciliation; and

5.adjusted diluted earnings per share (“EPS”) from continuing operations, which is defined as diluted EPS from continuing operations attributable to SPX FLOW, Inc., and excludes the dilutive EPS effects of each of the items excluded from adjusted EBITDA noted in item (4) above, on a net of tax basis, and also excludes the dilutive EPS effects of intangible amortization expense, and other discrete income tax charges, each as described above.

The Company views each of the above measures, when read in conjunction with its comparable GAAP number or amount, as giving investors a useful tool to assess the health and prospects of the Company. Additionally, the Company’s management uses each of these adjusted metrics as a measure of the Company’s performance.

None of the non-GAAP measures described above is a measure of financial performance under accounting principles generally accepted in the United States (“GAAP”), and such measures should not be considered a substitute for, and should be used in combination with, the GAAP number or amount from which each is reconciled. Non-GAAP measures used by the Company may not be comparable to similarly titled measures reported by other companies.

Refer to the tables included in the press release for the components of each of the Company’s non-GAAP numbers or amounts referred to above, and for the reconciliations of these numbers or amounts from their respective most comparable GAAP measures.

The information in this Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this

Report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.                                        Financial Statements and Exhibits.

Exhibit
Number	Description
99.1	Press Release dated February 16, 2022, furnished solely pursuant to Item 2.02 of Form 8-K.
104	Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		SPX FLOW, Inc.
Date: February 16, 2022	By:	/s/ Jaime M. Easley
		Jaime M. Easley
		Vice President, Chief Financial Officer and Chief Accounting Officer

EX-99.1

Exhibit 99.1

SPX FLOW REPORTS FOURTH QUARTER AND FULL YEAR 2021 FINANCIAL RESULTS

Fourth Quarter 2021 Highlights:

● Organic orders increased 3.1% YoY driven by gains in Precision Solutions

● Reported operating margin of 8.0%; Adjusted operating margin* of 12.0%, up 190 points year over year

● Margin improvement a result of strategic shift towards higher quality revenue

● Announced acquisition by Lone Star remains on track for first half 2022 closing

___________________________________________________________________________________

CHARLOTTE, NC - February 16, 2022 - SPX FLOW, Inc. (NYSE:FLOW), a leading provider of process solutions for the nutrition, health and industrial markets, today reported results for the fourth quarter and full year ended December 31, 2021.

Demand remained strong throughout the fourth quarter with orders up 3% organically leading to record year-end backlog of $610 million, up 7.5% organically year-over-year. As anticipated, revenue was down 4% organically in the quarter due to timing of Nutrition and Health systems, selectivity in Precision Solutions, and the impact of six fewer days in the fourth quarter of 2021 versus the fourth quarter of 2020. Adjusted EBITDA* margin was 13.8% for the quarter, up 210 basis points year-over-year, driven by improved gross margin as the company pursued higher quality revenue and enhanced price realization.

In the quarter, the company experienced challenges related to disruptions in supply chain and freight and lower availability of labor in certain facilities. The company estimates $14 million of revenue was delayed due to lack of availability of component parts for the company’s finished goods and inefficient freight logistics, which negatively impacted EBITDA by $7 million. In order to serve key customers, the company also incurred an additional $1 million of premium freight expense and $1 million of costs for COVID-related labor inefficiencies. In addition to these operational headwinds and the resulting incremental costs in the period, the company also incurred discrete expenses related primarily to adjustments to working capital accounts of $2 million and a $1 million LIFO charge as a result of rising raw materials costs. The aggregate impact of these items reduced Adjusted EBITDA* margin by approximately 260 basis points.

Fourth Quarter 2021 Consolidated Results (continuing operations unless otherwise noted)

$ millions	Q4 2021			Q4 2020			Variance		Organic Variance
Backlog	$	609.7		$	545.8		11.7	%	7.5	%
Orders	419.3			393.7			6.5	%	3.1	%
Revenues	394.0			396.1			(0.5)	%	(3.8)	%
Operating income	31.4			26.5			18.5	%
Margin %	8.0		%	6.7		%	130 bps
Adjusted operating income*	47.3			39.9			18.5	%
Margin %	12.0		%	10.1		%	190 bps
Segment income	52.2			48.1			8.5	%
Margin %	13.2		%	12.1		%	110 bps
Operating cash flow from continuing operations	27.7			88.7
Adjusted free cash flow from continuing operations*	25.9			88.8
Income from continuing operations, net of tax	12.3			20.1
Adjusted EBITDA from continuing operations*	54.5			46.4

Note: The commentary below is compared to the prior-year period. All comments refer to continuing operations unless otherwise noted.

•Backlog increased 11.7%, or $63.9 million, due to strong order intake in the Precision Solutions segment and the positive impact of current year acquisitions. Organically, backlog increased 7.5%, with 15.5% and 0.6% organic increases in Precision Solutions and Nutrition & Health segments backlog, respectively.

•Orders increased 3.1% organically, or $12.2 million, driven primarily by an 8.0% or $15.5 million increase in Precision Solutions segment orders, partially offset by a 1.7% or $3.4 million decrease in Nutrition & Health segment orders.

•Revenues decreased 0.5%, or $2.1 million primarily driven by a 3.8% decrease in organic revenues, with a 9.7% organic decline in the Nutrition & Health segment offset slightly by 1.0% organic growth in the Precision Solutions segment.

•Operating income was $31.4 million, or 8.0% of revenues.After excluding discrete, non-operational and non-cash items and reclassifying transitional services income, adjusted operating income* was $47.3 million, or 12.0% of revenues, representing an increase of approximately 190 basis points year-over-year on a comparable basis.

•Segment income was $52.2 million, up 8.5%, and segment margin increased by 110 basis points to 13.2%. The increase in segment income was primarily driven by improved gross margin as the company pursued higher quality revenue and enhanced price realization, offset slightly by increased intangible amortization charges. Excluding the impacts of higher intangible amortization charges and of fair value adjustments, adjusted segment income* was $56.5 million, up 9.7%, and adjusted segment margin* increased by 130 basis points to 14.3%.

•Adjusted free cash flow* from continuing operations was $25.9 million, including investments of $9.1 million on capital expenditures and excluding cash spending of $3.2 million on restructuring actions, $3.1 million on strategic actions, and $1.0 million on certain M&A activities.

•Nutrition & Health segment revenues decreased 11.3% driven by a 9.7% decrease in organic revenues primarily related to timing of systems projects. Segment income was $30.4 million, up 19.2% from the prior year. Adjusted segment income* was $31.9 million, up 17.3%, and adjusted segment margin* increased by 470 basis points to 19.2%. The increase in adjusted segment income* was primarily driven by a higher quality of revenue and SG&A cost reductions offset by inflationary pressures. Increased margins were primarily the result of the improved revenue mix and lower SG&A expenses.

•Precision Solutions segment revenues increased 9.2%, primarily driven by a 9.3% increase related to current year acquisitions and a 1.0% increase in organic revenues related to an elevated level of short-cycle book-and-turn business, offset partially by intentional long-cycle product line selectivity. Segment income was $21.8 million, down 3.5% from the prior year. Adjusted segment income* was $24.6 million, up 1.2%, and adjusted segment margin* decreased by 90 basis points to 10.8%, driven primarily by a slightly less favorable mix of revenue, inflationary pressure and modestly higher SG&A spend. The increase in adjusted segment income* was primarily driven by earnings from acquisitions completed in 2021.

OTHER ITEMS

About SPX FLOW, Inc.: Based in Charlotte, N.C., SPX FLOW, Inc. (NYSE: FLOW) improves the world through innovative and sustainable solutions. 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 nutrition, health and industrial markets. SPX FLOW had approximately $1.5 billion in 2021 annual revenues and has operations in more than 30 countries and sales in more than 140 countries. To learn more about SPX FLOW, please visit www.spxflow.com.

On December 12, 2021, the Company entered into a merger agreement with an affiliate of Lone Star Funds ("Lone Star"), wherein upon closing, Lone Star will acquire all of the Company's outstanding common shares in exchange for a cash purchase price of $86.50 per share. The transaction was unanimously approved by the Company's Board of Directors and is expected to close in the first half of 2022, subject to receipt of certain regulatory approvals, as well as the Company's shareholder approval and other customary closing conditions.

*Non-GAAP measure. See attached schedules for reconciliation from most comparable GAAP measure. Management believes these non-GAAP measures 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 measures 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.

Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities 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. The words “expects,” “anticipates,” “plans,” “targets,” “projects,” “believes,” “estimates,” “forecasts,” “intends,” “should,” “could,” “would,” “will,” “may” 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. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: (1) conditions to the closing of the transaction may not be satisfied and required regulatory approvals may not be obtained; (2) the transaction may involve unexpected costs, liabilities or delays; (3) the business of SPX FLOW may suffer as a result of uncertainty surrounding the transaction; (4) the outcome of any legal proceedings related to the transaction; (5) SPX FLOW may be adversely affected by other economic, business, legislative, regulatory and/or competitive factors; (6) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (7) risks that the transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction; (8) the failure of Lone Star to obtain the necessary debt financing arrangements set forth in the commitment letter it received in connection with the transaction; and (9) other risks to consummation of the transaction, including the risk that the transaction will not be consummated within the expected time period or at all. If the transaction is consummated, SPX FLOW’s stockholders will cease to have any equity interest in SPX FLOW and will have no right to participate in its earnings and future growth. Additional factors that may affect the future results of SPX FLOW are set forth in its filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2020, which are available on the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof.

Investor Contact:

Scott Gaffner

VP, Investor Relations and Strategic Insights

704-752-4485

investor@spxflow.com

Media Contact:

Melissa Buscher

Chief Communications and Marketing Officer

704-540-2160

melissa.buscher@spxflow.com

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Revenues	$	394.0	$	396.1	$	1,529.0	$	1,350.6
Cost of products sold	258.0		267.9		993.8		881.7
Gross profit	136.0		128.2		535.2		468.9
Selling, general and administrative	101.7		91.3		379.2		357.2
Intangible amortization	4.3		3.2		17.9		11.7
Asset impairment charges	—		—		—		3.2
Restructuring and other related charges (credits)	(1.4)		3.0		12.7		11.7
Loss (gain) on sale of business and product line assets	—		4.2		(5.6)		4.2
Operating income	31.4		26.5		131.0		80.9
Other income, net	4.8		1.0		17.3		9.5
Interest expense, net	(2.0)		(5.0)		(16.0)		(29.9)
Loss on early extinguishment of debt	—		—		(12.4)		(11.0)
Income from continuing operations before income taxes	34.2		22.5		119.9		49.5
Income tax provision	(21.9)		(2.5)		(53.5)		(6.2)
Income from continuing operations	12.3		20.0		66.4		43.3
Income (loss) from discontinued operations, net of tax	1.5		4.1		0.7		(36.8)
Net income	13.8		24.1		67.1		6.5
Less: Net income (loss) attributable to noncontrolling interests	—		(0.1)		0.4		0.6
Net income attributable to SPX FLOW, Inc.	$	13.8	$	24.2	$	66.7	$	5.9
Amounts attributable to SPX FLOW, Inc. common shareholders:
Income from continuing operations, net of tax	$	12.3	$	20.1	$	66.0	$	42.6
Income (loss) from discontinued operations, net of tax	1.5		4.1		0.7		(36.7)
Net income attributable to SPX FLOW, Inc.	$	13.8	$	24.2	$	66.7	$	5.9
Basic income (loss) per share of common stock:
Income per share from continuing operations	$	0.29	$	0.48	$	1.57	$	1.01
Income (loss) per share from discontinued operations	0.04		0.10		0.02		(0.87)
Net income per share attributable to SPX FLOW, Inc.	0.33		0.58		1.59		0.14
Diluted income (loss) per share of common stock:
Income per share from continuing operations	$	0.29	$	0.47	$	1.57	$	1.00
Income (loss) per share from discontinued operations	0.04		0.10		0.02		(0.86)
Net income per share attributable to SPX FLOW, Inc.	0.33		0.57		1.59		0.14
Weighted average number of common shares outstanding - basic	41.955		42.070		41.932		42.307
Weighted average number of common shares outstanding - diluted	41.968		42.627		41.959		42.554

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

	December 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and equivalents	$	313.9	$	441.5
Accounts receivable, net	246.0		232.6
Contract assets	25.5		24.4
Inventories, net	242.8		199.3
Other current assets	44.1		27.4
Total current assets	872.3		925.2
Property, plant and equipment:
Land	21.9		22.8
Buildings and leasehold improvements	172.0		176.8
Machinery and equipment	360.2		349.1
	554.1		548.7
Accumulated depreciation	(318.9)		(320.6)
Property, plant and equipment, net	235.2		228.1
Goodwill	584.5		569.7
Intangibles, net	221.9		206.0
Other assets	172.3		169.5
TOTAL ASSETS	$	2,086.2	$	2,098.5
LIABILITIES, MEZZANINE EQUITY AND EQUITY
Current liabilities:
Accounts payable	$	173.8	$	149.1
Contract liabilities	106.2		119.5
Accrued expenses	183.4		178.7
Income taxes payable	19.8		23.0
Short-term debt	13.8		12.5
Current maturities of long-term debt	20.0		0.1
Total current liabilities	517.0		482.9
Long-term debt	374.1		397.3
Deferred and other income taxes	48.7		36.6
Other long-term liabilities	107.7		117.5
Total long-term liabilities	530.5		551.4
Mezzanine equity	2.1		3.4
Equity:
SPX FLOW, Inc. shareholders’ equity:
Common stock	0.4		0.4
Paid-in capital	1,729.4		1,696.9
Accumulated deficit	(308.0)		(363.3)
Accumulated other comprehensive loss	(285.8)		(226.4)
Common stock in treasury	(98.7)		(46.2)
Total SPX FLOW, Inc. shareholders' equity	1,037.3		1,061.4
Noncontrolling interests	(0.7)		(0.6)
Total equity	1,036.6		1,060.8
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	2,086.2	$	2,098.5

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Cash flows from operating activities:
Net income	$	13.8	$	24.1	$	67.1	$	6.5
Less: Income (loss) from discontinued operations, net of tax	1.5		4.1		0.7		(36.8)
Income from continuing operations	12.3		20.0		66.4		43.3
Adjustments to reconcile income from continuing operations to net cash from operating activities:
Restructuring and other related charges (credits)	(1.4)		3.0		12.7		11.7
Asset impairment charges	—		—		—		3.2
Deferred income taxes	19.5		8.6		22.0		27.5
Depreciation and amortization	11.9		10.9		47.2		41.1
Stock-based compensation	4.6		(1.1)		14.2		9.5
Pension and other employee benefits	(1.8)		2.3		(1.0)		3.3
Gains on asset sales and other, net	—		(1.6)		(2.2)		(2.5)
Loss (gain) on sale of business and product line assets	—		4.2		(5.6)		4.2
Gains on changes in fair value of investment in equity security	(2.8)		(1.2)		(11.9)		(8.6)
Losses on early extinguishment of debt	—		—		12.4		11.0
Changes in operating assets and liabilities, net of effects from business acquisitions and sale, and from discontinued operations:
Accounts receivable and other assets	(16.5)		10.2		(26.1)		26.4
Contract assets and liabilities, net	(3.1)		(5.7)		(13.1)		(1.3)
Inventories	(1.5)		30.1		(39.3)		18.9
Accounts payable, accrued expenses and other	9.7		12.8		7.6		(56.1)
Cash spending on restructuring actions	(3.2)		(3.8)		(13.6)		(11.3)
Net cash from continuing operations	27.7		88.7		69.7		120.3
Net cash from (used in) discontinued operations	1.5		0.7		0.9		(7.6)
Net cash from operating activities	29.2		89.4		70.6		112.7
Cash flows from (used in) investing activities:
Proceeds from asset sales and other, net	—		2.5		4.1		5.8
Proceeds from sale of business and product line assets, net of cash disposed	—		4.7		8.0		4.7
Capital expenditures	(9.1)		(5.1)		(32.6)		(22.4)
Business acquisitions, net of cash acquired of $4.5 and $— in the years ended December 31, 2021 and 2020	0.3		—		(102.3)		(10.0)
Net cash from (used in) continuing operations	(8.8)		2.1		(122.8)		(21.9)
Net cash from discontinued operations (includes proceeds from disposition of $408.4, less cash and restricted cash disposed of $7.3, in the year ended December 31, 2020)	—		2.2		—		395.6
Net cash from (used in) investing activities	(8.8)		4.3		(122.8)		373.7

SPX FLOW, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited; in millions)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Cash flows used in financing activities:
Borrowings under amended senior credit facility	$	—	$	—	$	400.0	$	—
Repayments of amended senior credit facility	(5.0)		—		(5.0)		—
Repurchases of senior notes (includes premiums paid of $8.8 and $8.4 in the years ended December 31, 2021 and 2020)	—		—		(308.8)		(308.4)
Repayments of former senior credit facility	—		—		(100.0)		—
Borrowings under (repayments of) purchase card program, net	(1.6)		3.7		1.3		(7.9)
Repayments of other financing arrangements	—		(0.1)		(1.7)		(0.4)
Financing fees paid	—		—		(2.9)		—
Purchases of common stock	—		(3.0)		(40.2)		(19.9)
Proceeds from the exercise of employee stock options	—		—		17.6		—
Minimum withholdings paid on behalf of employees for net share settlements, net	(6.1)		(0.1)		(12.7)		(7.0)
Purchases of noncontrolling interests	—		(6.8)		(0.6)		(15.0)
Dividends paid (includes noncontrolling interest distributions of $— and $2.8 in the years ended December 31, 2021 and 2020)	(3.8)		(1.6)		(11.4)		(2.8)
Net cash used in continuing operations	(16.5)		(7.9)		(64.4)		(361.4)
Net cash used in discontinued operations	—		—		—		(0.3)
Net cash used in financing activities	(16.5)		(7.9)		(64.4)		(361.7)
Change in cash, cash equivalents and restricted cash due to changes in foreign currency exchange rates	(3.7)		3.3		(11.1)		13.5
Net change in cash, cash equivalents and restricted cash	0.2		89.1		(127.7)		138.2
Consolidated cash, cash equivalents and restricted cash, beginning of period	313.7		352.5		441.6		303.4
Consolidated cash, cash equivalents and restricted cash, end of period	$	313.9	$	441.6	$	313.9	$	441.6

SPX FLOW, INC. AND SUBSIDIARIES

ADJUSTED FREE CASH FLOW RECONCILIATION

(Unaudited; in millions)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Net cash from operating activities - continuing and discontinued operations	$	29.2	$	89.4	$	70.6	$	112.7
Less: Net cash flow from (used in) operating activities - discontinued operations	1.5		0.7		0.9		(7.6)
Net cash flow from operating activities - continuing operations	27.7		88.7		69.7		120.3
Capital expenditures - continuing operations	(9.1)		(5.1)		(32.6)		(22.4)
Free cash flow from operations - continuing operations	18.6		83.6		37.1		97.9
Cash spending on restructuring actions	3.2		3.8		13.6		11.3
Cash spending on certain M&A activities	1.0		—		5.6		—
Cash spending on strategic actions	3.1		1.4		3.1		7.8
Discrete cash tax payments	—		—		4.5		17.1
Adjusted free cash flow from operations	$	25.9	$	88.8	$	63.9	$	134.1

SPX FLOW, INC. AND SUBSIDIARIES

RESULTS OF REPORTABLE SEGMENTS

(Unaudited; in millions)

	As of and for the three months ended December 31,										As of and for the twelve months ended December 31,
	2021			2020			Δ		%/bps		2021			2020			Δ		%/bps
Nutrition and Health
Backlog	$	283.1		$	291.6		$	(8.5)	(2.9)	%	$	283.1		$	291.6		$	(8.5)	(2.9)	%
Orders	$	195.0		$	200.0		$	(5.0)	(2.5)	%	$	699.0		$	635.1		$	63.9	10.1	%
Revenues	$	166.4		$	187.7		$	(21.3)	(11.3)	%	$	676.4		$	630.8		$	45.6	7.2	%
Segment income	$	30.4		$	25.5		$	4.9	19.2	%	$	110.0		$	88.2		$	21.8	24.7	%
Intangible amortization expense	1.5			1.7			(0.2)				6.3			6.3			—
Adjusted segment income	$	31.9		$	27.2		$	4.7	17.3	%	$	116.3		$	94.5		$	21.8	23.1	%
as a percent of revenues	19.2		%	14.5		%			470bps		17.2		%	15.0		%			220bps
Precision Solutions
Backlog	$	326.6		$	254.2		$	72.4	28.5%		$	326.6		$	254.2		$	72.4	28.5%
Orders	$	224.3		$	193.7		$	30.6	15.8%		$	880.9		$	723.6		$	157.3	21.7%
Revenues	$	227.6		$	208.4		$	19.2	9.2%		$	852.6		$	719.8		$	132.8	18.4%
Segment income	$	21.8		$	22.6		$	(0.8)	(3.5)%		$	98.2		$	80.5		$	17.7	22.0%
Intangible amortization expense	2.8			1.5			1.3				11.6			5.4			6.2
Purchase accounting - amortization of inventory fair value adjustment	—			0.2			(0.2)				1.9			0.2			1.7
Adjusted segment income	$	24.6		$	24.3		$	0.3	1.2%		$	111.7		$	86.1		$	25.6	29.7%
as a percent of revenues	10.8		%	11.7		%			(90)bps		13.1		%	12.0		%			110bps
Consolidated Backlog	$	609.7		$	545.8		$	63.9	11.7%		$	609.7		$	545.8		$	63.9	11.7%
Consolidated Orders	$	419.3		$	393.7		$	25.6	6.5%		$	1,579.9		$	1,358.7		$	221.2	16.3%
Consolidated Revenues	$	394.0		$	396.1		$	(2.1)	(0.5)%		$	1,529.0		$	1,350.6		$	178.4	13.2%
Consolidated Segment Income	$	52.2		$	48.1		$	4.1	8.5%		$	208.2		$	168.7		$	39.5	23.4%
Consolidated Adjusted Segment Income	$	56.5		$	51.5		$	5.0	9.7%		$	228.0		$	180.6		$	47.4	26.2%
as a percent of revenues	14.3		%	13.0		%			130bps		14.9		%	13.4		%			150bps
Consolidated Adjusted Segment Income	$	56.5		$	51.5		$	5.0			$	228.0		$	180.6		$	47.4
Less: Intangible amortization expense	(4.3)			(3.2)			(1.1)				(17.9)			(11.7)			(6.2)
Less: Purchase accounting - amortization of inventory fair value adjustment	—			(0.2)			0.2				(1.9)			(0.2)			(1.7)
Consolidated Segment Income	52.2			48.1			4.1				208.2			168.7			39.5
Corporate expense	21.9			14.1			7.8				69.2			67.8			1.4
Pension and postretirement service costs	0.3			0.3			—				0.9			0.9			—
Asset impairment charges	—			—			—				—			3.2			(3.2)
Restructuring and other related charges (credits)	(1.4)			3.0			(4.4)				12.7			11.7			1.0
Loss (gain) on sale of business and product line assets	—			4.2			(4.2)				(5.6)			4.2			(9.8)
Consolidated Operating Income	$	31.4		$	26.5		$	4.9	18.5%		$	131.0		$	80.9		$	50.1	61.9%
as a percent of revenues	8.0		%	6.7		%			130bps		8.6		%	6.0		%			260bps

SPX FLOW, INC. AND SUBSIDIARIES

ADJUSTED OPERATING INCOME RECONCILIATION

(Unaudited; in millions)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Operating income	$	31.4	$	26.5	$	131.0	$	80.9
Charges and fees associated with strategic actions	12.6		1.1		15.9		7.1
Charges associated with certain M&A activities	0.2		0.3		5.8		0.3
Restructuring and other related charges (credits)	(1.4)		3.0		12.7		11.7
Asset impairment charges	—		—		—		3.2
Loss (gain) on sale of business and product line assets	—		4.2		(5.6)		4.2
Reduction of SG&A costs associated with transition services income	0.2		1.4		1.9		4.2
Purchase accounting - amortization of inventory fair value adjustment	—		0.2		1.9		0.2
Intangible amortization	4.3		3.2		17.9		11.7
Adjusted operating income	$	47.3	$	39.9	$	181.5	$	123.5

SPX FLOW, INC. AND SUBSIDIARIES

ORGANIC REVENUE RECONCILIATION

(Unaudited)

	Three months ended December 31, 2021
	Net Revenue Growth (Decline)		Foreign Currency		Business Combinations		Organic Revenue Growth (Decline)
Nutrition and Health	(11.3)	%	(1.6)	%	—	%	(9.7)	%
Precision Solutions	9.2	%	(1.1)	%	9.3	%	1.0	%
Consolidated	(0.5)	%	(1.6)	%	4.9	%	(3.8)	%

	Twelve months ended December 31, 2021
	Net Revenue Growth		Foreign Currency		Business Combinations		Organic Revenue Growth
Nutrition and Health	7.2	%	2.3	%	—	%	4.9	%
Precision Solutions	18.4	%	2.3	%	7.1	%	9.0	%
Consolidated	13.2	%	2.3	%	3.8	%	7.1	%

SPX FLOW, INC. AND SUBSIDIARIES

ADJUSTED EBITDA FROM CONTINUING OPERATIONS RECONCILIATION

(Unaudited; in millions)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Net income attributable to SPX FLOW, Inc. from continuing operations	$	12.3	$	20.1	$	66.0	$	42.6
Income tax provision	21.9		2.5		53.5		6.2
Interest expense, net	2.0		5.0		16.0		29.9
Depreciation and amortization	11.9		10.9		47.2		41.1
EBITDA from continuing operations	48.1		38.5		182.7		119.8
Charges and fees associated with strategic actions	12.6		1.1		15.9		7.1
Charges associated with certain M&A activities	0.2		0.3		5.8		0.3
Restructuring and other related charges (credits)	(1.4)		3.0		12.7		11.7
Asset impairment charges	—		—		—		3.2
Fair value adjustment related to an equity security	(2.8)		(1.2)		(11.9)		(8.6)
Mark to market pension adjustments	(2.2)		1.9		(2.2)		1.9
Loss (gain) on sale of business and product line assets	—		4.2		(5.6)		4.2
Certain gains on asset sales and other, net	—		(1.6)		(2.2)		(2.9)
Loss on early extinguishment of debt	—		—		12.4		11.0
Purchase accounting - amortization of inventory fair value adjustment	—		0.2		1.9		0.2
Adjusted EBITDA from continuing operations	$	54.5	$	46.4	$	209.5	$	147.9

SPX FLOW, INC. AND SUBSIDIARIES

ADJUSTED DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS RECONCILIATION

(Unaudited; in millions)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Diluted earnings per share from continuing operations	$	0.29	$	0.47	$	1.57	$	1.00
Charges and fees associated with strategic actions, net of tax	0.23		0.02		0.29		0.12
Charges associated with certain M&A activities, net of tax	—		—		0.10		—
Restructuring and other related charges (credits), net of tax	(0.03)		0.05		0.24		0.21
Asset impairment charges, net of tax	—		—		—		0.05
Fair value adjustment related to an equity security, net of tax	(0.05)		(0.02)		(0.22)		(0.15)
Mark to market pension adjustment, net of tax	(0.04)		0.04		(0.04)		0.04
Loss (gain) on sale of business and product line assets, net of tax	—		0.09		(0.09)		0.09
Certain gains on asset sales and other, net of tax	—		(0.04)		(0.04)		(0.06)
Loss on early extinguishment of debt, net of tax	—		—		0.22		0.20
Purchase accounting - amortization of inventory fair value adjustment, net of tax	—		—		0.04		—
Intangible amortization, net of tax	0.08		0.06		0.33		0.22
Discrete tax items	0.29		(0.11)		0.40		(0.25)
Adjusted diluted earnings per share from continuing operations	$	0.77	$	0.56	$	2.80	$	1.47

XML

Cover Document	Feb. 16, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 16, 2022
Entity Registrant Name	SPX FLOW, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	1-37393
Entity Tax Identification Number	47-3110748
Entity Address, Address Line One	13320 Ballantyne Corporate Place
Entity Address, City or Town	Charlotte
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28277
City Area Code	704
Local Phone Number	752-4400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, Par Value $0.01
Trading Symbol	FLOW
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001641991